EIN: 270715478
UEI: HEHLGKT5KQP8
Audited by: UHY LLP
Oversight agency: 84 [Department of Education]
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Data as of August 28, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on December 12, 2025. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by June 12, 2026 (81 days ago).
What is a management decision? →FAC accepted this audit on January 2, 2025 — management decision was due July 2, 2025.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund Federal Award Identification Number and Year: 213713 Pass-through Entity – Michigan Department of Education Finding Type – Material weakness in internal control over compliance Repeat Finding - No Criteria – Per 2 CFR § 200.303, The non-Federal entity must 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). Condition – During our testing for Cash Management, it was noted that 4 out of 4 drawdown requests selected for testing did not have evidence of review and approval. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – Management did not fully implement their internal control policies and procedures as there was no evidence of review and approvals, nor was documentation retained. Effect – Drawdown requests did not have evidence of review and approval. Recommendation – We recommend that management review its procedures and controls in place to ensure that reports and supporting documentation are retained and have proper evidence of review and approval. View of Responsible Officials and Corrective Action Plan – Management agrees with the finding. See corrective action plan.
Show full finding ▾Hide full finding ▴Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund Federal Award Identification Number and Year: 213713 Pass-through Entity – Michigan Department of Education Finding Type – Material weakness in internal control over compliance Repeat Finding - No Criteria – Per 2 CFR § 200.303, The non-Federal entity must 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). Condition – During our testing for Cash Management, it was noted that 4 out of 4 drawdown requests selected for testing did not have evidence of review and approval. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – Management did not fully implement their internal control policies and procedures as there was no evidence of review and approvals, nor was documentation retained. Effect – Drawdown requests did not have evidence of review and approval. Recommendation – We recommend that management review its procedures and controls in place to ensure that reports and supporting documentation are retained and have proper evidence of review and approval. View of Responsible Officials and Corrective Action Plan – Management agrees with the finding. See corrective action plan.
Although the Academy has internal controls in place for approvals on journal entries, payments, transfers, and other disbursements, we will improve our processes in the following ways: • We will ensure a signature and date are included on all paperwork needing review and approval going forward. If documents are electronic, there must be an electronic signature with a time stamp included. • All Federal draws will have supporting documents that are reviewed, approved, and certified before funds are requested.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund Federal Award Identification Number and Year: 213713 Pass-through Entity – Michigan Department of Education Finding Type – Material weakness in internal control over compliance Repeat Finding – No Criteria – Per 2 CFR § 200.303, The non-Federal entity must 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). Condition – During our testing for Reporting, it was noted that 1 out of 1 report selected for testing did not have evidence of review and approval. In addition, the report was not submitted within the required time frame as required by the grant agreement. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – Management did not fully implement their internal control policies and procedures as there was no evidence of review and approvals, nor was documentation retained. Effect – Report did not have evidence of review and approval. Recommendation – We recommend that management review its procedures and controls in place to ensure that reports and supporting documentation are retained and have proper evidence of review and approval. View of Responsible Officials and Corrective Action Plan – Management agrees with the finding. See corrective action plan.
Show full finding ▾Hide full finding ▴Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund Federal Award Identification Number and Year: 213713 Pass-through Entity – Michigan Department of Education Finding Type – Material weakness in internal control over compliance Repeat Finding – No Criteria – Per 2 CFR § 200.303, The non-Federal entity must 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). Condition – During our testing for Reporting, it was noted that 1 out of 1 report selected for testing did not have evidence of review and approval. In addition, the report was not submitted within the required time frame as required by the grant agreement. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – Management did not fully implement their internal control policies and procedures as there was no evidence of review and approvals, nor was documentation retained. Effect – Report did not have evidence of review and approval. Recommendation – We recommend that management review its procedures and controls in place to ensure that reports and supporting documentation are retained and have proper evidence of review and approval. View of Responsible Officials and Corrective Action Plan – Management agrees with the finding. See corrective action plan.
Although the Academy has internal controls in place for approvals on journal entries, payments, transfers, and other disbursements, we will improve our processes in the following ways: • We will ensure a signature and date are included on all paperwork needing review and approval going forward. If documents are electronic, there must be an electronic signature with a time stamp included.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund Federal Award Identification Number and Year: 213713 Pass-through Entity – Michigan Department of Education Finding Type – Material weakness over compliance Repeat Finding - No Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended June 30, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – The Academy’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Effect – Data collection form was not submitted on time. Recommendation – We recommend that the Academy develop a reliable system to close the financial records in a timely manner. View of Responsible Officials and Corrective Action Plan – Management agrees with the finding. See corrective action plan.
Show full finding ▾Hide full finding ▴Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund Federal Award Identification Number and Year: 213713 Pass-through Entity – Michigan Department of Education Finding Type – Material weakness over compliance Repeat Finding - No Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended June 30, 2023. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – The Academy’s books and records for the 2023 fiscal year were not reconciled or closed in a timely manner. The data collection form was not submitted within the required time. Effect – Data collection form was not submitted on time. Recommendation – We recommend that the Academy develop a reliable system to close the financial records in a timely manner. View of Responsible Officials and Corrective Action Plan – Management agrees with the finding. See corrective action plan.
The audit for the year ended June 30, 2023 was not submitted to the Federal Audit Clearinghouse due to issues with the UEI numbers not being renewed timely on the Academy’s side. The Finance Director is now responsible for the renewals going forward, and this will not be an ongoing issue in the futur
Finding Type – Material weakness in internal control over compliance Repeat Finding - No Criteria – Per 2 CFR § 200.303, The non-Federal entity must 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). Condition – During our testing for Activities Allowed or Unallowed, Allowable Costs/Cost Principles, it was noted that 7 out of 17 personnel selected for payroll testing were not included in the Academy’s – Grant Funded Staff Listing. In addition, we noted that for 8 out of 17 personnel selected for testing, there was no evidence of review or approval of colleague assignment letter. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – Management did not fully implement their internal control policies and procedures as there was no evidence of review and approvals, nor was documentation retained. Effect – Reports did not have evidence of review and approval. Recommendation – We recommend that management review its procedures and controls in place to ensure that reports and supporting documentation are retained and have proper evidence of review and approval. View of Responsible Officials and Corrective Action Plan – Management agrees with the finding. See corrective action plan.
Show full finding ▾Hide full finding ▴Finding Type – Material weakness in internal control over compliance Repeat Finding - No Criteria – Per 2 CFR § 200.303, The non-Federal entity must 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). Condition – During our testing for Activities Allowed or Unallowed, Allowable Costs/Cost Principles, it was noted that 7 out of 17 personnel selected for payroll testing were not included in the Academy’s – Grant Funded Staff Listing. In addition, we noted that for 8 out of 17 personnel selected for testing, there was no evidence of review or approval of colleague assignment letter. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – Management did not fully implement their internal control policies and procedures as there was no evidence of review and approvals, nor was documentation retained. Effect – Reports did not have evidence of review and approval. Recommendation – We recommend that management review its procedures and controls in place to ensure that reports and supporting documentation are retained and have proper evidence of review and approval. View of Responsible Officials and Corrective Action Plan – Management agrees with the finding. See corrective action plan.
Although the Academy has internal controls in place for approvals on journal entries, payments, transfers, and other disbursements, we will improve our processes in the following ways: • We will ensure a signature and date are included on all paperwork needing review and approval going forward. If documents are electronic, there must be an electronic signature with a time stamp included. • We have brought on a State and Federal Grants Consultant to ensure all required grant related paperwork is completed and saved in a shared location with the Finance Team.
FAC accepted this audit on September 11, 2024 — management decision was due March 11, 2025.
Finding Type: Material Weakness Criteria The Academy’s internal control structure should ensure that the accounting data is appropriately calculated, reconciled, and reported in accordance with generally accepted accounting principles. Condition The Academy’s accounts required significant adjustments to the general ledger to properly reflect the appropriate balance after the books and records were presented for audit. Cause/Effect While the accounts were reconciled throughout the year, the reconciliations completed had certain instances where the year-end reconciliation process didn’t match to the general ledger. Recommendation The Academy should institute monthly and yearly closing procedures to ensure that all accounts are reconciled and match the general ledger.
Show full finding ▾Hide full finding ▴Finding Type: Material Weakness Criteria The Academy’s internal control structure should ensure that the accounting data is appropriately calculated, reconciled, and reported in accordance with generally accepted accounting principles. Condition The Academy’s accounts required significant adjustments to the general ledger to properly reflect the appropriate balance after the books and records were presented for audit. Cause/Effect While the accounts were reconciled throughout the year, the reconciliations completed had certain instances where the year-end reconciliation process didn’t match to the general ledger. Recommendation The Academy should institute monthly and yearly closing procedures to ensure that all accounts are reconciled and match the general ledger.
The Accounting Team will adhere to the established monthly checklist and physically check off items as they are completed, including the date of completion. Management will review the monthly close procedural checklist to ensure established processes have been followed and completed and sign off on each month after completion/close is verified.
2022-001
Finding Type: Material Weakness Criteria The Academy should monitor the general ledger appropriately to ensure timely and accurate financial statements. Condition The Academy lacked appropriate overall monitoring of account balances during the year to compile complete and accurate financial reports, which resulted in many auditor-proposed journal entries. Context We noted that the Academy didn’t have a process in place to ensure that financial statements were accurate and complete. Cause/Effect The Academy did not identify the resources necessary to ensure general ledger accounts were monitored and analyzed by appropriate individuals, including taking an overview of fund activity to finalize the accounting records. As a result of the lack of appropriate overall monitoring procedures, there were many auditor-proposed journal entries. Recommendation The Academy should develop an overall monitoring procedure to ensure that all fund activity is complete, accurate, and logical. This includes assigning an appropriate individual to each general ledger account, and several individuals are responsible for the entire general ledger and financial statements to perform monitoring, analytical analysis, and adjustment as needed.
Show full finding ▾Hide full finding ▴Finding Type: Material Weakness Criteria The Academy should monitor the general ledger appropriately to ensure timely and accurate financial statements. Condition The Academy lacked appropriate overall monitoring of account balances during the year to compile complete and accurate financial reports, which resulted in many auditor-proposed journal entries. Context We noted that the Academy didn’t have a process in place to ensure that financial statements were accurate and complete. Cause/Effect The Academy did not identify the resources necessary to ensure general ledger accounts were monitored and analyzed by appropriate individuals, including taking an overview of fund activity to finalize the accounting records. As a result of the lack of appropriate overall monitoring procedures, there were many auditor-proposed journal entries. Recommendation The Academy should develop an overall monitoring procedure to ensure that all fund activity is complete, accurate, and logical. This includes assigning an appropriate individual to each general ledger account, and several individuals are responsible for the entire general ledger and financial statements to perform monitoring, analytical analysis, and adjustment as needed.
The Finance Director will review staffing resources and make appropriate adjustments to ensure that adequate levels of staffing and quality staff are recruited and retained. New ERP software has now been put in place to facilitate input, reporting, and analysis of fund accounting and accurate GL classification
2022-002
Finding Type: Material Weakness and Material Noncompliance Criteria There should be a process in place to ensure that the Academy complies with laws and regulations. Condition There was an instance identified where the Academy was not in compliance with laws and regulations. State School Aid Act MCL 388.1718 requires that annual audits are submitted by November 1 to the Michigan Department of Education. Cause/Effect There was a change in staff and staff shortages, which led to noncompliance with MCL 388.1718. Recommendation We recommend that the Academy implement a process that identifies specific individuals to identify and monitor applicable compliance requirements throughout the year.
Show full finding ▾Hide full finding ▴Finding Type: Material Weakness and Material Noncompliance Criteria There should be a process in place to ensure that the Academy complies with laws and regulations. Condition There was an instance identified where the Academy was not in compliance with laws and regulations. State School Aid Act MCL 388.1718 requires that annual audits are submitted by November 1 to the Michigan Department of Education. Cause/Effect There was a change in staff and staff shortages, which led to noncompliance with MCL 388.1718. Recommendation We recommend that the Academy implement a process that identifies specific individuals to identify and monitor applicable compliance requirements throughout the year.
The necessary review and analysis of GL accounts will be completed according to the established month end and annual close procedure check lists. Audit engagement will begin no later than August for FY 2024. Any new, as well as current staff, will receive periodic in-service centered around the MI Public School Accounting manual to ensure thorough understanding of the expectations and processes for school fund accounting
2022-003
Finding Type: Material Weakness Criteria There should be a process to ensure grant revenue is accurately and timely recorded. Condition The Academy didn’t have a process in place to ensure that grant revenue was reported accurately and timely. Context During our testing, we noted errors in recording various revenue, accounts receivable, and unearned revenue accounts. This included instances where revenues were not properly recorded, and drawdowns for grants were processed beyond the sixty-day requirement, which reduced revenue. Cause/Effect There is no process to ensure that grant revenues are timely and accurately accounted for. Recommendation We recommend that the Academy implement a process that would allow for the accurate recording of grant revenue and timely request of cash drawdowns.
Show full finding ▾Hide full finding ▴Finding Type: Material Weakness Criteria There should be a process to ensure grant revenue is accurately and timely recorded. Condition The Academy didn’t have a process in place to ensure that grant revenue was reported accurately and timely. Context During our testing, we noted errors in recording various revenue, accounts receivable, and unearned revenue accounts. This included instances where revenues were not properly recorded, and drawdowns for grants were processed beyond the sixty-day requirement, which reduced revenue. Cause/Effect There is no process to ensure that grant revenues are timely and accurately accounted for. Recommendation We recommend that the Academy implement a process that would allow for the accurate recording of grant revenue and timely request of cash drawdowns.
Management will ensure experienced staff is recruited, retained, and trained to support grant revenues. This includes recording the grants correctly in the G/L and also pulling the correct draws from the State website accurately and timely.
2022-004
Finding Type: Material Weakness – Noncompliance – Educational Stabilization Fund Under the Coronavirus Aid, Relief, and Economic Security Act Criteria Michigan Department of Education awarded the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) program to public school academies operating before fiscal year 2022. Under the program, Academies cannot allow the transfer of ESSER funding to academies open after fiscal year 2021. Condition The Academy transferred ESSER funds based on the State of Michigan's approved consolidated application that identified Lincoln-King Adams-Young Academy as a second tier subrecipient. Subsequent to year-end, the State of Michigan deemed the transfer as unallowable incurred expenditures ineligible. The Academy firmly disputes that the transfers were unallowable because of the pre-approvals received by the Academy to be a sub-recipient of a federal award but supports trying to resolve the relevant issues. Questioned Cost Questioned costs included amounts transferred to Lincoln-King Adams-Young Academy, which totaled $3,345,325 in Fiscal Year 23. Context Subsequent to year-end, we were made aware that the transfers were unallowable. Cause and Effect The Academy relied on the approved consolidated application noting the use of funds for Lincoln-King Adams-Young Academy.
Show full finding ▾Hide full finding ▴Finding Type: Material Weakness – Noncompliance – Educational Stabilization Fund Under the Coronavirus Aid, Relief, and Economic Security Act Criteria Michigan Department of Education awarded the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) program to public school academies operating before fiscal year 2022. Under the program, Academies cannot allow the transfer of ESSER funding to academies open after fiscal year 2021. Condition The Academy transferred ESSER funds based on the State of Michigan's approved consolidated application that identified Lincoln-King Adams-Young Academy as a second tier subrecipient. Subsequent to year-end, the State of Michigan deemed the transfer as unallowable incurred expenditures ineligible. The Academy firmly disputes that the transfers were unallowable because of the pre-approvals received by the Academy to be a sub-recipient of a federal award but supports trying to resolve the relevant issues. Questioned Cost Questioned costs included amounts transferred to Lincoln-King Adams-Young Academy, which totaled $3,345,325 in Fiscal Year 23. Context Subsequent to year-end, we were made aware that the transfers were unallowable. Cause and Effect The Academy relied on the approved consolidated application noting the use of funds for Lincoln-King Adams-Young Academy.
Even though the Academy transferred $3,345,325 of ESSER funds to LKAYA based on the intergovernmental agreement that was in place during that time, the Academy itself did incur ESSER eligible costs that could have been applied against these ESSER dollars if they had remained within the Academy. The costs incurred involved improvements to technology, maintaining and increasing additional staff, curriculum materials, instructional supplies, and staff training to name a few.
2022-006
FAC accepted this audit on December 5, 2022 — management decision was due June 5, 2023.
Criteria The Academy’s internal control structure should ensure that the accounting data is appropriately calculated, reconciled, and reported in accordance with generally accepted accounting principles. Condition The Academy’s accounts required significant adjustments to the general ledger to properly reflect the appropriate balance after the books and records were presented for audit. Cause/Effect While the accounts were reconciled throughout the year, the reconciliations completed had certain instances where the year-end reconciliation process didn’t match to the general ledger. Recommendation The Academy should institute monthly and yearly closing procedures to ensure that all accounts are reconciled and match the general ledger.
Show full finding ▾Hide full finding ▴Criteria The Academy’s internal control structure should ensure that the accounting data is appropriately calculated, reconciled, and reported in accordance with generally accepted accounting principles. Condition The Academy’s accounts required significant adjustments to the general ledger to properly reflect the appropriate balance after the books and records were presented for audit. Cause/Effect While the accounts were reconciled throughout the year, the reconciliations completed had certain instances where the year-end reconciliation process didn’t match to the general ledger. Recommendation The Academy should institute monthly and yearly closing procedures to ensure that all accounts are reconciled and match the general ledger.
The Accounting Team will adhere to the established monthly checklist and physically check off items as they are completed, including the date of completion. Management will review the monthly close procedural checklist to ensure established processes have been followed and completed and sign off on each month after completion/close is verified.
2021-001
Criteria The Academy should monitor the general ledger appropriately to ensure timely and accurate financial statements. Condition The Academy lacked appropriate overall monitoring of account balances during the year to compile complete and accurate financial reports, which resulted in many auditor-proposed journal entries. Context We noted that the Academy didn’t have a process in place to ensure that financial statements were accurate and complete. Cause/Effect The Academy did not identify the resources necessary to ensure general ledger accounts were monitored and analyzed by appropriate individuals, including taking an overview of fund activity to finalize the accounting records. As a result of the lack of appropriate overall monitoring procedures, there were many auditor-proposed journal entries. Recommendation The Academy should develop an overall monitoring procedure to ensure that all fund activity is complete, accurate, and logical. This includes assigning an appropriate individual to each general ledger account, and several individuals are responsible for the entire general ledger and financial statements to perform monitoring, analytical analysis, and adjustment as needed.
Show full finding ▾Hide full finding ▴Criteria The Academy should monitor the general ledger appropriately to ensure timely and accurate financial statements. Condition The Academy lacked appropriate overall monitoring of account balances during the year to compile complete and accurate financial reports, which resulted in many auditor-proposed journal entries. Context We noted that the Academy didn’t have a process in place to ensure that financial statements were accurate and complete. Cause/Effect The Academy did not identify the resources necessary to ensure general ledger accounts were monitored and analyzed by appropriate individuals, including taking an overview of fund activity to finalize the accounting records. As a result of the lack of appropriate overall monitoring procedures, there were many auditor-proposed journal entries. Recommendation The Academy should develop an overall monitoring procedure to ensure that all fund activity is complete, accurate, and logical. This includes assigning an appropriate individual to each general ledger account, and several individuals are responsible for the entire general ledger and financial statements to perform monitoring, analytical analysis, and adjustment as needed.
The Finance Director will review staffing resources and make appropriate adjustments to ensure that adequate levels of staffing and quality staff are recruited and retained. New ERP software has now been put in place to facilitate input, reporting, and analysis of fund accounting and accurate GL classification.
Criteria There should be a process in place to ensure that the Academy complies with laws and regulations. Condition There was an instance identified where the Academy was not in compliance with laws and regulations. State School Aid Act MCL 388.1718 requires that annual audits are submitted by November 1 to the Michigan Department of Education. Cause/Effect There was a change in staff and staff shortages, which led to noncompliance with MCL 388.1718. Recommendation We recommend that the Academy implement a process that identifies specific individuals to identify and monitor applicable compliance requirements throughout the year.
Show full finding ▾Hide full finding ▴Criteria There should be a process in place to ensure that the Academy complies with laws and regulations. Condition There was an instance identified where the Academy was not in compliance with laws and regulations. State School Aid Act MCL 388.1718 requires that annual audits are submitted by November 1 to the Michigan Department of Education. Cause/Effect There was a change in staff and staff shortages, which led to noncompliance with MCL 388.1718. Recommendation We recommend that the Academy implement a process that identifies specific individuals to identify and monitor applicable compliance requirements throughout the year.
The necessary review and analysis of GL accounts will be completed according to the established month end and annual close procedure check lists. Audit engagement will begin no later than August for FY 2023. Any new, as well as current staff, will receive periodic in-service centered around the MI Public School Accounting manual to ensure thorough understanding of the expectations and processes for school fund accounting.
Criteria There should be a process to ensure grant revenue is accurately and timely recorded. Condition The Academy didn’t have a process in place to ensure that grant revenue was reported accurately and timely. Context During our testing, we noted errors in recording various revenue, accounts receivable, and unearned revenue accounts. This included instances where revenues were not properly recorded, and drawdowns for grants were processed beyond the sixty-day requirement, which reduced revenue. Cause/Effect There is no process to ensure that grant revenues are timely and accurately accounted for. Recommendation We recommend that the Academy implement a process that would allow for the accurate recording of grant revenue and timely request of cash drawdowns.
Show full finding ▾Hide full finding ▴Criteria There should be a process to ensure grant revenue is accurately and timely recorded. Condition The Academy didn’t have a process in place to ensure that grant revenue was reported accurately and timely. Context During our testing, we noted errors in recording various revenue, accounts receivable, and unearned revenue accounts. This included instances where revenues were not properly recorded, and drawdowns for grants were processed beyond the sixty-day requirement, which reduced revenue. Cause/Effect There is no process to ensure that grant revenues are timely and accurately accounted for. Recommendation We recommend that the Academy implement a process that would allow for the accurate recording of grant revenue and timely request of cash drawdowns.
Management will ensure experienced staff is recruited, retained, and trained to support grant revenues, which are accurately drawn and reported to an appropriate accountant for recording.
Criteria The building leader and the business office approve invoices. Condition Controls in place were not adequate to ensure that expenditures were approved by the building leader. Context During our testing, we noted multiple invoices that had not been properly approved. Cause/Effect The established internal control procedures related to approving an invoice were overlooked in several instances. The effect of unapproved invoices can cause unauthorized disbursements or budget overruns. Recommendation We recommend that the Academy implement procedures to ensure each invoice has the proper approval before payment.
Show full finding ▾Hide full finding ▴Criteria The building leader and the business office approve invoices. Condition Controls in place were not adequate to ensure that expenditures were approved by the building leader. Context During our testing, we noted multiple invoices that had not been properly approved. Cause/Effect The established internal control procedures related to approving an invoice were overlooked in several instances. The effect of unapproved invoices can cause unauthorized disbursements or budget overruns. Recommendation We recommend that the Academy implement procedures to ensure each invoice has the proper approval before payment.
Management has procured New ERP software that supports clear invoicing and purchasing approval processes within the system. Management will have individual training with building leaders to refine the purchasing approval process through the new accounting software, as well as training with front office staff on the collection of the appropriate paperwork upon receipt of deliveries.
Michigan Department of Education awarded the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) program to public school academies operating before fiscal year 2022. Under the program, Academies cannot allow the transfer of ESSER funding to academies open after fiscal year 2021. Condition The Academy transferred ESSER funds based on the intergovernmental agreement and approved a consolidated application that identified Lincoln-King Adams-Young Academy as a second-tier subrecipient. However, the State of Michigan deemed the transfer as unallowable incurred expenditures ineligible. The Academy firmly disputes that the transfers were unallowable because of the pre-approvals received by the Academy to be a sub-recipient of a federal award but supports trying to resolve the relevant issues. Questioned Cost Questioned costs included amounts transferred to Lincoln-King Adams-Young Academy, which totaled $683,606 in Fiscal Year 22. Context Subsequent to year-end, we were made aware that the transfers were unallowable. Cause and Effect The Academy relied on the approved consolidated application noting the use of funds for Lincoln-King Adams-Young Academy.
Show full finding ▾Hide full finding ▴Michigan Department of Education awarded the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) program to public school academies operating before fiscal year 2022. Under the program, Academies cannot allow the transfer of ESSER funding to academies open after fiscal year 2021. Condition The Academy transferred ESSER funds based on the intergovernmental agreement and approved a consolidated application that identified Lincoln-King Adams-Young Academy as a second-tier subrecipient. However, the State of Michigan deemed the transfer as unallowable incurred expenditures ineligible. The Academy firmly disputes that the transfers were unallowable because of the pre-approvals received by the Academy to be a sub-recipient of a federal award but supports trying to resolve the relevant issues. Questioned Cost Questioned costs included amounts transferred to Lincoln-King Adams-Young Academy, which totaled $683,606 in Fiscal Year 22. Context Subsequent to year-end, we were made aware that the transfers were unallowable. Cause and Effect The Academy relied on the approved consolidated application noting the use of funds for Lincoln-King Adams-Young Academy.
Even though the Academy transferred $683,606 of ESSER funds to LKAYA based on the intergovernmental agreement that was in place during that time, the Academy itself did incur ESSER eligible costs that could have been applied against these ESSER dollars if they had remained within the Academy. The costs incurred involved improvements to technology, maintaining and increasing additional staff, curriculum materials, instructional supplies, and staff training to name a few.
FAC accepted this audit on September 11, 2024 — management decision was due March 11, 2025.
Criteria The Academy’s internal control structure should ensure that the accounting data is appropriately calculated, reconciled, and reported in accordance with generally accepted accounting principles. Condition The Academy’s accounts required significant adjustments to the general ledger to properly reflect the appropriate balance after the books and records were presented for audit. Cause/Effect While the accounts were reconciled throughout the year, the reconciliations completed had certain instances where the year-end reconciliation process didn’t match to the general ledger. Recommendation The Academy should institute monthly and yearly closing procedures to ensure that all accounts are reconciled and match the general ledger.
Show full finding ▾Hide full finding ▴Criteria The Academy’s internal control structure should ensure that the accounting data is appropriately calculated, reconciled, and reported in accordance with generally accepted accounting principles. Condition The Academy’s accounts required significant adjustments to the general ledger to properly reflect the appropriate balance after the books and records were presented for audit. Cause/Effect While the accounts were reconciled throughout the year, the reconciliations completed had certain instances where the year-end reconciliation process didn’t match to the general ledger. Recommendation The Academy should institute monthly and yearly closing procedures to ensure that all accounts are reconciled and match the general ledger.
The Accounting Team will adhere to the established monthly checklist and physically check off items as they are completed, including the date of completion. Management will review the monthly close procedural checklist to ensure established processes have been followed and completed and sign off on each month after completion/close is verified.
2021-001
Criteria The Academy should monitor the general ledger appropriately to ensure timely and accurate financial statements. Condition The Academy lacked appropriate overall monitoring of account balances during the year to compile complete and accurate financial reports, which resulted in many auditor-proposed journal entries. Context We noted that the Academy didn’t have a process in place to ensure that financial statements were accurate and complete. Cause/Effect The Academy did not identify the resources necessary to ensure general ledger accounts were monitored and analyzed by appropriate individuals, including taking an overview of fund activity to finalize the accounting records. As a result of the lack of appropriate overall monitoring procedures, there were many auditor-proposed journal entries. Recommendation The Academy should develop an overall monitoring procedure to ensure that all fund activity is complete, accurate, and logical. This includes assigning an appropriate individual to each general ledger account, and several individuals are responsible for the entire general ledger and financial statements to perform monitoring, analytical analysis, and adjustment as needed.
Show full finding ▾Hide full finding ▴Criteria The Academy should monitor the general ledger appropriately to ensure timely and accurate financial statements. Condition The Academy lacked appropriate overall monitoring of account balances during the year to compile complete and accurate financial reports, which resulted in many auditor-proposed journal entries. Context We noted that the Academy didn’t have a process in place to ensure that financial statements were accurate and complete. Cause/Effect The Academy did not identify the resources necessary to ensure general ledger accounts were monitored and analyzed by appropriate individuals, including taking an overview of fund activity to finalize the accounting records. As a result of the lack of appropriate overall monitoring procedures, there were many auditor-proposed journal entries. Recommendation The Academy should develop an overall monitoring procedure to ensure that all fund activity is complete, accurate, and logical. This includes assigning an appropriate individual to each general ledger account, and several individuals are responsible for the entire general ledger and financial statements to perform monitoring, analytical analysis, and adjustment as needed.
The Finance Director will review staffing resources and make appropriate adjustments to ensure that adequate levels of staffing and quality staff are recruited and retained. New ERP software has now been put in place to facilitate input, reporting, and analysis of fund accounting and accurate GL classification.
Criteria There should be a process in place to ensure that the Academy complies with laws and regulations. Condition There was an instance identified where the Academy was not in compliance with laws and regulations. State School Aid Act MCL 388.1718 requires that annual audits are submitted by November 1 to the Michigan Department of Education. Cause/Effect There was a change in staff and staff shortages, which led to noncompliance with MCL 388.1718. Recommendation We recommend that the Academy implement a process that identifies specific individuals to identify and monitor applicable compliance requirements throughout the year.
Show full finding ▾Hide full finding ▴Criteria There should be a process in place to ensure that the Academy complies with laws and regulations. Condition There was an instance identified where the Academy was not in compliance with laws and regulations. State School Aid Act MCL 388.1718 requires that annual audits are submitted by November 1 to the Michigan Department of Education. Cause/Effect There was a change in staff and staff shortages, which led to noncompliance with MCL 388.1718. Recommendation We recommend that the Academy implement a process that identifies specific individuals to identify and monitor applicable compliance requirements throughout the year.
The necessary review and analysis of GL accounts will be completed according to the established month end and annual close procedure check lists. Audit engagement will begin no later than August for FY 2023. Any new, as well as current staff, will receive periodic in-service centered around the MI Public School Accounting manual to ensure thorough understanding of the expectations and processes for school fund accounting.
Criteria There should be a process to ensure grant revenue is accurately and timely recorded. Condition The Academy didn’t have a process in place to ensure that grant revenue was reported accurately and timely. Context During our testing, we noted errors in recording various revenue, accounts receivable, and unearned revenue accounts. This included instances where revenues were not properly recorded, and drawdowns for grants were processed beyond the sixty-day requirement, which reduced revenue. Cause/Effect There is no process to ensure that grant revenues are timely and accurately accounted for. Recommendation We recommend that the Academy implement a process that would allow for the accurate recording of grant revenue and timely request of cash drawdowns.
Show full finding ▾Hide full finding ▴Criteria There should be a process to ensure grant revenue is accurately and timely recorded. Condition The Academy didn’t have a process in place to ensure that grant revenue was reported accurately and timely. Context During our testing, we noted errors in recording various revenue, accounts receivable, and unearned revenue accounts. This included instances where revenues were not properly recorded, and drawdowns for grants were processed beyond the sixty-day requirement, which reduced revenue. Cause/Effect There is no process to ensure that grant revenues are timely and accurately accounted for. Recommendation We recommend that the Academy implement a process that would allow for the accurate recording of grant revenue and timely request of cash drawdowns.
Management will ensure experienced staff is recruited, retained, and trained to support grant revenues, which are accurately drawn and reported to an appropriate accountant for recording.
Criteria The building leader and the business office approve invoices. Condition Controls in place were not adequate to ensure that expenditures were approved by the building leader. Context During our testing, we noted multiple invoices that had not been properly approved. Cause/Effect The established internal control procedures related to approving an invoice were overlooked in several instances. The effect of unapproved invoices can cause unauthorized disbursements or budget overruns. Recommendation We recommend that the Academy implement procedures to ensure each invoice has the proper approval before payment.
Show full finding ▾Hide full finding ▴Criteria The building leader and the business office approve invoices. Condition Controls in place were not adequate to ensure that expenditures were approved by the building leader. Context During our testing, we noted multiple invoices that had not been properly approved. Cause/Effect The established internal control procedures related to approving an invoice were overlooked in several instances. The effect of unapproved invoices can cause unauthorized disbursements or budget overruns. Recommendation We recommend that the Academy implement procedures to ensure each invoice has the proper approval before payment.
Management has procured New ERP software that supports clear invoicing and purchasing approval processes within the system. Management will have individual training with building leaders to refine the purchasing approval process through the new accounting software, as well as training with front office staff on the collection of the appropriate paperwork upon receipt of deliveries.
Michigan Department of Education awarded the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) program to public school academies operating before fiscal year 2022. Under the program, Academies cannot allow the transfer of ESSER funding to academies open after fiscal year 2021. Condition The Academy transferred ESSER funds based on the intergovernmental agreement and approved a consolidated application that identified Lincoln-King Adams-Young Academy as a second-tier subrecipient. However, the State of Michigan deemed the transfer as unallowable incurred expenditures ineligible. The Academy firmly disputes that the transfers were unallowable because of the pre-approvals received by the Academy to be a sub-recipient of a federal award but supports trying to resolve the relevant issues. Questioned Cost Questioned costs included amounts transferred to Lincoln-King Adams-Young Academy, which totaled $683,606 in Fiscal Year 22. Context Subsequent to year-end, we were made aware that the transfers were unallowable. Cause and Effect The Academy relied on the approved consolidated application noting the use of funds for Lincoln-King Adams-Young Academy.
Show full finding ▾Hide full finding ▴Michigan Department of Education awarded the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) program to public school academies operating before fiscal year 2022. Under the program, Academies cannot allow the transfer of ESSER funding to academies open after fiscal year 2021. Condition The Academy transferred ESSER funds based on the intergovernmental agreement and approved a consolidated application that identified Lincoln-King Adams-Young Academy as a second-tier subrecipient. However, the State of Michigan deemed the transfer as unallowable incurred expenditures ineligible. The Academy firmly disputes that the transfers were unallowable because of the pre-approvals received by the Academy to be a sub-recipient of a federal award but supports trying to resolve the relevant issues. Questioned Cost Questioned costs included amounts transferred to Lincoln-King Adams-Young Academy, which totaled $683,606 in Fiscal Year 22. Context Subsequent to year-end, we were made aware that the transfers were unallowable. Cause and Effect The Academy relied on the approved consolidated application noting the use of funds for Lincoln-King Adams-Young Academy.
Even though the Academy transferred $683,606 of ESSER funds to LKAYA based on the intergovernmental agreement that was in place during that time, the Academy itself did incur ESSER eligible costs that could have been applied against these ESSER dollars if they had remained within the Academy. The costs incurred involved improvements to technology, maintaining and increasing additional staff, curriculum materials, instructional supplies, and staff training to name a few.
FAC accepted this audit on November 30, 2021 — management decision was due May 30, 2022.
REPEAT FINDING OF 2020-001 AND 2019-002 Finding Type ? Significant Deficiency and Noncompliance Criteria ? Academies with Title I Part A allocations of more than $500,000 are required to reserve at least 1% of for parental involvement activities. Additionally, academies must distribute not less than 90% of the amount reserved for parental involvement activities. Condition ? The Academy did not spend at least 90% of the amount reserved on parental involvement activities. Cause / Effect ? The Academy did not utilize at least 90% of the amount reserved for parental involvement activities. The effect was a violation of Title I Part A grant requirements. Recommendation ? The Academy should review its grant allocation and expenditure process to ensure that the proper amounts reserved for parental involvement are spent on qualifying activities. Auditee Response ? The auditee agrees with the finding. The Academy is currently reviewing its process to ensure that amounts reserved are spent in compliance with the grant requirements.
Show full finding ▾Hide full finding ▴REPEAT FINDING OF 2020-001 AND 2019-002 Finding Type ? Significant Deficiency and Noncompliance Criteria ? Academies with Title I Part A allocations of more than $500,000 are required to reserve at least 1% of for parental involvement activities. Additionally, academies must distribute not less than 90% of the amount reserved for parental involvement activities. Condition ? The Academy did not spend at least 90% of the amount reserved on parental involvement activities. Cause / Effect ? The Academy did not utilize at least 90% of the amount reserved for parental involvement activities. The effect was a violation of Title I Part A grant requirements. Recommendation ? The Academy should review its grant allocation and expenditure process to ensure that the proper amounts reserved for parental involvement are spent on qualifying activities. Auditee Response ? The auditee agrees with the finding. The Academy is currently reviewing its process to ensure that amounts reserved are spent in compliance with the grant requirements.
Findings and Recommendations: 2021 ? 002: Repeat Finding (2020-001 and 2019-002) Finding Type: Significant Deficiency and Noncompliance. Condition: The Academy was not in compliance with regulatory requirements under Title I Part A that require 90% spending of the parental involvement activity resources be spent within the grant year. Recommendation: The Academy should review its grant allocation and expenditure process to ensure that the proper amounts reserved for parental involvement are spent on qualifying activities. Corrective Action Plan: The Business Office is providing monthly budget to actual reporting of restricted funds for grants to the program staff and grant manager. This reporting will ensure all necessary parties are aware of the available resources for parental involvement and provide them with the necessary planning time to utilize the resources to meet the objectives. Responsible Department: The Academy?s business department. Responsible Person: Trina Harrold (Director of Finance). Planned Completion Date (TBD or Date): Immediate.
2020-001
FAC accepted this audit on December 8, 2020 — management decision was due June 8, 2021.
REPEAT FINDING OF 2019-002 Finding Type ? Noncompliance Criteria ? Academies with Title I Part A allocations of more than $500,000 are required to reserve at least 1% of for parental involvement activities. Additionally, academies must distribute not less than 90% of the amount reserved for parental involvement activities. Condition ? The Academy did not spend at least 90% of the amount reserved on parental involvement activities. Cause / Effect ? The Academy did not utilize at least 90% of the amount reserved for parental involvement activities. The effect was a violation of Title I Part A grant requirements. Recommendation ? The Academy should review its grant allocation and expenditure process to ensure that the proper amounts reserved for parental involvement are spent on qualifying activities. Auditee Response ? The auditee agrees with the finding. The Academy is currently reviewing its process to ensure that amounts reserved are spent in compliance with the grant requirements.
Show full finding ▾Hide full finding ▴REPEAT FINDING OF 2019-002 Finding Type ? Noncompliance Criteria ? Academies with Title I Part A allocations of more than $500,000 are required to reserve at least 1% of for parental involvement activities. Additionally, academies must distribute not less than 90% of the amount reserved for parental involvement activities. Condition ? The Academy did not spend at least 90% of the amount reserved on parental involvement activities. Cause / Effect ? The Academy did not utilize at least 90% of the amount reserved for parental involvement activities. The effect was a violation of Title I Part A grant requirements. Recommendation ? The Academy should review its grant allocation and expenditure process to ensure that the proper amounts reserved for parental involvement are spent on qualifying activities. Auditee Response ? The auditee agrees with the finding. The Academy is currently reviewing its process to ensure that amounts reserved are spent in compliance with the grant requirements.
November 25, 2020 Federal Audit Clearinghouse RE: Washington-Parks Academy Corrective Action Plan Fiscal Year Ended: June 30, 2020 Finding Number 2020-001 Condition: The Academy was not in compliance with regulatory requirements under Title I Part A that require 90% spending of the parental involvement activity resources be spent within the grant year. Planned Corrective Action: The business office will provide monthly budget to actual reporting of restricted funds for grants to the program staff and grant manager. This reporting will ensure all necessary parties are aware of the available resources for parent involvement and provide them with the necessary planning time to utilize the resources to meet the objectives. Contact person responsible for correction action: Kathleen Blumberg, Comptroller Estimated Completion Date: December 31, 2020
2019-002
FAC accepted this audit on November 19, 2019 — management decision was due May 19, 2020.
Finding Type ? Noncompliance Criteria ? The Academy?s with Title I Part A allocations of more than $500,000 are required to reserve at least 1% of for parental involvement activities. Additionally, the Academy must distribute not less than 90% of the amount reserved for parental involvement activities. Condition ? The did not spend at least 90% of the amount reserved on parental involvement activities. Cause / Effect ? The Academy did not utilize at least 90% of the amount reserved for parental involvement activities. The effect was a violation of Title I Part A grant requirements. Recommendation ? The Academy should review its grant allocation and expenditure process to ensure that the proper amounts reserved for parental involvement are spent on qualifying activities. Auditee Response ? The auditee agrees with the finding. The Academy is currently reviewing its process to ensure that amounts reserved are spent in compliance with the grant requirements.
Show full finding ▾Hide full finding ▴Finding Type ? Noncompliance Criteria ? The Academy?s with Title I Part A allocations of more than $500,000 are required to reserve at least 1% of for parental involvement activities. Additionally, the Academy must distribute not less than 90% of the amount reserved for parental involvement activities. Condition ? The did not spend at least 90% of the amount reserved on parental involvement activities. Cause / Effect ? The Academy did not utilize at least 90% of the amount reserved for parental involvement activities. The effect was a violation of Title I Part A grant requirements. Recommendation ? The Academy should review its grant allocation and expenditure process to ensure that the proper amounts reserved for parental involvement are spent on qualifying activities. Auditee Response ? The auditee agrees with the finding. The Academy is currently reviewing its process to ensure that amounts reserved are spent in compliance with the grant requirements.
Condition: The Academy was not in compliance with regulatory requirements under Title I Part A that require 90% spending of the parental involvement activity resources be spent within the grant year. Planned Corrective Action: The business office will provide monthly budget to actual reporting of restricted funds for grants to the program staff and grant manager. This reporting will ensure all necessary parties are aware of the available resources for parent involvement and provide them with the necessary planning time to utilize the resources to meet the objectives. Contact person responsible for correction action: Kathleen Blumberg, Comptroller Estimated Completion Date: November 30, 2019
FAC accepted this audit on January 29, 2019 — management decision was due July 29, 2019.
GSA_MIGRATION
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GSA_MIGRATION
FAC accepted this audit on October 31, 2017 — management decision was due May 1, 2018.
FAC accepted this audit on October 4, 2016 — management decision was due April 4, 2017.
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