NELSONVILLE-YORK CITY SCHOOL DISTRICT

2 CFR § 400.1 gives regulatory effect to the Department of Agriculture for 2 CFR §200.302(b)(3) which provides that the financial management system of each non-Federal entity must provide for records that identify adequately the source and application of funds for federally- funded activities. These records must contain information pertaining to federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. 2 CFR § 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 7 CFR §§ 210.7(c), 210.8(c), and 225.9(d)) provide that at a minimum, a claim must include the number of reimbursable meals/milk served by category and type during the period (generally a month) covered by the claim. All meals claimed for reimbursement must (a) be of types authorized by the school food authority’s, institution’s, or sponsor’s administering agency; (b) be served to eligible children; and (c) be supported by accurate meal counts and records indicating the number of meals served by category and type. Eleven percent of the site claim form submissions during fiscal year 2023 were underreported, resulting in an under-reimbursement of $9,043. These errors occurred due to a weakness in internal controls, which failed to ensure site claim forms for reimbursable meals served at each building and submitted by the District to the Ohio Department of Education were entered correctly. The District should implement policies and procedures to help ensure that monthly site claim forms are reviewed and submitted to reflect actual counts for reimbursable meals served. Further, measures should be taken to ensure staff completing the site claim forms are adequately trained.

2 CFR 200.313(d)(1) provides that property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the Federal award identification number), who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. The District purchased a bus in the amount of $102,963 and completed office renovations in the amount of $26,750 and an entrance brivo and aiphone project and in the amount of $15,100 using their Education Stabilization Fund (ESSER II) AL# 84.425D federal funding. Due to a lack of proper internal controls over Federal Grants management, the District failed to record these purchases and projects in their capital asset records. The Treasurer and Superintendent should ensure all capital acquisitions are added to the capital asset listing and include all required information in the listing, noting the assets were purchased with federal funds.

2 C.F.R. ? 3474.1 gives regulatory effect to the Department of Education for Appendix II to 2 C.F.R. ? 200 Paragraph D which states: (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provision Applicable to Contract Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-Federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland "Anti-Kickback" Act (40 U.S.C. 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, "Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States"). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. 2 CFR ? 176.190 Award term - Wage rate requirements under Section 1606 of the Recovery Act indicates when issuing announcements or requesting applications for Recovery Act programs or activities that may involve construction, alteration, maintenance, or repair the agency shall use the award term described in the following paragraphs: (a) Section 1606 of the Recovery Act requires that all laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by and through the Federal Government pursuant to the Recovery Act shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code. The District expended $90,884 of its Education Stabilization Fund (ESSER II) AL# 84.425D federal grant funds for office renovations and flooring installation. Due to a lack of proper internal controls over Federal Grants management, the District?s contracts with these vendors did not include a provision to ensure the contactors complied with Federal wage rate requirements. Additionally, the District could not provide support that weekly certified payroll were provided by the contractors. Failure to notify contractors of the wage rate requirements may result in noncompliance with the prevailing wage requirements as well as potentially reduced future federal funding. The District should ensure contracts for construction in excess of $2,000 contain a provision the contractor comply with the Wage Rate Requirements and ensure certified payroll reports are provided weekly by the contractor. The District should obtain the necessary information from the contractor to document compliance with the program requirements and if the contractor failed to comply then they have an obligation under 29 CFR Part 5 to report all suspected or reported violations to the Federal awarding agency.

2 CFR ? 3474.1 gives regulatory effect to the Department of Education for 2 CFR ? 200.319 (a) which states, in part, all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and ? 200.320. ? 2 CFR ? 3474.1 gives regulatory effect to the Department of Education for 2 CFR ? 200.320 (b) which states, in part, when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with ? 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: 1. the sealed bid method if the acquisition meets the criteria in 2 CFR ? 200.320(b)(1); 2. the competitive proposals method under the conditions specified in 2 CFR ? 200.320(b)(2); 3. noncompetitive proposals method but only when one or more of five circumstances are met 2 CFR ? 200.320(c). 2 CFR ? 3474.1 gives regulatory effect to the Department of Education for 48 CFR part 2, subpart 2.1 which states, in part, the simplified acquisition threshold means $250,000. In fiscal year 2021, the District entered into a contract, including amendments, of $1,307,788 with PlugSmart for the replacement of rooftop units on district facilities. This contract was paid from the Education Stabilization Fund (ESSER II) AL# 84.425D federal grant in fiscal year 2022. The contract amount exceeded the simplified acquisition threshold of $250,000, which required the contract to use one of the procurement methods noted above. The District did not use any of the formal procurement methods before awarding the contract. The district did not contact the Ohio Department of Education for Sole Sourcing this contract. Failure to follow proper procurement methods may result in findings and the loss of federal funding. The District should follow the federal procurement requirements for all contracts exceeding the thresholds.

Title of Finding: Time and Effort Documentation Finding Number: 2021-001 Assistance Listing Number and Title: AL # 84.027 Special Education - Grants to States Federal Award Identification Number / Year: 2021 Federal Agency: U.S. Department of Education Compliance Requirement: Section B. ALLOWABLE COSTS/COST PRINCIPLES Pass-Through Entity: U.S. Department of Education Repeat Finding from Prior Audit? No Questioned Cost 2 C.F.R. ? 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. ? 200.430 which states, in part, that costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities. In addition, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; be incorporated into the official records of the non-Federal entity; and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. The District adopted Policy DECA - Administration of Federal Grant Funds June 8, 2016 to govern the controls and records needed to demonstrate Time and Effort for federal expenditures. The District used semi-annual certifications to meet the documentation requirements and serve as established internal control over the process. During fiscal year 2021, the District expended $38,385 from Special Education - Grants to States AL # 84.027 (fund 516) and $38,385 from the Title I Grants to Local Educational Agencies AL # 84.010 (fund 572) to pay the salary of the Director of Special Projects. The signed semi-annual certification on file documented the Director's entire salary related to the Title I Grants to Local Educational Agencies federal grant. As such, the $38,385 from Special Education - Grants to States AL # 84.027 is considered a questioned cost. Failure to maintain the appropriate time and effort documentation resulted in questioned costs and can result in reduced future federal funding or the requirement to repay the Ohio Department of Education. The Treasurer should ensure all employees charging salaries and benefits to federal grants maintain the appropriate documentation supporting the time spent on the grant, in accordance with the District?s policy. Appropriate supporting documentation could include semi-annual certifications for employees working solely on a single cost objective or timesheets when an employee works on multiple activities.