Batavia Local School DistrictLocal Government

Material Weakness/Noncompliance – Schedule of Expenditures of Federal Awards 2 CFR § 200.510(b) states, in part, that the auditee must prepare a schedule of expenditures of Federal awards 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 Basis for determining Federal awards expended. At a minimum, the schedule must: a) 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. b) 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. c) Provide total Federal awards expended for each individual Federal program and the Assistance Listing 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. d) Include the total amount provided to subrecipients from each Federal program. e) 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. f) 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. The School District did prepare a Schedule of Expenditures of Federal Awards; however, total federal expenditures were understated by $675,306. Adjustments were made to the Schedule of Expenditures of Federal Awards. Inaccurate completion of the Schedule of Expenditures of Federal Awards could lead to inaccurate reporting of federal expenditures by the School District and could jeopardize future federal funding. We recommend the School District review/update their current policies and procedures, including, prior to submitting the federal schedule to the auditors, a second review of data, support and amounts be reported, to help ensure accurate information is provided. Officials' Response: See Corrective Action Plan

Material Weakness/Noncompliance – Questioned Cost 47 CFR § 54.1710, in part, requires entities requesting funding to certify they are only seeking support for eligible equipment and/or services provided to students and school staff who would otherwise lack connected devices and/or broadband services sufficient to engage in remote learning. Additionally, 47 CFR § 54.1715, requires equipment inventory records to be maintained and identify: (i) The device or equipment type (i.e. laptop, table, mobile hotspot, modem, router); (ii) The device or equipment make/model; (iii) The device or equipment serial number; (iv) The full name of the person to whom the device or other piece of equipment was provided; and (v) The dates the device or other piece of equipment was loaned out and returned to the school or library, or the date the school or library was notified that the device or other piece of equipment was missing, lost, or damaged. 47 CFR 54.8(d), in part, states “unless otherwise ordered, any persons suspended or debarred shall be excluded from activities associated with or related to the schools and libraries support mechanism.” Furthermore, the School District’s Board policy #6325 – Procurement – Federal Grants/Funds, in part, states “The District shall not subcontract with or award subgrants to any person or company who is debarred or suspended. For contracts over $25,000, the District shall confirm that the vendor is not debarred or suspended by either checking the Federal government’s System for Award Management, which maintains a list of such debarred or suspended vendors at www.sam.gov; collecting a certification from the vendor; or adding a clause or condition to the covered transaction with that vendor. (2 CFR Part 180 Subpart C).” The School District estimated unmet need for eligible equipment when it applied for ECF Program funds. However, the School District was unable to provide, at the time the reimbursement request was submitted, the determination of the actual number of eligible students with the unmet need, as required by the ECF Program. Additionally, the School District did not maintain a detailed inventory listing of the equipment, consisting of 1,305 laptops, as required by the ECF Program. Therefore, $391,500 (1,305 laptops, purchased at $300/unit) in expenditures from the Emergency Connectivity Fund (ECF) Program is considered a questioned cost. Furthermore, the School District did not have proper internal controls in place to verify and maintain documentation supporting the vendor had not been suspended or debarred. Failure to maintain the appropriate supporting documentation in according with the ECF Program requirements (reimbursements requests, unmet need determinations, and inventory listings), could result in additional questioned costs, and reduced future federal funding. Additionally, not having appropriate controls in place may result in issuing payments, using federal funds, to vendors that are suspended or debarred. We recommend the School District implement additional control procedures that ensure all staff fully understand the ECF Program requirements and procedures are in place to support reimbursement requests. Additionally, we recommend that prior to entering into contracts, the School District verify and maintain supporting documentation that the vendors are not suspended or debarred.

Material Weakness/Noncompliance – Schedule of Expenditures of Federal Awards 2 CFR § 200.510(b) states, in part, that the auditee must prepare a schedule of expenditures of Federal awards 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 Basis for determining Federal awards expended. At a minimum, the schedule must: a) 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. b) 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. c) Provide total Federal awards expended for each individual Federal program and the Assistance Listing 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. d) Include the total amount provided to subrecipients from each Federal program. e) 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. f) 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. The School District did prepare a Schedule of Expenditures of Federal Awards; however, total federal expenditures were understated by $1,559,951. Adjustments were made to the Schedule of Expenditures of Federal Awards. Inaccurate completion of the Schedule of Expenditures of Federal Awards could lead to inaccurate reporting of federal expenditures by the School District and could jeopardize future federal funding. We recommend the School District review/update their current policies and procedures, including, prior to submitting the federal schedule to the auditors, a second review of data, support and amounts be reported, to help ensure accurate information is provided.