PERRY LOCAL SCHOOLSLocal Government

2 CFR 3474.1 gives regulatory effect to the Department of Education for 2 CFR §200.313(d) which requires procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, at a minimum, meet the following requirements: (1) 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 FAIN), who holds title, the acquisition date, and 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 sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. (5) If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. The United States Department of Education (USDE) clarified in the 2023 Office of Management and Budget (OMB) Compliance Supplement, "Any purchases with Education Stabilization Fund money in this category [minor remodeling] are subject to applicable inventory control, log maintenance, and disposition requirements consistent with Part 3, Section F, “Equipment/Real Property Management” of the Compliance Supplement." Due to the lack of an internal control(s) over inventory management for equipment and real property purchased from Federal grants, a school building renovation project for the School Based Health Center, in the amount of $374,154 paid from the COVID- 19 Education Stabilization Fund - AL #84.425C Governor’s Emergency Education Relief (GEER) funding was not added to the capital asset records of the School District. Noncompliance with the requirements of Federal grants may result in the loss of current or future federal funding and possible questioned costs in future audits. The School District should establish an internal control(s) over equipment and real property paid for from Federal grants to ensure that such assets with an acquisition cost which equals or exceeds the lesser of the School District’s capitalization threshold or $5,000, are added and maintained in the capital asset records until disposition.

Finding Number: 2022-002 Assistance Listing Number and Title: AL #84.027, #84.173 Special Education Cluster Federal Award Identification Number/ Year: 2022/2023 Federal Agency: U.S. Department of Education Compliance Requirement: Procurement and Suspension and Debarment Pass-Through Entity: Ohio Department of Education Repeat Finding from Prior Audit? No Ohio Rev. Code ?? 3313.843 and 3313.845 allow traditional schools to contract with Educational Service Centers (ESCs) to provide services as outlined in the agreement between the two parties. Ohio Rev. Code ?3313.843(C) requires these agreements to be filed with the Ohio Department of Education by the first day of July of the school year for which the agreement is in effect. Effective on December 26, 2014, 2 CFR ? 200.320 outlined the methods of procurement to be followed by state subrecipient non-Federal entities when expending certain types of Federal funds, including those received through Grant Agreements. However, 2 CFR ? 200.110(a), created a ?grace period? for compliance with 2 CFR ?200.320, by permitting non-Federal entities to comply with previously issued Office of Management and Budget procurement guidance for all fiscal years beginning prior to December 26, 2017. In January 2020, the Ohio Department of Education (ODE) published a form that allows schools to request ODE authorize a noncompetitive proposal for their ESC Services. This form is available on ODE?s website. During the fiscal year, the School District contracted with Allen County Educational Service Center (ESC) to provide purchased services. These services included expenditures of $46,283, which were paid for out of the Special Education Cluster Grants and subject to the Federal procurement laws. The School District did not complete the form that allows schools to request ODE authorize a noncompetitive proposal for their ESC Services that is available on the ODE website. Under 2 CFR ?200.320 the School District should have competitively bid the services needed or obtained price quotes from qualified sources as further defined in the School District?s procurement policy. The School District should develop a control(s) and/or procedure(s) to verify that established procurement procedures are followed when entering into contracts using Federal monies. The ODE form that allows schools to request ODE authorize a noncompetitive proposal for their ESC Services should be utilized for any ESC contract in the future. Failure to follow proper procurement procedures could result in contracts awarded to entities which do not meet all the needs of the School District or have a cost significantly higher than their competitors, as well as a loss in future federal funding and possible questioned costs in future audits.

Noncompliance and Material Weakness 2 CFR ? 400.1 gives regulatory effect to the Department of Agriculture for 2 CFR ? 200.303 which requires that non-Federal entities receiving Federal awards (i.e., auditee management) tp 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. Thirty percent of the site claim form submissions tested were incorrectly calculated. 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 received an unsubstantiated reimbursement of $3 as a result of these errors. The District should implement policies and procedures to help ensure that monthly site claim forms for all District buildings are reviewed and submitted to reflect actual counts for reimbursable meals served.