ORCHARD VIEW SCHOOLSLocal Government

Finding 2023-004: Education Stabilization Fund Special Reporting Procedures U.S. Department of Education Pass-through agency: Michigan Department of Education Assistance Listing Numbers: 84.425D and 84.425U Award numbers: COVID-19 213712-2021 and COVID-19 213713-2122 Award year end: September 30, 2024 Specific Requirement: Reporting—Special Reporting Criteria: OMB No. 1810-0749 requires Education Stabilization Fund grantees to submit reports with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. Local educational agency/subrecipients submit data to the state education agency (SEA) /Governor for the SEA’s/Governor’s report. Questioned Costs: None. Condition: The required learning loss plan and budget reports were not timely prepared and posted to the transparency page of the Schools District’s website. Context: During our detailed testing of special reporting for the Education Stabilization Fund programs, we noted that the learning loss plan and budget reports were prepared to comply with federal requirements. However, the reports were not timely prepared or timely reviewed by the program supervisor with documented approval. The reports were subsequently prepared after the School District received a letter from the Michigan Department of Education indicating that the School District had missed the reporting due date. Effect: Failure to timely prepare and review special reporting results in non-compliance with federal compliance requirements. Cause: The School District experienced personnel changes and shortages within the accounting function during the year, including a two-month gap between business managers, and an extended medical leave, which caused some special reports to not be completed timely as there was no available replacement during this time. Repeat Finding: This is not a repeat finding. Recommendation: The School District should provide training to accounting department personnel in federal programs of the requirements for special reporting under Uniform Grant Guidance, and the School District should require the necessary special reports to be timely prepared and reviewed by the appropriate accounting department personnel. Views of Responsible Officials: The School District agrees with this finding.

Finding 2023-005: Child Nutrition Cluster Federal Reimbursement Receipting Procedures U.S. Department of Agriculture Pass-through agency: Michigan Department of Education Assistance Listing Numbers: 10.553, 10.555, and 10.559 Award numbers: 221970, 231970, 220910, 221960, 231960, 220900 and 230900 Award year ends: June 30, 2023 and September 30, 2023 Specific Requirement: Special Tests and Provisions—Non-Profit School Food Service Accounts Criteria: 7 CFR sections 210.14(a), 210.14(c), 210.19(a)(2), 215.7(d)(1), 220.2, and 220.7(e)(1)(i) requires a School District to account for all revenues and expenditures of its non-profit school food service in accordance with state and federal requirements. A school food authority must operate its food services on a non-profit basis. All revenue generated by the school food service must be used to operate and improve its food services, and this revenue must be properly and timely credited to the food service account. Questioned Costs: None. Condition: Monthly federal reimbursement receipts were not timely credited to the proper food service revenue accounts. Context: During our detailed testing of monthly federal reimbursement receipts, we noted five of the five monthly receipts tested were properly credited to the corresponding food service revenue accounts. However, the timing of the receipt postings to the general ledger ranged from two to five months after the receipt dates. Effect: School District’s cash and food service revenues were misstated for extended periods throughout the fiscal year, and errors or the misappropriation of funds could have occurred without timely detection. Cause: The School District experienced personnel changes and shortages within the accounting function during the year, including a two-month gap between business managers, and an extended medical leave, which caused some food service revenue postings to not be completed timely as there was no available replacement during this time. Repeat Finding: This is not a repeat finding. Recommendation: The School District should provide training to accounting department personnel of the requirements for non-profit school food service accounts under Uniform Grant Guidance, and the School District should require payments to be timely receipted and credited to the proper food service accounts. Views of Responsible Officials: The School District agrees with this finding.

U.S. Department of Education Finding 2022-001: Education Stabilization Fund??Governor?s Emergency Education Relief (GEER) and Elementary and Secondary School Emergency Relief (ESSER) Fund Semi-Annual Certification Procedures Pass-through entity: Michigan Department of Education (MDE) Assistance Listing Number(s): 84.425C and 84.425D Award Numbers: COVID-19 211202-2122, COVID-19 213712-2021, COVID-19 213722-2122 and COVID-19 213742-2122 Award Year End: September 30, 2023 Specific Requirement: Allowable Costs/Cost Principles Criteria: Section 200.430 of the Cost Principles of the Title 2 U.S. Code of Federal Regulations (CFR) Part 200?Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires charges to federal award for salaries and wages to be based on records that accurately reflect the work performed. These records must (1) be supported by a system of internal controls which provide reasonable assurance that charges are accurate, allowable and properly allocated, (2) reasonably reflect total activity for which the employee is compensated, (3) encompass both federally assisted and all other activities compensated by the entity, (4) support the distribution of the employee?s wages among specific cost objectives if the employee works on more than one federal award, (5) be reconciled with payroll budget estimates with necessary adjustments made to accounting records to ensure that excess costs are not charged to federal programs. Appendix B to 2 CFR, Part 225?Selected Items of Cost indicates that where employees are expected to work solely on a single Federal award or cost objective, charges for their salaries and wages will be supported by periodic certifications that the employees worked solely on that program for the period covered by the certification. These certifications will be prepared at least semi-annually and will be signed by the employee or supervisory official having first-hand knowledge of the work performed by the employee. Questioned Costs: None. Condition: During our detailed testing of time-and-effort reporting for the Education Stabilization Fund??GEER/ESSER programs, we noted that semi-annual certifications were prepared to comply with federal time and effort requirements. However, the reports were not timely prepared or timely reviewed by the program supervisor with documented approval. Context: Ninety-five employees working in the federal program were eligible for semi-annual certifications because their payroll costs were fully allocated to a single federal program or cost objective. One certification was prepared by each building supervisor for each six-month period during the fiscal year. In total, the certifications properly listed all eligible 95 employees that worked in the federal program during the respective semesters. While the certifications contained the proper components, including documented supervisor approval, they were not prepared timely as they were completed and certified during the audit process. The sample was not a statistically valid sample. Effect: Failure to timely and properly prepare and review time-and-effort reporting could allow improper payroll expenses to be charged to the School District?s federal programs. As a result, payroll compensation and fringe benefits charged for these employees could be disallowed, or there could be missed opportunities for reimbursement. Cause: The School District program personnel overlooked the federal requirements for time-and-effort reporting and the semi-annual certifications were not timely prepared. Repeat Finding: This is not a repeat finding. Recommendation: The School District should provide training to educate all employees working in federal programs of the requirements for documenting personnel expenses under Uniform Grant Guidance, and the School District should require proper time-and-effort documentation to be timely prepared and certified by the appropriate program supervisor. Views of Responsible Officials: The School District agrees with this finding.

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