STURGIS PUBLIC SCHOOL DISTRICTNon-Profit

Finding Type - Significant deficiency Criteria - The School District's internal control structure should ensure that accounting data is properly calculated and reported for current liabilities and expenditures in accordance with generally accepted accounting principles (GAAP). Condition - The School District's general ledger contained certain adjusting journal entries that were required to reflect accurate accounts payable and related expenditure balances as of June 30, 2020. The School District is required to ensure that items are recorded within the correct fiscal year and that proper cutoff procedures are performed. These audit adjustments were proposed by the auditors. Context - Adjustments were made to the Energy Conservation Improvement Fund to record retainage payable that had not been recorded in the general ledger in the proper period. Cause - The School District had improperly excluded the retainage payable due as of year end prior to the audit adjusting entries. Effect - Prior to the adjustments identified, certain retainage payable and related expenditure accounts in the Energy Conservation Improvement Fund related to ongoing construction activity did not have accurate balances in accordance with GAAP. These items were not corrected by management during the audit process. Recommendation - We recommend that the School District implement procedures to ensure recording of retainage payable balances in the proper period during the year-end closing procedures and seek appropriate guidance for properly analyzing ongoing construction activity.

CFDA Number, Federal Agency, and Program Name - 10.553, 10.555, 10.559, Child Nutrition Cluster, U.S. Department of Agriculture None Federal Award Identification Number and Year - 190900/191900 (2019- 2020), 191970/201970 (2019-2020), 191960/201960/201980 (2019-2020), 200902 (2019-2020) Pass-through Entity - Michigan Department of Education Finding Type - Significant deficiency Repeat Finding - No Criteria - The School District's procedures should be designed to ensure that students receive the benefits for which they qualify. The School District is required to determine annually a child's eligibility for free or reduced meals based on the child's family income and family size or based on the child's household receiving benefits under various other federal programs per 7 CFR Section 225.15(f). Condition - One student tested for eligibility received reduced lunch; however, no eligibility documentation was maintained; thus, the student was deemed ineligible to receive the benefit. The School District's procedure for maintaining supporting documentation was not sufficient to prevent the error. Questioned Costs - None greater than $25,000 Identification of How Questioned Costs Were Computed - The questioned costs were determined by totaling the reduced benefits received by the student less the full pay that the student should have been required to pay. The error identified resulted in a known error of approximately $655 based on the changes in eligibility. Context - In 1 out of the 60 student applications reviewed, the proper documentation was not maintained. The student was provided the benefit of reduced lunch for the whole year. Cause and Effect - Applications are completed on paper or online and printed, at which time the application is filed for record-keeping purposes. Procedures were not followed to ensure proper documents obtained from students were retained. Recommendation - The School District's procedures should include a detailed review and tracking system for all applications filed.

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION