Academy of America and SubsidiariesNon-Profit

Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425U, Department of Education, Education Stabilization Fund (ESSER II, TCLAS ESSER III, ARP ESSER III) Federal Award Identification Number and Year: 20521001015809, 20521001057810 Pass-through Entity – Texas Education Agency Finding Type – Material weakness in internal control over compliance Repeat Finding Yes Criteria – Per 2 CFR § 200.303, The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition – During our testing for Reporting, it was noted that 3 out of 3 reports selected for testing did not have evidence of review and approval. Identification of How Questioned Costs Were Computed – N/A Questioned Costs – None Cause – Management did not follow their internal controls. Effect – Certain reports did not have evidence of review and approval. Recommendation – We recommend that all reports have proper evidence of review and approval. View of Responsible Officials and Corrective Action Plan – Management will monitor the review and approval procedures for reporting to ensure that reports are signed off to indicated and document that review and approval has been made.

Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425U, Department of Education, Education Stabilization Fund (ESSER II, TCLAS ESSER III, ARP ESSER III) Federal Award Identification Number and Year: 20521001015809, 20521001057810 Pass-through Entity – Texas Education Agency Finding Type – Material weakness in internal control over compliance Criteria – Per 2 CFR 200.512 (a) (1), the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Per 2 CFR 200.501 (b), a non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with § 200.514. Condition – The data collection form was not submitted within the required time as required by 2 CFR 200.512 for the year ended August 31, 2023. Cause – Bexar County Academy’s (the “Academy”) books and records for the 2023 fiscal year were not reconciled and closed in a timely manner. Effect – The data collection form was not submitted within the required time as required by 2 CFR 200.512. Recommendation – We recommend that the Academy develop a reliable system to close the financial records in a timely manner. View of Responsible Officials and Corrective Action Plan – The Academies will develop a reliable system that will lead to the timely processing of the financial records by reviewing existing procedures to identify bottlenecks and areas of improvement. Feedback will be gathered from team members involved in the financial record keeping process so that standard procedures can be development and implemented. Furthermore, opportunities to automate processes and use software to assist with data entry, record reconciliation, and reporting can be used. This will significantly decrease manual workload and improve accuracy and timeliness.

Reference Number Finding 2022-004 Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425U, Department of Education, COVID-19: ARP ESSER III Federal Award Identification Number and Year: 21528001015809, 21528042015809, 21528001057810, 21528042057810, 2022 Pass-through Entity ? Texas Education Agency Finding Type ? Material weakness in internal control over compliance Repeat Finding ? No Criteria ? Per 2 CFR ? 200.303, The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition ? During our testing for Reporting, it was noted that 2 out of 4 reports selected for testing did have evidence of review and approval. Identification of How Questioned Costs Were Computed ? N/A Questioned Costs ? None Cause ? Management did not follow their internal controls. Effect ? Certain reports did not have evidence of review and approval. Recommendation ? We recommend that all reports have proper evidence of review and approval. View of Responsible Officials and Corrective Action Plan ? The Academies have procedures in place requiring review and approval. Management believes that it was a limited number of items that may not have had written approval from a school administrator or the controller. Management will ensure that review and approval is properly documented by signature or an electronic approval.

ReferenceNumber Finding2021-003 Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425D, Department of Education, ESSER Cares IIFederal Award Identification Number and Year: 20521001015809, 20521001057810, 2021Pass-through Entity ? Texas Education AgencyFinding Type ? Material WeaknessRepeat Finding ? No Criteria ? Per 2 CFR ? 200.400, The non-Federal entity is responsible for the efficient and effective administration of the Federal award through the application of sound management practices. Per 2 CFR ? 200.405, a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received. This standard is met if the cost:(1) Is incurred specifically for the Federal award(2) Benefits both the Federal award and other work of the non-Federal entity and can be distributed in proportions that may be approximated using reasonable methods(3) Is necessary to the overall operation of the non-Federal entity and is assignable in part to the Federal award in accordance with the principles in this subpartCondition ? During our test work over Activities Allowed and Unallowed and Allowable Costs/Cost Principles compliance requirements, we selected 25 expenditures charged to the grant, totaling $117,950, and noted that 1 out of 25 expenditures, totaling $1,221 did not represent an allowable expenditure.Identification of How Questioned Costs Were Computed ? Error of $1,221 was extrapolated to the entire population. Extrapolated amount is $2,022. Below $25,000, therefore no need to report questioned costs.Questioned Costs ? $1,221 below reporting threshold of $25,000Context ? While the Management has an understanding of the Uniform Guidance regulations, the lack of monitoring caused the Organization not to fully comply with the Uniform Guidance requirements.Cause/Effect ? Management did not have effective controls in place to ensure they were in compliance with the requirement.Recommendation ? We recommend Management increase awareness of federal program compliance requirements and monitor compliance with the requirements on regular basis. In addition, we recommend that Management review its procedures and controls in place to ensure that disbursements of funds are consistent with both Uniform Administrative Requirements, Cost Principles, and Audit Requirements and grant agreement.View of Responsible Officials and Corrective Action Plan ? Management will take the necessary steps to increase team awareness of the federal grant compliance requirements, including additional training as necessary. Management will also strengthen its compliance monitoring by: (i) increasing the number of monthly reconciliations; and (ii) conducting bi-weekly meetings between the grant accountant, controller, grant compliance consultant and when necessary the school superintendent. Finally, Management will conduct meetings to review its applicable procedures and controls to ensure that disbursements are consistent with all regulatory requirements for costs and audit provisions and grant agreements.

2021-004 Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425D, Department of Education, ESSER Cares IIFederal Award Identification Number and Year: 20521001015809, 20521001057810, 2021Pass-through Entity ? Texas Education AgencyFinding Type ? Material Weakness Repeat Finding ? NoCriteria ? Per 2 CFR ? 200.400, the non-Federal entity is responsible for the efficient and effective administration of the Federal award through the application of sound management practices. Per 2 CFR ? 200.405, a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received. This standard is met if the cost:(1) Is incurred specifically for the Federal award(2) Benefits both the Federal award and other work of the non-Federal entity and can be distributed in proportions that may be approximated using reasonable methods(3) Is necessary to the overall operation of the non-Federal entity and is assignable in part to the Federal award in accordance with the principles in this subpart.Condition ? During our test work over Activities Allowed and Unallowed and Allowable Costs/Cost Principles compliance requirements, we selected 15 expenditures charged to the grant, and noted that 3 out of 15 payroll expenditures, totaling $6,348 were charged to the wrong federal grant.Identification of How Questioned Costs Were Computed ? 100% of the populated was tested therefore there was no need to extrapolate errorQuestioned Costs ? $6,348 below reporting threshold of $25,000.Context ? While the Management has an understanding of the Uniform Guidance regulations, the lack of monitoring caused the Organization not to fully comply with the Uniform Guidance requirements.Cause/Effect ? Management did not have effective controls in place to ensure they were in compliance with the requirement.Recommendation ? We recommend Management increase awareness of federal program compliance requirements and monitor compliance with the requirements on regular basis.View of Responsible Officials and Corrective Action Plan ? The Charter School Administration Services management will take the necessary steps for improve our team awareness of the federal grant compliance requirements. This will include additional monthly reconciliations, bi-weekly meetings between the grant accountant, controller, grant compliance consultant and when necessary the school superintendent. We will also have review meeting to ensure that we are consistent with all regulatory requirements for costs and audit provisions

2021-005 Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425D, Department of Education, ESSER Cares IIFederal Award Identification Number and Year: 20521001015809, 20521001057810, 2021Pass-through Entity ? Texas Education AgencyFinding Type ? Significant Deficiency over non-complianceRepeat Finding ? NoCriteria ? Per 2 CFR ? 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition ? The control over Cash Management compliance is in place; but is not being followed, therefore not operating effectively.Identification of How Questioned Costs Were Computed ? n/aQuestioned Costs ? n/aContext ? While the Management has an understanding of the Uniform Guidance regulations, the lack of monitoring caused the Organization not to fully comply with the Uniform Guidance requirements.Cause/Effect ? Internal control procedures were bypassed and not followed. Although no instances of noncompliance were noted, the Organization did not follow their own internal control polices and therefore instances of non-compliance could have taken place without management's knowledge.Recommendation ? We recommend that Management implements and maintains effective internal control over Cash Management and comply with 2 CFR 200.303 requirements.View of Responsible Officials and Corrective Action Plan ? While Management believes that effective controls are in place for our cash management systems, we will add additional monthly monitoring steps to ensure full compliance with 2 CFR 200.303. This includes monthly comparisons between the TEA payments report and the TEAL grant system.