TEACH.ORG INC.

Assistance Listing Number(s): 84.425V Name of Federal Program or Cluster: COVID-19 Education Stabilization Fund (ESF), American Rescue Plan – Emergency Assistance to Non-Public Schools (ARP EANS) Name of Federal Agency: Department of Education Federal Award Identification Number: S425V210042 Federal Award Date: September 24, 2021 Name of Pass-through Entity: State of North Carolina Pass-through Entity Identifying Number: 60-05 Award Period: July 1, 2022 through September 30, 2024 Criteria: 2 CFR section 200.430(i)(1) requires charges to federal awards for salaries and wages to be based on records that accurately reflect the work performed. Condition: 4 out of 12 employees’ compensation and benefits charged to the federal award were not supported by time and effort documentation. Cause: A written policy and procedures over documenting time and effort was not designed and implemented. Effect or Potential Effect: Unsupported compensation and benefits charged to the program may be disallowed. Repeat Finding: 2024-002 Recommendation: Time and effort documentation be documented per Uniform Guidance requirements and used to review and support compensation and benefit costs charged to the award to be accurate, allowable, and properly allocated. Written policies and procedures should be designed and implemented for documentation of time and effort. Views of Responsible Officials: The organization agrees with the finding.

Auditor’s Recommendation: Time and effort documentation be documented per Uniform Guidance requirements and used to review and support compensation and benefit costs charged to the award to be accurate, allowable, and properly allocated. Written policies and procedures should be designed and implemented for documentation of time and effort. Corrective Action: TEACH.org will write a policy regarding documenting required procedures to track employee time & effort charged to Federal grants. Each employee who charges time to a Federal grant will receive a copy of this policy annually. The policy will indicate that employees must provide signed time & effort tracking statements at least quarterly while they are charging time to Federal grants. Each statement will be signed by the employee, their supervisor, and the program director. These statements will be used to properly document time & effort charged to Federal grants and prepare invoices or claims for all Federal grants. Each invoice or claim will be compared to time & effort tracking and tied out to the amounts charged to the Federal grant. Responsible for Corrective Action: TEACH.org internal and external accounting staff will write the time & effort procedures with oversight from a TEACH Co-Executive Director. Once the procedures are approved, TEACH internal and external accounting staff will be responsible for identifying employees working on Federal grants and must supply them with a copy of the policy at least annually. Quarterly time & effort documentation forms will be prepared by internal and external accounting staff, and sent to employees, supervisors and program directors. TEACH internal and external accounting staff will be responsible for collecting and retaining all required time & effort documentation. TEACH program directors will be responsible for reviewing all completed time & effort documentation and reconciling time tracked to invoices or claims prepared for all Federal grants. Anticipated Completion Date: TEACH.org will write the time & effort tracking procedures, supply to all employees working on Federal grants, complete all time & effort tracking documents, and tie out to all invoices and claims. These new procedures will be finalized and implemented before the period of performance begins on any new or existing Federal grant.

2024-002

Assistance Listing Number(s): 84.425V Name of Federal Program or Cluster: COVID-19 Education Stabilization Fund (ESF), American Rescue Plan – Emergency Assistance to Non-Public Schools (ARP EANS) Name of Federal Agency: Department of Education Federal Award Identification Number: S425V210042 Federal Award Date: September 24, 2021 Name of Pass-through Entity: State of North Carolina Pass-through Entity Identifying Number: 60-05 Award Period: July 1, 2022 through September 30, 2024 Criteria: Uniform Guidance 2 CFR 200.303(a) requires the non-federal entity to 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. Condition: No documentation of internal control that supported reasonable assurance of compliance with allowable activities and cost principles requirements. Cause: A written policy and procedures over documenting internal control(s) over allowable activities and cost principles was not designed and implemented. Effect or Potential Effect: Costs charged to the federal award are more likely to be for unallowable activities and not comply with allowable cost principles. These costs may be disallowed. Context: Salesforce is used to document disbursements but was not set up to document internal control procedures. Repeat Finding: 2024-003 Recommendation: All disbursements charged to the federal award should have documentation to support internal controls performed for allowable activities and cost principles. Written policies and procedures should be designed and implemented for documentation of internal controls performed for allowable activities and cost principles. Views of Responsible Officials: The organization agrees with the finding.

Auditor’s Recommendation: All disbursements charged to the federal award should have documentation to support internal controls performed for allowable activities and cost principles. Written policies and procedures should be designed and implemented for documentation of internal controls performed for allocable activities and cost principles. Corrective Action: TEACH.org will write a policy to address internal controls for allowable activities and cost principles. TEACH staff will obtain training on allowable activities and cost principles related to Federal awards. After training, TEACH staff will review all documentation of internal controls and allowability and make changes to our policies as needed to properly document our internal controls. Responsible for Corrective Action: TEACH.org Deputy Chief of Staff will review documentation on Federal grant allowable activities and cost principles. Once the review is completed, DCoS will review all fiscal policies and add or edit our policies as needed to address proper documentation of internal controls performed for allowable activities and cost principles. Anticipated Completion Date: TEACH.org DCoS has concluded review of available documentation on September 30, 2025 and concluded their review of TEACH fiscal policies on December 31, 2025.

2024-003

Assistance Listing Number(s): 84.425V Name of Federal Program or Cluster: COVID-19 Education Stabilization Fund (ESF), American Rescue Plan – Emergency Assistance to Non-Public Schools (ARP EANS) Name of Federal Agency: Department of Education Federal Award Identification Number: S425V210042 Federal Award Date: February 26, 2021 and September 24, 2021 Name of Pass-through Entity: State of North Carolina Pass-through Entity Identifying Number: 60-04 and 60-05 Award Period: July 1, 2022 through September 30, 2023 and July 1, 2022 through September 30, 2024 Criteria: Uniform Guidance 2 CFR 200.430 requires charges to federal awards for compensation must be based on records that accurately reflect the work performed. Condition: 2 out of a total of 11 employees’ compensation and benefits charged to the federal award for the fiscal year were not supported by time and effort documentation. 13 out of the total 43 quarterly compensation and benefits charged were greater than the amount supported by the time and effort documentation. A total of $278,803 of personnel and fringe were charged to the federal award. Cause: Budgeted amounts were used, but no system of review and adjustments to actual were performed. A written policy and procedures over documenting time and effort was not designed and implemented. Effect or Potential Effect: Unsupported compensation and benefits charged to the program may be disallowed. Questioned Costs: $21,249 for the compensation costs and related employee benefits charged for the 2 employees that were not supported by time and effort documentation. $20,472 for the 13 quarterly compensation and related benefits that were greater than the time and effort documentation supported. Context: For the audit all employees whose compensation and benefits were charged to the federal award retroactively provided signed quarterly time and effort documentation. These documentations were reviewed and approved by their supervisors. Auditor viewed all 11 employees quarterly time and effort documentation. While there were 13 quarterly compensation and benefits charges that were greater than the amount supported, there were 14 quarterly compensation and benefits that were undercharged by $35,871. Repeat Finding: No Recommendation: Time and effort documentation be documented per Uniform Guidance requirements and used to review and adjust budgeted compensation and benefit costs charged to the award to be accurate, allowable, and properly allocated. Written policies and procedures should be designed and implemented for documentation of time and effort. Views of Responsible Officials: The organization agrees with the finding.

Auditor’s Recommendation: Time and effort documentation be documented per Uniform Guidance requirements and used to review and adjust budgeted compensation and benefit costs charged to the award to be accurate, allowable, and properly allocated. Written policies and procedures should be designed and implemented for documentation of time and effort. Corrective Action: TEACH.org will write a policy regarding documenting required procedures to track employee time & effort charged to Federal grants. Each employee who charges time to a Federal grant will receive a copy of this policy annually. The policy will indicate that employees must provide signed time & effort tracking statements at least quarterly while they are charging time to Federal grants. Each statement will be signed by the employee, their supervisor, and the program director. These statements will be used to properly document time & effort charged to Federal grants and prepare invoices or claims for all Federal grants. Each invoice or claim will be compared to time & effort tracking and tied out to the amounts charged to the Federal grant. Responsible for Corrective Action: TEACH.org internal and external accounting staff will write the time & effort procedures with oversight from a TEACH Co-Executive Director. Once the procedures are approved, TEACH internal and external accounting staff will be responsible for identifying employees working on Federal grants and must supply them with a copy of the policy at least annually. Quarterly time & effort documentation forms will be prepared by internal and external accounting staff, and sent to employees, supervisors and program directors. TEACH internal and external accounting staff will be responsible for collecting and retaining all required time & effort documentation. TEACH program directors will be responsible for reviewing all completed time & effort documentation and reconciling time tracked to invoices or claims prepared for all Federal grants. Anticipated Completion Date: TEACH.org will write the time & effort tracking procedures, supply to all employees working on Federal grants, complete all time & effort tracking documents, and tie out to all invoices and claims retroactively to July 1, 2024. This work will be concluded by June 30, 2025, and starting July 1, 2025 the new procedures will be implemented for all Federal grants.

Assistance Listing Number(s): 84.425V Name of Federal Program or Cluster: COVID-19 Education Stabilization Fund (ESF), American Rescue Plan – Emergency Assistance to Non-Public Schools (ARP EANS) Name of Federal Agency: Department of Education Federal Award Identification Number: S425V210042 Federal Award Date: February 26, 2021 and September 24, 2021 Name of Pass-through Entity: State of North Carolina Pass-through Entity Identifying Number: 60-04 and 60-05 Award Period: July 1, 2022 through September 30, 2023 and July 1, 2022 through September 30, 2024 Criteria: Uniform Guidance 2 CFR 200.303(a) requires the non-federal entity to 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. Condition: 54 of 60 disbursements sampled did not have documented internal control that supported reasonable assurance of compliance with allowable activities and cost principles requirements. Cause: A written policy and procedures over documenting internal control(s) over allowable activities and cost principles was not designed and implemented. Effect or Potential Effect: Costs charged to the federal award are more likely to be for unallowable activities and not comply with allowable cost principles. These costs may be disallowed. Context: Salesforce is used to document disbursements, but was not set up to document internal control procedures. Repeat Finding: No Recommendation: All disbursements charged to the federal award should have documentation to support internal controls performed for allowable activities and cost principles. Written policies and procedures should be designed and implemented for documentation of internal controls performed for allowable activities and cost principles. Views of Responsible Officials: The organization agrees with the finding.

Auditor’s Recommendation: All disbursements charged to the federal award should have documentation to support internal controls performed for allowable activities and cost principles. Written policies and procedures should be designed and implemented for documentation of internal controls performed for allowable activities and cost principles. Corrective Action: TEACH.org will write a policy to address internal controls for allowable activities and cost principles. TEACH staff will obtain training on allowable activities and cost principles related to Federal awards. After training, TEACH staff will review all documentation of internal controls and allowability and make changes to our policies as needed to properly document our internal controls. Responsible for Corrective Action: TEACH.org Deputy Chief of Staff will review documentation on Federal grant allowable activities and cost principles. Once the review is completed, DCoS will review all fiscal policies and add or edit our policies as needed to address proper documentation of internal controls performed for allowable activities and cost principles. Anticipated Completion Date: TEACH.org DCoS will conclude review of available documentation by September 30, 2025 and conclude their review of TEACH fiscal policies by December 31, 2025.