Board of Education of Baltimore County

Federal Agency: U.S. Department of Education Federal Program Name: Special Education (IDEA) Cluster Assistance Listing Numbers: 84.027, 84.173 Federal Award Identification Number and Year: Z83MQKEJGYF7-2025 Pass-Through Agency: Maryland State Department of Education (MSDE) Pass-Through Number(s): 230562-01, 231193-01, 241747-01, 250751-01 Award Period: 7/1/2022–9/30/2024 Compliance Requirement: Period of Performance Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: Federal regulations require that costs charged to federal awards be allowable and consistent with the terms and conditions of the award. 2 CFR §200.403 requires that costs charged to a federal award be allowable, including being consistent with the approved period of performance established in the grant award. 2 CFR §200.344(c) requires subrecipients to liquidate all financial obligations incurred under a subaward no later than 90 calendar days after the conclusion of the period of performance of the subaward (or an earlier date as agreed upon by the pass-through entity and subrecipient). When justified, the Federal agency or pass-through entity may approve extensions for the recipient or subrecipient. Per the individual grant awards, the grantor further restricted the liquidation period to November 30, 2024. Control: Per 2 CFR §200.303(a), a 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 comply with the 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/Context: For four of forty transactions selected for testing, expenditures totaling $1,994 were charged to the grant after the period of performance end date of September 30, 2024. For three of forty transactions selected for testing, expenditures totaling $12,834 were paid after the liquidation period end date of November 30, 2024. Questioned costs: $14,828. Cause: The Board did not have sufficient internal controls in place to ensure that expenditures charged to the grant were related to services performed within the period of performance and properly liquidated within the required 60‑day liquidation period as defined by the grantor. Contributing factors included inadequate monitoring of service dates and subsequent review of the timing of payment relative to the period of performance end date and liquidation date. Effect: Expenditures were charged to the federal award that did not meet federal allowability requirements and are subject to being reported as questioned costs. Repeat Finding: No. Recommendation: We recommend the Board strengthen its policies and procedures to ensure that services are performed within the approved period of performance prior to charging costs to the program, and all expenditures are liquidated within the required time period following the end of the period of performance. Views of responsible officials: There is no disagreement with the finding.

Federal Agency: U.S. Department of Education Federal Program Name: Special Education (IDEA) Cluster Assistance Listing Numbers: 84.027, 84.173 Federal Award Identification Number and Year: Z83MQKEJGYF7-2025 Pass-Through Agency: Maryland State Department of Education (MSDE) Pass-Through Number(s): 230562-01, 231193-01, 241747-01, 250751-01 Award Period: 7/1/2022–9/30/2024 Compliance Requirement: Procurement Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §200.318 through §200.327. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR §200.320(b)). Control: Per 2 CFR §200.303(a), a 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 comply with the 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/Context: For one of nine contracts selected for testing, the Board was unable to provide documentation to demonstrate compliance with their procurement policy, specifically the requirement to obtain and retain documentation for a sole source procurement. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that the Board’s procurement policies were followed for contracts entered into where expenses were charged to the federal program. Effect: There is an increased risk of charging unallowed costs to the program. Repeat Finding: No. Recommendation: We recommend that the Board enhance controls and procedures to ensure that it follows its procurement policies for all goods and services charged to the program. Documentation should be readily available for audit. Views of responsible officials: There is no disagreement with the finding.

Federal Agency: U.S. Department of Education Federal Program Name: Special Education (IDEA) Cluster Assistance Listing Numbers: 84.027, 84.173 Federal Award Identification Number and Year: Z83MQKEJGYF7-2025 Pass-Through Agency: Maryland State Department of Education (MSDE) Pass-Through Number(s): 230562-01, 231193-01, 241747-01, 250751-01 Award Period: 7/1/2022–9/30/2024 Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: Nonfederal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR §180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR §180.215. 2 CFR §180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Control: Per 2 CFR §200.303(a), a 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 comply with the 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/Context: For one of six vendors selected for testing, the Board was unable to provide documentation that it had verified the suspension and debarment status before entering into covered transactions with the vendor. Questioned costs: There are no questioned costs related to this finding as the vendor was not federally suspended or debarred. Cause: The Board’s procedures and internal controls over suspension and debarment was not sufficient to ensure that all vendors’ suspension and debarment status was verified timely. Effect: Failure to verify the suspension and debarment status of vendors may result in the procurement of goods or services from vendors that are suspended or debarred and result in unallowable expenditures charged to the program. Repeat Finding: No. Recommendation: We recommend that the Board review its policies and procedures to ensure they include the three options for determining suspension and debarment status listed in 2 CFR 180.300 and that controls are sufficient to ensure that the suspension and debarment status is verified for all vendors prior to entering into covered transactions. Views of responsible officials: There is no disagreement with the finding.

Federal Agency: U.S. Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555, 10.559, 10.582 Federal Award Identification Number and Year: None Provided Pass-Through Agency: Maryland Department of Education (MSDE) Pass-Through Number(s): None Provided Award Period: 7/1/2023–6/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.327. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). Control: Per 2 CFR section 200.303(a), a 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 comply with the 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/Context: During the testing of ten contracts, the Board was unable to provide documentation for one contract to demonstrate compliance with their procurement policy, specifically the requirement to obtain two quotes for a small purchase. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that the Board’s procurement policies were followed for contracts entered into where expenses were charged to the federal program. Effect: There is an increased risk of charging unallowed costs to the program. Repeat Finding: No. Recommendation: We recommend that the Board enhance controls and procedures to ensure that it follows its procurement policies for all goods and services charged to the program. Documentation should be readily available for audit. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Education Federal Program Name: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010 Federal Award Identification Numbers and Year: S010A230020 and S010A220020 Pass-Through Agency: Maryland Department of Education (MSDE) Pass-Through Number(s): 241282-01 231095-01 Award Period: 7/1/2022–9/30/2024 7/1/2023–9/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR Section 200.430 (8)(i) Standards for Documentation of Personnel Expenses states that: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a 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 comply with the 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/Context: For one of forty timesheets selected for testing, the Board was unable to provide documentation to substantiate that the time and effort was dedicated to the federal program. The Board did not have effective controls in place for monitoring and obtaining adequate support to validate actual payroll expenses charged to the federal program. Questioned costs: $3,415 Cause: Controls were not operating effectively to ensure that time and effort reporting was performed and documented in a timely manner, in accordance with federal requirements. Effect: There is an increased risk of charging unallowed payroll costs to the program. Repeat Finding: No. Recommendation: We recommend that the Board reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Board should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Documentation should be readily available for audit. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Education Federal Program Name: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010 Federal Award Identification Number and Year: S010A210020 S010A220020 S010A230020 S010A220020 S010A210020 S010A220020 S010A230020 Pass-Through Agency: Maryland Department of Education (MSDE) Pass-Through Number(s): 221499-01 231095-01 241282-01 231255-01 232028-01 231992-01 241671-01 Award Period: 7/1/2021–9/30/2023 7/1/2022–9/30/2024 7/1/2023–9/30/2024 7/1/2022–9/30/2024 3/1/2023–9/30/2023 3/1/2023–9/30/2024 7/1/2023–9/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: Per ESEA sections 1111(h)(1)(C)(iii)(II) and 8101(23), (25) (20 USC 6311(h)(1)(C)(iii)(II) and 7801(23), (25))), in order to remove a student from the cohort, a school or LEA must confirm, in writing, that the student transferred out, emigrated to another country, transferred to a prison or juvenile facility, or is deceased. To confirm that a student transferred out, the school or LEA must have official written documentation that the student enrolled in another school or in an educational program that culminates in the award of a regular high school diploma. A student who is retained in grade, enrolls in a GED program, or leaves school for any other reason may not be counted as having transferred out for the purpose of calculating graduation rate and must remain in the adjusted cohort. Control: Per 2 CFR section 200.303(a), a 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 comply with the 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/Context: For six out of eighteen samples tested, the Board did not maintain documentation to support the students’ withdrawal and/or evidence of the school’s review and approval of the student’s withdrawal that was reported to Maryland State Department of Education (MSDE). MSDE requires the Board to provide data for students that no longer attend a school in the district. The data is used to determine if the Board's graduation rate is affected because of the student’s departure. Questioned costs: Undeterminable. Cause: The Board did not retain documentation supporting student withdrawal codes as required by the grant. Effect: The Board's graduation rate may be improperly calculated if the data provided to the State is inaccurate. Repeat Finding: Yes, refer to prior year finding 2023-004. Recommendation: We recommend that the Board continue with established policies and procedures implemented in October 2023 to ensure that it obtains documentation to support student withdrawals and that this documentation is available for audit purposes. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Education Federal Program Name: Title III English Language Acquisition State Grant Assistance Listing Number: 84.365 Federal Award Identification Number and Year: S365A220020 Pass-Through Agency: Maryland Department of Education (MSDE) Pass-Through Number(s): 241230-02 Award Period: 7/1/2022–9/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR Section 200.430 (8)(i) Standards for Documentation of Personnel Expenses states that: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (vi) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (vii) Be incorporated into the official records of the non-Federal entity; (viii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (ix) Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (x) Comply with the established accounting policies and practices of the non-Federal entity; (viii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a 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 comply with the 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/Context: For three of forty timesheets selected for testing, the Board was unable to provide documentation to substantiate that the time and effort was dedicated to the federal program. The Board did not have effective controls in place for monitoring and obtaining adequate support to validate actual payroll expenses charged to the federal program. Questioned costs: $15,233 Cause: Controls were not operating effectively to ensure that time and effort reporting was performed and documented in a timely manner, in accordance with federal requirements. Effect: There is an increased risk of charging unallowed payroll costs to the program. Repeat Finding: No. Recommendation: We recommend that the Board reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Board should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Documentation should be readily available for audit. Views of responsible officials: There is no disagreement with the audit finding.

Finding Number: 2023-002 Prior Year Finding: No Federal Agency: U.S. Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing: 84.425 C,D,U,W Pass-Through Entity: Maryland State Department of Education Pass-Through Award Number and Period: 201873-01 (3/13/20 – 9/30/22) 221869-01 (6/1/22 – 9/30/24) 201787-01 (3/13/20 – 9/30/22) 211956-01 (3/24/21 – 9/30/23) 202233-01 (3/13/20 – 9/30/22) 221568-01 (7/1/21 – 9/30/22) 221422-01 (7/1/21 – 9/30/23) 221894-01 (7/1/21 – 9/30/23) Compliance Requirement: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement Control: Per 2 CFR section 200.303(a), a 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 comply with the 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/Context For 2 out of 60 samples, the Board did not retain documentation supporting proper approval of the costs charged to the grant. Questioned Costs None noted. Cause The Board did not establish and maintain effective internal control over the Federal award in accordance with the COSO framework noted above for 2 out of 60 samples. Effect Failure to perform timely approvals of grant expenditures may result in the Board charging expenditures to the grant that are unallowable. Recommendation We recommend that the Board enhance its procedures and internal controls to ensure that it retains documentation of expenditure approvals and that this documentation is available for audit purposes. Views of Responsible Officials Management agrees with the finding.

Finding Number: 2023-003 Prior Year Finding: No Federal Agency: U.S. Department of Education Federal Program: Title I, Part A Assistance Listing: 84.010 Pass-Through Entity: Maryland State Department of Education Pass-Through Award Number and Period: 201310-01 (7/1/19 – 9/30/21) 231095-01 (7/1/22 – 9/30/24) 211116-01 (7/1/20 – 9/30/22) 211303-01 (7/1/20 – 9/30/22) 221499-01 (7/1/21 – 9/30/23) 221769-01 (7/1/21 – 9/30/22) Compliance Requirement: Special Test Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement Compliance: Per section 1115(c) of the ESEA (20 USC 6315(c)), an LEA, after timely and meaningful consultation with private school officials, must provide equitable services to eligible private school children, their teachers, and their families. Eligible private school children are those who reside in a participating public school attendance area and have educational needs. Control: Per 2 CFR section 200.303(a), a 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 comply with the 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/Context The Board is required to verify the eligibility of private school children prior to providing equitable services under the grant. Eligible private school children are those who reside in a participating public school attendance area and have educational needs. We noted 1 out of 8 students tested where the student was ineligible to receive services per the limitations noted above. Questioned Costs Undeterminable. Cause The student participation process does not include matching the student’s address and current grade level to a Title I attendance area for eligibility determination. Effect Students could be included in the equitable services calculations that should be excluded based on their school attendance zone. Recommendation We recommend that the Board revises the Student Participation process to include a step that includes matching the student grade level to the corresponding school type and a step to include a second review of the Title I School eligibility address and school type by a second staff member. Views of Responsible Officials Management agrees with the finding.

Finding Number: 2023-004 Prior Year Finding: No Federal Agency: U.S. Department of Education Federal Program: Title I, Part A Assistance Listing: 84.010 Pass-Through Entity: Maryland State Department of Education Pass-Through Award Number and Period: 201310-01 (7/1/19 – 9/30/21) 231095-01 (7/1/22 – 9/30/24) 211116-01 (7/1/20 – 9/30/22) 211303-01 (7/1/20 – 9/30/22) 221499-01 (7/1/21 – 9/30/23) 221769-01 (7/1/21 – 9/30/22) Compliance Requirement: Special Test Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or Specific Requirement Compliance: Per ESEA sections 1111(h)(1)(C)(iii)(II) and 8101(23), (25) (20 USC 6311(h)(1)(C)(iii)(II) and 7801(23), (25))), in order to remove a student from the cohort, a school or LEA must confirm, in writing, that the student transferred out, emigrated to another country, transferred to a prison or juvenile facility, or is deceased. To confirm that a student transferred out, the school or LEA must have official written documentation that the student enrolled in another school or in an educational program that culminates in the award of a regular high school diploma. A student who is retained in grade, enrolls in a GED program, or leaves school for any other reason may not be counted as having transferred out for the purpose of calculating graduation rate and must remain in the adjusted cohort. Control: Per 2 CFR section 200.303(a), a 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 comply with the 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/Context For 26 out of 40 samples tested, the Board did not maintain documentation to support the students’ withdrawal and/or evidence of the school’s review and approval of the student’s withdrawal that was reported to Maryland State Department of Education (MSDE). MSDE requires the Board to provide data for students that no longer attend a school in the district. The data is used to determine if the Board's graduation rate is affected because of the student’s departure. Questioned Costs Undeterminable. Cause The Board did not retain documentation supporting student withdrawal codes as required by the grant. Effect The Board's graduation rate may be improperly calculated if the data provided to the State is inaccurate. Recommendation We recommend that the Board enhance its procedures and internal controls to ensure that it retains documentation to support student withdrawals and that this documentation is available for audit purposes. Views of Responsible Officials Management agrees with the finding.

Finding Number: 2022-001Prior Year Finding: 2021-005Federal Agency: U.S. Department of the TreasuryU.S. Department of EducationFederal Program: COVID-19 -Coronavirus State and Local Fiscal Recovery FundsCOVID-19 - Education Stabilization FundSupporting Effective Instruction State Grants (formerlyImproving Teacher Quality State Grants)Assistance Listing: 21.027, 84.425C,D,U,W, 84.367Pass-Through Entity: Maryland State Department of EducationPass-Through AwardNumber and Period:211838-01 (3/3/21 ? 12/31/24) 211815-01 (3/3/21 ? 12/31/24)211875-01 (3/3/21 ? 12/31/24) 201873-01 (3/13/20 ? 9/30/22)201787-01 (3/13/20 ? 9/30/22) 202233-01 (3/13/20 ? 9/30/22)191360-01 (7/1/18 ? 9/30/21) 201067-01 (7/1/19 ? 9/30/21)210781-01 (7/1/20 ? 6/30/22) 221052-01 (7/1/21 ? 6/30/23)Compliance Requirement: ReportingType of Finding Significant Deficiency in Internal Control over Compliance, OtherMattersCriteria or Specific Requirement:Compliance: Per 2 CFR section 200.302(b), financial management systems of non-Federal entitiesmust provide for accurate, current, and complete disclosure of the financial results of each Federalaward or program in accordance with program reporting requirements and provide records that identifyadequately the source and application of funds for federally funded activities. Per Part L of the OMBCompliance Supplement, financial reports must include all activity of the reporting period, be supportedby applicable accounting or performance records, and be fairly presented in accordance with governingrequirements.Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effectiveinternal control over the Federal award that provides reasonable assurance that the non-federal entityis managing the federal award in compliance with federal statutes, regulations, and the terms andconditions of the federal award. These internal controls should comply with the guidance in "Standardsfor Internal Control in the Federal Government" issued by the Comptroller General of the United Statesor the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizationsof the Treadway Commission (COSO). Condition/Context:The Board is required to submit monthly Financial Status Reports (FSR) to the Maryland StateDepartment of Education (MSDE). MSDE utilizes these reports as reimbursement requests andsubsequently submits payment to the board based on reported expenditures. The Final September2021 FSR and its related supporting documentation/reconciliations were not retained. Specifically, wenoted the following:? Education Stabilization Fund: 3 out of 23 grants; 1 out of 5 months? Coronavirus State and Local Fiscal Recovery Fund: 3 out of 16 grants; 1 out of 5 months? Supporting Effective Instruction State Grants: 4 out of 11 grants; 1 out of 3 monthsQuestioned Costs:Undetermined, due to lack of documentation.Cause:The Final September 2021 FSR Reimbursement Request and supporting documentation used toprepare it was not retained.Effect:The lack of reconciliations performed on the differences between the monthly FSR & GL Detail couldresult in inaccurate amounts reported and received for the Federal programs. In addition, the Board didnot have supporting documentation to show controls were in place over expenditure reporting andreimbursement requests.Recommendation:We recommend that the Board review its policies and procedures to ensure that ReimbursementRequests and the detail & accompanying reconciliations used to prepare it are retained for auditpurposes.Views of responsible officials:Management agrees with the finding.

Finding Number: 2022-002Prior Year Finding: NoFederal Agency: U.S. Department of EducationFederal Program: Special Education ClusterAssistance Listing: 84.027, 84.173Pass-Through Entity: Maryland State Department of EducationPass-Through AwardNumber and Period:211021-03 (10/1/20 ? 9/30/22)220391-02 (7/1/21 ? 9/30/23)221324-01 (7/1/21 ? 9/30/23)Compliance Requirement: ProcurementType of Finding Significant Deficiency in Internal Control over Compliance,Other MattersCriteria or Specific Requirement:Compliance: Per 2 CFR section 200.318, a non-Federal entity must have and use documentedprocurement procedures, consistent with State, local, and tribal laws and regulations and the standardsof this section, for the acquisition of property or services required under a Federal award or subaward.Per 2 CFR section 200.319, all procurement transactions for the acquisition of property or servicesrequired under a Federal award must be conducted in a manner providing full and open competitionconsistent with the standards of this section and ? 200.320.Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effectiveinternal control over the Federal award that provides reasonable assurance that the non-federal entityis managing the federal award in compliance with federal statutes, regulations, and the terms andconditions of the federal award. These internal controls should comply with the guidance in "Standardsfor Internal Control in the Federal Government" issued by the Comptroller General of the United Statesor the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizationsof the Treadway Commission (COSO).Condition/Context:Per its approved Procurement Policy, the Board is required to obtain 2 quotes for purchases between$15,000 and $50,000. We noted 4 out of 8 samples where only 1 quote was obtained for purchaseswithin the thresholds noted above.Questioned Costs:None noted.Cause:The Board did not retain documentation as to why the Procurement Policy was not followed.Effect: The Board could be circumventing the Procurement Policy.Recommendation:We recommend that the Board ensures that documentation of Procurement's decisions on anypurchases that are excluded from the requirements noted in the Procurement Policy are retained foraudit purposes.Views of responsible officials:Management agrees with the finding.

Finding Number: 2022-003Prior Year Finding: NoFederal Agency: U.S. Department of EducationFederal Program: Special Education ClusterAssistance Listing: 84.027, 84.173Pass-Through Entity: Maryland State Department of EducationPass-Through AwardNumber and Period:211021-03 (10/1/20 ? 9/30/22)Compliance Requirement: Suspension and DebarmentType of Finding Significant Deficiency in Internal Control over ComplianceCriteria or Specific Requirement:Control ? Per 2 CFR section 200.303(a), a non-federal entity must: Establish and maintain effectiveinternal control over the federal award that provides reasonable assurance that the non-federal entity ismanaging the federal award in compliance with federal statutes, regulations, and the terms andconditions of the federal award. These internal controls should comply with the guidance in "Standardsfor Internal Control in the Federal Government" issued by the Comptroller General of the United Statesor the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizationsof the Treadway Commission (COSO).Condition/Context:When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adoptingregulations, is not suspended or debarred or otherwise excluded from participating in the transaction.For 2 out of 5 samples, the Board did not maintain documentation supporting when it had checked theentities? suspension and debarment status.Questioned Costs:None noted.Cause:The Board did not retain documentation showing the date it performed the suspension/debarmentcheck.Effect:Failure to adhere to suspension and debarment requirements may result in the Board entering into acontract or purchase with a vendor that is suspended or debarred and not authorized to provide goodsand services to the program.Recommendation:We recommend that the Board enhance its procedures and internal controls to ensure that it retainsdocumentation of procurement suspension/debarment status verifications for its vendors and that thisdocumentation is available for audit purposes.Views of responsible officials:Management agrees with the finding.

Finding Number: 2022-004Prior Year Finding: NoFederal Agency: U.S. Department of EducationFederal Program: COVID-19 - Elementary and Secondary Schools EmergencyRelief Fund (ESSER)Assistance Listing: 84.425C, D, U, WPass-Through Entity: Maryland State Department of EducationPass-Through AwardNumber and Period:201787-01 (3/13/20 ? 9/30/22)Compliance Requirement: Allowable Costs/Cost PrinciplesType of Finding Significant Deficiency in Internal Control over Compliance,Other MattersCriteria or specific requirement:Compliance: Per 2 CFR section 403, except where otherwise authorized by statute, costs must meetthe following general criteria in order to be allowable under Federal awards:(a) Be necessary and reasonable for the performance of the Federal award and be allocablethereto under these principles.(b) Conform to any limitations or exclusions set forth in these principles or in the Federal award asto types or amount of cost items.(c) Be consistent with policies and procedures that apply uniformly to both federally-financed andother activities of the non-Federal entity.(d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a directcost if any other cost incurred for the same purpose in like circumstances has been allocated tothe Federal award as an indirect cost.(e) Be determined in accordance with generally accepted accounting principles (GAAP), except, forstate and local governments and Indian tribes only, as otherwise provided for in this part.(f) Not be included as a cost or used to meet cost sharing or matching requirements of any otherfederally-financed program in either the current or a prior period. See also ? 200.306(b).(g) Be adequately documented. See also ?? 200.300 through 200.309 of this part.(h) Cost must be incurred during the approved budget period. The Federal awarding agency isauthorized, at its discretion, to waive prior written approvals to carry forward unobligatedbalances to subsequent budget periods pursuant to ? 200.308(e)(3). Frequently Asked Question C-16 for Elementary and Secondary School Emergency Relief Programs(ESSER), dated May 2021, states in part, that when an LEA has other means of providing for foodservices, such as through the U.S. Department of Agriculture (USDA) or other Federal programs, theDepartment encourages LEAs to use those Federal funds with the specific purpose of providing foodservices to students prior to using ESSER or GEER funds for this purpose.Control ? Per 2 CFR section 200.303(a), a non-federal entity must: Establish and maintain effectiveinternal control over the federal award that provides reasonable assurance that the non-federal entity ismanaging the federal award in compliance with federal statutes, regulations, and the terms andconditions of the federal award. These internal controls should comply with the guidance in "Standardsfor Internal Control in the Federal Government" issued by the Comptroller General of the United Statesor the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizationsof the Treadway Commission (COSO).Condition/Context:The Board charged $3,059,646 to the food service fund to cover salary costs. ESSER programrequirements allow salary costs to be charged to the program only if other Federal funds are notavailable to cover additional labor costs associated with serving meals to students during the pandemicor for other COVID-19 related expenses. The reimbursement rate under the Child Nutrition Cluster(CNC) was sufficient to cover the total costs of operating the food service program for the fiscal year.Since Federal program funds were available to cover these costs under the CNC, the portion chargedto ESSER is unallowable.Questioned Costs:$3,059,646Cause:The Board's internal control processes did not prevent salary costs from being charged to both CNCand ESSER.Effect:The Board charged costs to the program when the expenditures had also been charged to CNC.Recommendation:We recommend that the Board review its policies and procedures to verify that controls are in place toensure expenditures are not reimbursed under more than one Federal Program.Views of responsible officials:Management agrees with the finding.

Finding Number: 2021-005 Prior Year Finding: No Federal Agency: U.S. Department of Treasury U.S. Department of Education Federal Program: Coronavirus Relief Fund Education Stabilization Fund Assistance Listing: 21.019, 84.425C and D Pass-Through Entity: Maryland State Department of Education Pass-Through Award Number and Period: 201939-01 (3/1/2020 ? 12/30/2020), 201957-01 (3/1/2020 ? 12/30/2020) 201787-01 (3/13/2020 ? 9/30/2022), 201873-01 (3/13/2020 ? 9/30/2022) Compliance Requirement: Cash Management (Assistance Listing 84.425C and D) Reporting (Assistance Listings 21.019 and 84.425C and D) Type of Finding Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or Specific Requirement: Compliance ? Cash Management: Per 2 CFR section 200.305(b)(3), non-federal entities must maintain supporting documentation to ascertain that the entity paid for the costs for which reimbursement was requested prior to the date of the reimbursement request. ? Reporting: Per 2 CFR section 200.302(b), financial management systems of non-Federal entities must provide for accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with program reporting requirements and provide records that identify adequately the source and application of funds for federally funded activities. Per Part L of the OMB Compliance Supplement, financial reports must include all activity of the reporting period, be supported by applicable accounting or performance records, and be fairly presented in accordance with governing requirements. Control Per 2 CFR section 200.303(a), a 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 comply with the 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/Context: The Board is required to submit monthly Financial Status Reports (FSR) to the Maryland State Department of Education (MSDE). MSDE utilizes these reports as reimbursement requests and subsequently submits payment to the Board based on reported expenditures. Variances between supporting documentation provided and amounts reported to MSDE were noted in nine out of ten monthly reports selected for testing. Questioned Costs: Undetermined, due to lack of documentation. Cause: The Board was the victim of a ransomware attack in November 2020. Due to the attack, financial data was not recoverable and detailed expenditures used for cash reimbursement requests and for program expenditure reporting were not available. As a result, the Board used estimates for reimbursement requests and financial expenditure reports. Effect: The use of estimates for reimbursement of expenditures could result in inaccurate amounts reported and received for the Federal programs. Recommendation: We recommend that the Board review its policies and procedures to ensure that expenditures reported and reimbursed are supported with data that accurately reflects amounts charged to the Federal programs. Views of responsible officials: BCPS was the victim of a cyberattack in November 2020. This cyberattack had a catastrophic impact on all BCPS systems, including the financial and HR systems. Our ability to access data and run reports was severely compromised. During part of the timeframe tested in the FY21 single audit, when we were attempting to recover data and recreate various frequently-used reports, we submitted FSRs to MSDE that utilized an estimate of monthly grant expenditures. This estimate was based upon ongoing expenditures that had been substantiated and included in previously submitted FSRs. While we agree that supporting documentation was not available for certain FSRs, ultimately the amount requested for reimbursement did not exceed the amount awarded/available. BCPS has procedures in place to ensure the accurate reporting and reimbursement of Federal grant expenditures; however, we were unable to fully implement the procedures due to the cyberattack ? an event out of our control.

Finding Number: 2021-006 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: Coronavirus Relief Fund Assistance Listing: 21.019 Pass-Through Entity: Maryland State Department of Education Pass-Through Award Number and Period: 201939-01 (3/1/2020 ? 12/30/2020), 201957-01 (3/1/2020 ? 12/30/2020) Compliance Requirement: Allowable Costs / Cost Principles Type of Finding Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Compliance ? Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; be incorporated into the official records of the non-Federal entity, not exceeding 100% of compensated activities; encompass both federally assisted and all other activities compensated by the non- Federal entity on an integrated basis; comply with the established accounting policies and practices of the non-Federal entity; and support the distribution of the employee?s salary or wages among specific activities or cost objects. Control ? Per 2 CFR section 200.303(a), a 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 comply with the 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/Context: $1,451,436 was charged to the program via a journal entry for payroll expenditures. Support for the underlying payroll expenditures only totaled $1,299,633, leaving an unsupported variance of $151,803. Salaries and wages for an ineligible employee were charged to the program. One of sixty timesheets selected for testing was for an employee whose position was ineligible to be charged to the program. Questioned Costs: Journal Entry: Undetermined, due to lack of documentation after the cyberattack. Ineligible employee charged to the program: $72 Cause: The Board was the victim of a ransomware attack in November 2020. Due to the attack, financial data, including the payroll system, was lost and only a portion of it was recovered. Controls were not sufficient to prevent or detect that an ineligible employee?s costs were charged to the program. Effect: Expenditures for personnel services charged to the program were not supported and included costs for an ineligible employee. Recommendation: We recommend that the Board review its policies and procedures to ensure that expenditures reported are supported with data that accurately reflects amounts charged to the program and that all salaries and wages are for eligible employees. Views of responsible officials: BCPS acknowledges that $71.50 was charged in error to the CRF grant. This was another direct result of the November 2020 cyberattack, as payroll could not be verified because there was no access to financial system data/reports. Processes are in place to verify payroll charges that hit Federal grants; however, we were unable to fully implement these processes during part of the timeframe tested in the FY21 single audit due to the cyberattack ? an event out of our control. Reports have subsequently been reconstructed and are available and being used to verify payroll.

Finding Number: 2021-007 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: Coronavirus Relief Fund Assistance Listing: 21.019 Pass-Through Entity: Maryland State Department of Education Pass-Through Award Number and Period: 201939-01 (3/1/2020 ? 12/30/2020), 201957-01 (3/1/2020 ? 12/30/2020) Compliance Requirement: Period of Performance Type of Finding Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Control ? Per 2 CFR section 200.303(a), a 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 comply with the 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/Context: The period of performance of awards received from the Maryland State Department of Education expired on December 30, 2020. The Board continued to expend funds against the awards without preapproved extensions from the awarding agency. Questioned Costs: None Cause: Controls failed to detect that the award periods had ended and that an extension must be approved prior to expending funds after the allowable December 30, 2020 date. Effect: Costs could be deemed unallowable by the awarding agency if funds are expended outside of the allowable period of performance. Recommendation: We recommend that the Board review its policies and procedures to ensure that funds are expended within the award?s period of performance and, when necessary, an extension is requested and approved prior to expending funds after the award?s end date. Views of responsible officials: On December 27, 2020, the Federal government extended the period of availability of the CRF grant to December 31, 2021. The charges in question were made during initial period of availability. They were subsequently transferred off CRF grant but then were transferred back on pursuant to November 2, 2021 directive from MSDE/Donna Gunning stating ?If the school system has valid expenditures to claim, the October FSR (early November 2021) is the last time to submit claims for these funds. Please let me know if you will be submitting claims for these grant funds.? We maintain that this amounts to de facto approval to expend CRF grant funds until the Federally-revised end date of December 31, 2021. However, we acknowledge that we did not formally amend the Notice of Grant Award.

2020 ? 001 Federal agency: U.S. Department of Education Federal program title: Title I CFDA Number: 84.010 Pass-Through Entity: Maryland State Department of Education Pass-Through Entity Identifying Numbers: 180716-01, 190956-01, 201310-01, 181357-01, 191304-01 Compliance Requirement: Reporting Award Period: July 1, 2019 ? June 30, 2020 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Board is required to submit a Finance Status Report (FSR) at the end of each month to MSDE. Condition/Context: The Board was unable to provide support to show the FSR submission was completed for two out of the three months selected for testing. Questioned Costs: Undetermined. Cause: The Board did not maintain the documentation to support the FSR submissions. Effect: The Board cannot validate the FSR submissions were completed accurately. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Board implement policies and procedures to ensure approved and submitted FSR reports and supporting documentation is maintained.

2020 ? 002 Federal agency: U.S. Department of Treasury Federal program title: Coronavirus Relief Fund CFDA Number: 21.019 Pass-Through Entity: Maryland State Department of Education Pass-Through Entity Identifying Number: 201939-01 Compliance Requirement: Activities Allowed or Unallowed and Period of Performance Award Period: March 1, 2020 ? December 31, 2021 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: The Fund is designed to provide ready funding to address unforeseen financial needs and risks created by the COVID-19 public health emergency. Governments may use Fund payments for eligible expenses subject to the restrictions set forth in section 601(d) of the Social Security Act. Payments must be used to cover costs that are: 1. Necessary expenditures incurred due to the public health emergency with respect to COVID?19; 2. Not accounted for in the governments? most recently approved as of March 27, 2020; and 3. Incurred (performance or delivery must occur) during the period that begins on March 1, 2020 and ends on December 31, 2021. A cost meets the requirement of ?costs not accounted for in the budget most recently approved as of March 27, 2020? if either (a) the cost cannot lawfully be funded using a line item, allotment, or allocation within that budget or (b) the cost is for a substantially different use from any expected use of funds in such a line item, allotment, or allocation. Governments must use the direct payments for necessary expenditures incurred between March 1, 2020 and December 31, 2021, due to the COVID-19 public health emergency. Condition/Context: The Board incorrectly charged unallowable expenditures to the grant. Expenditures totaling $202,239 were associated with computers and tablets purchased and received prior to March 1, 2020, the beginning of the grant period. Questioned Costs: $202,239 Cause: The Board recorded expenditures related to computer and tablets that were previously purchased and in stock and were distributed to students for remote learning during the pandemic. Effect: The Board received reimbursement for expenditures that were not incurred within the period of performance. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Board establish policies and procedures to review expenditures for allowability before recording them on the schedule of expenditures of federal awards.

2020 ? 003 Federal agency: U.S. Department of Education Federal program title: Elementary and Secondary School Emergency Relief Fund (ESSER) CFDA Number: 84.425D Pass-Through Entity: Maryland State Department of Education Pass-Through Entity Identifying Number: 201787-01 Compliance Requirement: Activities Allowed or Unallowed Award Period: March 13, 2020 ? September 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR, Part 200, Section 200.430 requires that charges to federal awards for salaries and wages be based on records that adequately reflect the work performed. These records must be supported by a system of internal controls that provide reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition/Context: The Board did not have supporting documentation noting approval of hours worked for 9 out of 40 timesheets reviewed. Questioned Costs: None. Cause: The Board was the victim of a ransomware attack in November 2020. Due to this attack, the Board could not access the electronic workflows to support approval of timesheets. Effect: The Board does not have supporting documentation to show the controls were in place. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the management review their policies and procedures and make changes necessary to ensure documentation of established internal control procedures are maintained for audit documentation.

GSA_MIGRATION