Carmen High School of Science and Technology, Inc.

Reference Number: 2022-004 Program Name: 84.010A ? Title I Description: Activities Allowed and Allowable Costs Condition and Criteria: Paraprofessionals charged to Title I are required to have a secondary school diploma or its recognized equivalent. Cause: The Organization relied upon the employees? resume. Effect: The Organization could not provide evidence that the paraprofessional was qualified. Questioned Costs: $45,192. Identification of a Repeat Finding: This is not a repeat finding. Auditors? Recommendation: We recommend the Organization obtain copies of transcripts or diplomas. Views of Responsible Officials: See attachment for the Organization?s corrective action plan.

Reference Number: 2021-001 Description: Audit Adjustments: Criteria: Statements on Auditing Standards AU ?314.41 states it is the responsibility of management to implement proper internal controls to provide reasonable assurance about the achievement of the entity?s objectives with regard to the reliability of financial reporting. Condition: After fieldwork began, a significant amount of journal entries were provided to prevent the Organization?s financial statements from being materially misstated. Cause: Inadequate controls to ensure the proper recording of all of the Organization?s financial transactions in accordance with accounting principles generally accepted in the United States of America. Effect: Without the above audit adjustments, the financial statements of the Organization would have been materially misstated for the following reasons: - Federal claims submitted for reimbursement did not agree to the records of the Organization resulting in significant reclassification of expenses in order to reconcile grant activity - The Schedule of Expenditures of Federal awards was increased by approximately $59,000 - Assets were decreased by approximately $24,000 - Liabilities were decreased by approximately $23,000 - Revenues were increased by approximately $101,000 - Expenses were increased by approximately $102,000 Recommendation: We recommend the following: - Management review the nature of these entries in order to determine if these types of adjustments could be made during the year as part of the ordinary financial reporting process - Prior to completion of federal and state claims, the Organization reconcile all revenues and expenses for grants on a cost-reimbursement basis to determine that the general ledger is coded accurately to reflect activity on the cost reports Corrective Action Plan: See attachment for Organization?s corrective action plan.

Reference Number: 2020-001 Description: Audit Adjustments: Criteria: Statements on Auditing Standards AU ?314.41 states it is the responsibility of management to implement proper internal controls to provide reasonable assurance about the achievement of the entity?s objectives with regard to the reliability of financial reporting. Condition: After fieldwork began, a significant amount of journal entries were provided to prevent the Organization?s financial statements from being materially misstated. Cause: Inadequate controls to ensure the proper recording of all of the Organization?s financial transactions in accordance with accounting principles generally accepted in the United States of America. Effect: Without the above audit adjustments, the financial statements of the Organization would have been materially misstated for the following reasons: - Federal claims submitted for reimbursement did not agree to the records of the Organization resulting in significant reclassification of expenses in order to reconcile grant activity - Assets were decreased by approximately $332,000 - Liabilities were decreased by approximately $157,000 - Revenues were decreased by approximately $396,000 - Expenses were decreased by approximately $89,000 Recommendation: We recommend the following: - Management review the nature of these entries in order to determine if these types of adjustments could be made during the year as part of the ordinary financial reporting process - Prior to completion of federal and state claims, the Organization reconcile all revenues and expenses for grants on a cost-reimbursement basis to determine that the general ledger is coded accurately to reflect activity on the cost reports Corrective Action Plan: See attachment for Organization?s corrective action plan.

2019-001 United States Department of Education Federal ID# & Program Name: 84.282 Charter Schools Criteria: The Organization?s procedures for disbursements require purchase orders be complied into an order sheet and reviewed by the school leader and/or department head prior to purchase. Condition: A sample of 29 disbursements were selected for testing. Approval of the order sheet by a school leader and/or department head was unverifiable for all purchases. Effect: Unapproved purchases could be charged to the grant. Auditors? Recommendation: The Organization should maintain evidence that purchase orders are being approved. Views of Responsible Official: See attached document for the Organization?s corrective action plan.