Columbus County Board of EducationLocal Government

U.S. Department of Education Passed Through the N.C. Department of Public Instruction Program Names: Title I, Grants to Local Educational Agencies and Supporting Effective Instruction State Grants AL #: 84.010 and 84.367 SIGNIFICANT DEFICIENCY Eligibility Criteria: For programs funded under Title I, Part A (AL # 84.010) and Supporting Effective Instruction State Grants (AL # 84.367), 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. Condition: Management did not have documentation on file to support that timely and meaningful consultation with private school officials in the district’s service area took place to make them aware of their right to receive Title I or Supporting Effective Instruction program services. Management indicated that the school was in fact contacted, but the supporting documentation was misplaced. Management indicated that they never sent letters to the private schools in the district’s service area notifying them of their right to participate in the federal programs in the district. Management stated that they were unaware there were private schools within the district. Effect: The Board is not in compliance with the aforementioned criteria. Cause: Controls were not in place to ensure that the aforementioned program requirement was adhered to. Questioned costs: None. Identification of a repeat finding: This is not a repeat finding from the immediate previous audit. Recommendation: We recommend that controls and procedures be put in place to ensure that consultation with private school officials takes place in a timely manner each year and that documentation is maintained on file to evidence these consultations. Views of responsible officials and planned corrective actions: The Board of Education agrees with this finding. Management will take the necessary actions as described in the Corrective Action Plan.

U.S. Department of Education Passed Through the N.C. Department of Public Instruction Program Name: Supporting Effective Instruction AL #: 84.367 SIGNIFICANT DEFICIENCY Compliance – Special Tests and Provisions Criteria: Budget amendments are required if an LEA has exceeded the cumulative budgeted line items by 10% or more of their current total approved budget. These amendments are submitted through the LBAAS system and approved by the individual program consultant at DPI. Condition: The district overspent its federal PRC 103 (Supporting Effective Instruction) budgeted expenditures for account code 3.5110.103.135 by $64,732 which is approximately 17% of the total PRC 103 approved budget. Effect: The Board is not in compliance with the aforementioned criteria. Cause: Controls were not in place to ensure that the aforementioned program requirement was adhered to. Questioned costs: None. Identification of a repeat finding: This is not a repeat finding from the immediate previous audit. Recommendation: We recommend that controls be put in place to ensure that budget amendments are completed in accordance with program requirements. Views of responsible officials and planned corrective actions: The Board of Education agrees with this finding. Management will take the necessary actions as described in the Corrective Action Plan.

U.S. Department of Education Passed Through the N.C. Department of Public Instruction Program Name: Title I, Grants to Local Educational Agencies (AL #: 84.010) SIGNIFICANT DEFICIENCY Compliance – Matching, Level of Effort, Earmarking. Criteria: A school unit may spend no more than 12% of its yearly allotment for administration and supervision of the Title I program (N.C. State Board of Education Policy). Condition: The district expended 14.05% of its Title I allotment for administration and supervision expenditures. Effect:The district is not in compliance with the aforementioned criteria. Cause: Controls were not in place to ensure that the aforementioned program requirement was adhered to. Questioned Costs: $20,568.87. Identification of a repeat finding: This is not a repeat finding from the immediate previous audit. Recommendation: We recommend that management implement controls and procedures to ensure that the aforementioned program requirement is understood and adhered to. Views of responsible officials and planned corrective actions: The Board of Education agrees with this finding. Management will take the necessary actions as described in the Corrective Action Plan.

Finding 2021-002 Allowable Costs-Indirect Costs SIGNIFICANT DEFICIENCY Criteria: 2 CFR Chapter 1, Chapter II, Part 200, et. al., ?Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards?, establishes principles and standards for determining costs applicable to grants, contracts, and other agreements. A cost is allowable for Federal reimbursement only to the extent of benefits received by Federal programs and costs must meet the basic guidelines of allowability, reasonableness, allocability and remain net of all applicable credits. Condition: Local Education Agencies may charge indirect costs to a Federal program using a restricted indirect cost rate, provided it meets the aforementioned criteria. For the year ended June 30, 2021, the Board charged indirect costs to the Special Education Cluster of Programs, Title I Grants to Local Education Agencies, and the Education Stabilization Fund in excess of what was allowable. Effect: The U.S. Department of Education was overcharged indirect cost. Cause: The Board initially performed the indirect cost computation using total program allotment amounts as opposed to actual program expenditures incurred in 2021. Questioned costs: $3,870, $8,692, and $63,061. These are the combined amounts which were charged in excess of the amounts allowed for the Title 1 Grants to Local Education Agencies, all Special Education Cluster programs, and the Education Stabilization Fund, respectively. Recommendation: We recommend that management allow sufficient time for final review of all indirect cost computations prior to year end in order to determine whether any excess indirect costs have been charged. Any instances of overages, including the unallowed amount detailed above, should be settled with the Department of Public Instruction and Direct Programs. Views of responsible officials and planned corrective actions: Management agrees with this finding. Please refer to Schedule 11 for the Corrective Action Plan.

Finding 2020-002 Noncompliance: Activities Allowed or Unallowed ? Purchase Orders MATERIAL WEAKNESS Criteria: In accordance with North Carolina General Statutes 115C-441, if an obligation of the Board is evidenced by a contract or agreement requiring the payment of money or by a purchase order for supplies and materials, the contract or purchase order shall include on its face a certificate stating that the instruments has been preaudited to ensure that sufficient funds have been appropriated and available in the current fiscal year to cover the sums obligated by the transaction for the current fiscal year. The preaudit certificate, which shall be signed by the finance officer, shall take substantially the following form: ?This instrument has been preaudited in the manner required by the School Fiscal and Control Act.? Condition: Purchase orders were not used prior to the Board?s disbursement of cash to pay for supplies and materials. Effect: Expenditures were incurred prior to obtaining the preaudit certificate. Cause: Proper internal control procedures were not in place to ensure that obligations were being appropriately pre-audited by the finance officer. Recommendation: Internal control procedures should be put in place to ensure that potential obligations are appropriately pre-audited before the actual expenditure is incurred. Views of responsible officials and planned corrective actions: Management agrees with this finding. Please refer to Schedule 11 for the Corrective Action Plan. Questioned Costs: A sample of 18 School Food Service Fund expenditures yielded 15 instances, in the amount of $2,244, where expenditures were incurred prior to obtaining the preaudit certificate. However, based on the nature of the expenditure and the supporting documentation accompanying the obligation, the expenditures do appear to be reasonable and necessary. The Board does not find it practicable to extrapolate these items in order to determine a likely questioned cost.

U.S. Department of Education Program Names: Title 1 CFDA #'s: 84.010, 84.389 Criteria: A budget was not adopted timely so all expenditures over carry forward amount had to be reimbursed by the General Fund. Condition: Columbus County Schools did not adopt a budget until November so Title 1 could not expend more than their carry forward balance. Expenditures for July - November exceeded the carry forward balance and the General Fund had to cover the excess expenses. Effect: The Board had to reimburse Title 1 for salaries paid that exceeded the carry forward balance. Cause: Budget was not approved by the Board timely due to changes in finance staff, including the finance officer. Recommendation: The Board should ensure the budget is adopted in a timely manner. Views of responsible officials and planned corrective actions: The Board agrees with this finding. The finance officer and board will work together to ensure the budget is adopted before the beginning of the year.

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