Spartanburg County School District 3Local Government

Finding 2025-001 - Internal Controls over Allowable Costs U.S. Department of Education Pass-through S.C. Department of Education Title I ALN 84.010 Grant / FAIN: 24 Title I / S010A230040 Grant Period: 07/01/23 - 09/30/25 25 Title I / S010A240040 Grant Period: 07/01/24 - 09/30/26 23 Title I Targeted / S010A220040 Grant Period: 07/01/22 - 09/30/24 24 Title I Targeted / S010A230040 Grant Period: 07/01/23 - 09/30/25 Questioned Costs: None Special Education Cluster ALN 84.027 & 84.173 Grant / FAIN: 23 IDEA / H027A230081Grant Period: 07/01/22 - 09/30/24 24 IDEA / H027A230081 Grant Period: 07/01/23 - 09/30/25 25 IDEA / H027A230081 Grant Period: 07/01/24 - 09/30/26 24 IDEA Preschool / H173A230085 Grant Period: 07/01/23 - 09/30/25 25 IDEA Preschool / H173A240085 Grant Period: 07/01/24 - 09/30/26 Questioned Costs: None Criteria:All expenditures that are claimed under federal programs by a subrecipient through the SC Department of Education are required to utilize the Grants Accounting Processing System(GAPS) where by the District submits claims for reimbursement based on the expenditures incurred by the District and against its approved budget. Condition: The District submitted claims for reimbursement using the GAPS system; however the District's claims for reimbursement did not match the functions and objects reflected in the financial records. Cause: The District failed to properly submit budget amendments to reallocate funding between the approved functions and objects in the Distric'ts approved budget. The District claimed expenditures where budgets would allow. Effect or Potential Effect: The District could expend funds on which it cannot be reimbursed. The District's approved budget dictates the allowable expenditures under the District's federal program plan. If expenditures are claimed under the improper function and object as budgeted and without completing a budget amendment request, the District could be required to pay back the unsubstantiated expenditures. Context: Based on a selection of 25 expenditures, 2 were found to be expended in unbudgeted functions. After further review of all expenditure claims for the two major programs, it was determined that multiple expenditures were claimed under the incorrect budgetary function. Repeat Finding: This is not a repeat finding. Recommendation: The District should properly complete budgetary amendments to ensure that all federal claims properly reflect the appropriate functions and objects by which the District expends its federal funding. Time should be taken to ensure that each claim agrees to the functions and objects in which the expenditures have been reported. Views of Responsible Officials: The finance department will monitor federal budgets within GAPS and will do timely budget amendments with the SDE in order to make sure that all federal expenditures are spent within the proper function and object codes in GAPS.

Finding 2025-002 - Internal Controls over Procurement, Suspension and Debarment U.S. Department of Education Pass-through S.C. Department of Education Special Education Cluster ALN 84.027 & 84.173 Grant / FAIN: 23 IDEA / H027A230081 Grant Period: 07/01/22 - 09/30/24 24 IDEA / H027A230081 Grant Period: 07/01/23 - 09/30/25 25 IDEA / H027A230081 Grant Period: 07/01/24 - 09/30/26 24 IDEA Preschool / H173A230085 Grant Period: 07/01/23 - 09/30/25 25 IDEA Preschool / H173A240085 Grant Period: 07/01/24 - 09/30/26 Questioned Costs: None Criteria: Prior to expending federal funds with any vendor, the District is required to check to ensure the vendor has not been either (1) suspended or (2) debarred from doing business with governmental entities. This should be done on the System for Award Management (SAM.gov). Condition: The District did not check SAM.gov to ensure the vendors utilized during the current fiscal year were suspended or debarred from doing business with governmental entities. Cause: The previous CFO had been the one in prior years to check fo rsuspended and debarredvendors. Due to his retirement, the new CFO was not aware of this requirement. Effect or Potential Effect: The District could spend money with vendors that are not allowed to do government work causing the District to fund those expenditures out of the general fund or non-federal money when it was intended to be federally funded. Context: Out of a sample of 25 vendors tested, no vendors were found to be suspended or debarred. However, upon inquiry with District staff, it was determined that the actual verification was not being performed. Because District staff was unaware of the requirement, we determine this to be a systemic issue. Repeat Finding: This is not a repeat finding. Recommendation: The District should implement strict internal controls that every vendor is verified at the start of the year to SAM.gov when the purchase orders are being prepared by the various departments. This will ensure that no purchase orders, or subsequent purchases, are made to vendors that are suspended or debarred from either federal or local funds. Views of Responsible Officials: The finance department will verify with SAM.gov that any new vendors are neither suspended or debarred from doing business with the school district.