School Board of Polk County, FloridaLocal Government

Documentation of Monthly Reconciliation Federal Agency: U.S. Department of Education Federal Program Name: Student Financial Aid Cluster Assistance Listing Number: 84.063 Federal Award Identification Number and Year: N/A Award Period: July 1, 2024 – June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 685.300(b)(5) requires the District, on a monthly basis, to reconcile the institutional records with the Pell funds received from the Secretary and the Pell disbursement records submitted to and accepted by the Secretary. Condition: During our audit we noted the District does not maintain documentation of the preparation and review of this reconciliation process. Questioned costs: None Context: Although the reconciliation is being performed, there is no documentation of the preparation and review of the reconciliation. Cause: There was turnover in a key position during the year. Effect: The District is not complying with internal policy and federal requirements. Repeat Finding: No Recommendation: We recommend the District establish policies and procedures to ensure proper documentation of preparation and review of monthly Title IV reconciliations. Views of responsible officials: There is no disagreement with the audit finding.

Eligibility Federal Agency: U.S. Department of Education Federal Program Name: Student Financial Aid Cluster Assistance Listing Number: 84.063 Federal Award Identification Number and Year: N/A Award Period: July 1, 2024 – June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance; Noncompliance (Other Matters) Criteria or specific requirement: Per the Code of Federal Regulations, 34 CFR 673.5, students may not be awarded need based aid in excess of their calculated need. Condition: Based on our testing, we noted one student who was awarded the wrong amount. Questioned costs: $60 Context: We noted one error in our sample of 40 students tested. Cause: The student’s award was initially miscalculated when the award letter was created. The correction was made during the disbursement process to adjust the Pell amount but a new award letter was never created. Effect: The student’s award exceeded the amount they were eligible for. Repeat Finding: No Recommendation: We recommend that a process be implemented to ensure the proper cost of attendance is used so that amounts awarded do not exceed calculated financial need. Views of responsible officials: There is no disagreement with the audit finding.

Title IV Credit Balances Federal Agency: U.S. Department of Education Federal Program Name: Student Financial Aid Cluster Assistance Listing Number: 84.063 Federal Award Identification Number and Year: N/A Award Period: July 1, 2024 – June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance; Noncompliance (Other Matters) Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 668.164(h)(2)(ii) requires title IV, HEA credit balances to be paid directly to the student or parent as soon as possible, but no later than fourteen (14) days after the first day of class of a payment period if the credit balance occurred on or before the first day of class of that payment period. Condition: We noted instances where Title IV credit balances were not paid to students in a timely manner. Questioned costs: None Context: We noted 11 instances in our sample of 40 where the refund was processed outside the 14 - day time frame. Cause: The District’s policies and procedures did not ensure Title IV credit balances were paid in a timely manner. Effect: Certain title IV credit balances were not paid in a timely manner. Repeat Finding: No Recommendation: We recommend that the District review its policies and procedures for Title IV credit balances to ensure they are paid in a timely manner. Views of responsible officials: There is no disagreement with the audit finding.

Common Origination & Disbursement Reporting Federal Agency: U.S. Department of Education Federal Program Name: Student Financial Aid Cluster Assistance Listing Number: 84.063 Federal Award Identification Number and Year: N/A Award Period: July 1, 2024 – June 30, 2025 Type of Finding: Material Weakness in Internal Control over Compliance; Noncompliance (Other Matters) Criteria or specific requirement: The Code of Federal Regulations, 34 CFR § 685.301(d)(2) and 34 CFR § 690.83(a)(2), institutions are required to report disbursement information to the Common Origination & Disbursement (COD) System no later than 15 days after making a Title IV disbursement or becoming aware of a change to previously reported disbursement data. Institutions must ensure that all disbursement dates reported to COD accurately reflect the actual date the disbursement was made or became ready for delivery to the student. Condition: We noted instances of late or inaccurate reporting to COD. Questioned costs: None Context: Pell Disbursement dates for 38 of 40 awards were inaccurately reported in COD, with 15 reported outside the 15‑day timeframe. This occurred because disbursements were posted one day prior to sending the COD file, causing timing discrepancies in reported dates. Cause: Human error within the school’s system and processing controls. Effect: Issues with untimeliness reporting could result with potential non-compliance. Repeat Finding: No Recommendation: We recommend the District evaluate its procedures and policies around reporting Pell disbursements to COD to ensure that student information is reported accurately and timely. Views of responsible officials: There is no disagreement with the audit finding.

Return to Title IV Federal Agency: U.S. Department of Education Federal Program Name: Student Financial Aid Cluster Assistance Listing Number: 84.063 Federal Award Identification Number and Year: N/A Award Period: July 1, 2024 – June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 668.22(h)(4)(ii) states within 30 days of the date of the institution's determination that the student withdrew, an institution must send a notice to any student who owes a title IV, HEA grant overpayment as a result of the student's withdrawal from the institution in order to recover the overpayment in accordance with paragraph (h)(4)(i) of this section. Condition: During our audit we noted instances where the District did not notify students that they were required to returns funds to the U.S. Department of Education based on the refund calculation performed by the District. The District did not return funds on behalf of the student. Questioned costs: None Context:. This was noted for 9 out of the 13 students tested. Cause: Post‑withdrawal disbursement notifications are not separately issued to students; the student’s signed award letter is relied upon as the formal notification of potential PWD eligibility The District did not have a process in place to notify all students when they were required to return funds to the Department of Education. Effect: Federal Funds may not have been returned to the Department of Education, and the student was not informed that they needed to do so. Repeat Finding: No Recommendation: We recommend that a process is put in place to ensure that all students are notified upon withdrawal they may be required to return federal award funds back to the Department of Education. Views of responsible officials: There is no disagreement with the audit finding.

Special Tests and Provisions Federal Agency: U.S. Department of Education Federal Program Name: Student Financial Aid Cluster Assistance Listing Number: 84.063 Federal Award Identification Number and Year: N/A Award Period: July 1, 2024 – June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance; Noncompliance (Other Matters) Criteria or specific requirement: The Code of Federal Regulations, 34 CFR § 668.22, requires institutions administering Title IV funds to calculate Return of Title IV (R2T4) amounts using the correct number of clock hours a student was scheduled to attend as of the withdrawal date. Accurate use of scheduled hours is essential to determining the proper percentage of Title IV aid earned, the amount to be returned, and any post‑withdrawal disbursement eligibility. Condition: Financial Aid Coordinators made manual errors when determining the number of clock hours students were scheduled to complete as of their withdrawal dates. These miscalculations directly affected the accuracy of the R2T4 process, resulting in incorrect determinations of earned aid and improper calculation of post‑withdrawal disbursement amounts. In several cases, these human errors caused students to be either over-awarded or under-awarded Title IV funds. Questioned costs: $396 CLA extrapolated the questioned costs and determined this is not a material weakness that would result in a material misstatement in the F/S. Context: CLA determined that the District miscalculated scheduled clock hours for three students in the R2T4 process. Cause: Financial Aid Coordinators made manual errors when determining the number of clock hours students were scheduled to complete as of their withdrawal dates. Effect: As a result of these manual miscalculations, R2T4 determinations did not accurately reflect the amount of Title IV aid students had earned at the time of withdrawal. This led to improper post‑withdrawal disbursements, with some students receiving more aid than they were entitled to and others receiving less. Repeat Finding: No Recommendation: It is recommended that the District strengthen its internal controls over the R2T4 calculation process by implementing a secondary review or quality‑assurance check of scheduled clock hours prior to finalizing R2T4 calculations. Staff should receive targeted training on the requirements of 34 CFR § 668.22, particularly regarding the use of scheduled hours in determining earned aid and post‑withdrawal disbursement eligibility. Additionally, standardized calculation worksheets or system‑generated hour reports should be utilized to reduce reliance on manual entry and minimize the risk of human error. Views of responsible officials: There is no disagreement with the audit finding.

240 Day Outstanding Payments Federal Agency: U.S. Department of Education Federal Program Name: Student Financial Aid Cluster Assistance Listing Number: 84.063 Federal Award Identification Number and Year: N/A Award Period: July 1, 2024 – June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance; Noncompliance (Other Matters) Criteria or specific requirement: The Code of Federal Regulations, 34 CFR § 668.164(h)(2), institutions must return Title IV credit balance funds to the U.S. Department of Education no later than 240 days from the date a check is issued if the student fails to negotiate the check. Institutions are required to monitor outstanding Title IV disbursements and complete timely returns to maintain compliance with federal cash management regulations. Condition: During our testing we noted instances where Title IV checks were outstanding more than 240 days. Questioned costs: $633 This finding includes a questioned cost, however CLA determined this is not a material weakness that would result in a material misstatement in the F/S as the amount of the questioned cost is trivial. Context: As of June 30, 2025 we noted three Title IV checks outstanding more than 240 days. Cause: The client was not aware that the credit balance needed to be remitted back to the Department of Education. Effect: These Title IV funds should be returned to the U.S. Department of Education. Repeat Finding: No Recommendation: We recommend the District implement a review process for outstanding student payments to ensure any that include Title IV funds are refunded to the U.S. Department of Education within 240 days. Views of responsible officials: There is no disagreement with the audit finding.

Gramm-Leach-Bliley Act Federal Agency: U.S. Department of Education Federal Program Name: Student Financial Aid Cluster Assistance Listing Number: 84.063 Federal Award Identification Number and Year: N/A Award Period: July 1, 2024 – June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance; Noncompliance (Other Matters) Criteria or specific requirement: The Gramm-Leach-Bliley Act (Public Law 106-102) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data. (16 CFR 314) The Federal Trade Commission considers Title IV-eligible institutions that participate in Title IV Educational Assistance Programs as “financial institutions” and subject to the Gramm-Leach-Bliley Act (16 CFR 313.3(k)(2)(vi). Condition: During our audit procedures, we noted three elements that are not addressed in the District’s written information security program: (1) it does not identify a qualified individual to coordinate the information security program, (2) it does not include a change management policy, (3) it does not document continuous monitoring capabilities. Questioned costs: N/A Context: The District has policies related to change management, continuous monitoring, and designating a qualified individual. However, those policies are not included in the District’s written information security program. Cause: The District’s written information security program does not include all required elements. Effect: Noncompliance with the Gramm-Leach-Bliley Act. Repeat Finding: No Recommendation: We recommend that the District update its written information security program to ensure it includes all required elements. Views of responsible officials: There is no disagreement with the audit finding.

High School Diploma or Equivalent Federal Agency: U.S. Department of Education Federal Program Name: Student Financial Aid Cluster Assistance Listing Number: 84.063 Federal Award Identification Number and Year: N/A Award Period: July 1, 2024 – June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance; Noncompliance (Other Matters) Criteria or specific requirement: 34 CFR 600.7(a)(1) establishes institutional eligibility thresholds for certain ratios, including the percentage students without a high school diploma or equivalent. Condition: The District provided the percentage of students that lack a high school diploma or its equivalent. However, we were unable to substantiate the District’s calculation of the percentage of students that lack a high school diploma or its equivalent. Questioned costs: N/A Context: The District’s ratios indicate they are in compliance with 34 CFR 600.7(a)(1). Cause: The District was unable to provide data or documentation to support the percentage of students that lack a high school diploma or its equivalent. Effect: We were not able to determine the accuracy of the District’s percentage of students that lack a high school diploma or its equivalent. Repeat Finding: No Recommendation: We recommend that the District establish policies and procedures to ensure the completeness and accuracy of documentation to support the percentage of students that lack a high school diploma or its equivalent. Views of responsible officials: There is no disagreement with the audit finding.

2022 ? 003 Controls over Allowable Costs Federal agency: Florida Department of Education Federal program titles: Title 1 Grants for Local Education Agencies, Education Stabilization Fund Federal Award Identification Number and Year: 530-2122B-2CB01, 530,1211A-2C001, 530-1211D- 2CR01, 530-1211G-2CR01, 530-1211H-2CR01, 530-1211M-2CR01, 530-1211R-2CR01, 530-1211T- 3CR01, 530-1230A-1C001, 530-1230B-1CS01, 530-1230F-1C001, 530-1240A-1C001, 530-1240C- 1C001, 530-1240F-1C001, 530-1240S-1C001, 530-1241B-1CR01, 530-1241C-1CR01, 530-1241D- 1CR01, 530-1241E-1CR01, 530-1241P-2C001, 530-1241V-2CR01, 530-1281E-2C001, 530-1281N- 3CR01 Assistance Listing Numbers: 84.010, 84.425 (E, F, C, D, U) Award Period: July 2021 through June 2022 & July 2021 through September 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Title 2, Section 200.303(a), CFR, requires the District to maintain effective internal controls over its federal awards. To ensure charges are allowable, an appropriate system of internal controls requires that review and approval of program or grant expenditures be performed by personnel who possess adequate knowledge and experience of program requirements. Condition: Certain supervisors are reviewing timecards for time and effort reporting as required by Uniform Guidance. Questioned costs: None Context: In a statistically valid sample of forty salary and benefit expenditures for Title 1, four records or 10% did not have supervisory approval. In a statistically valid sample of forty salary and benefit expenditures for Education Stabilization, five records or 12.5% did not have supervisory approval. Cause: The District did not maintain adequate supervisory approval of time and effort documentation. Effect: Without supervisory approval, the potential exists that payroll and benefit costs could be improperly charged to a grant. Repeat Finding: Yes, see 2021-002. Recommendation: We recommend a consistent timesheet approval process be used across the District to ensure all time and effort documentation is approved by a knowledgeable supervisor. Views of responsible officials: There is no disagreement with the audit finding.

The District did not always comply with Federal regulations by maintaining records to accurately reflect employee work performed for the CNC and support the distribution of employee salary and benefit charges to the CNC. Title 2, Section 200.430(i), Code of Federal Regulations (CFR), requires that charges for Federal awards for salaries be based on records that accurately reflect the work performed and support the distribution of employee salaries among specific activities or cost objectives if the employee works on more than one Federal award or a Federal award and non-Federal award. In addition, Title 2, Section 200.303(a), CFR, requires the District to maintain effective internal controls over the CNC. To ensure charges are allowable, an appropriate system of internal controls requires that review and approval of program or grant expenditures be performed by personnel (e.g., the food service director) who possess adequate knowledge and experience of program requirements. For the 2020-21 fiscal year, the District reported CNC expenditures totaling $47.2 million, including $24.7 million for salaries and benefits for 1,178 employees. To determine the propriety and allowability of CNC expenditures, we requested for examination District records supporting expenditures totaling $714,390 for 100 percent of 5 employees? salaries and benefits and expenditures totaling $356,538 for the portions, ranging from 25 to 95 percent, of 9 other employees? salaries and benefits. Although we requested, District records were not provided to identify the work the 9 employees performed for the CNC or to support the portions of their salaries and benefits charged to the CNC. We expanded our procedures to interview the 9 employees and determined that their salaries and benefits were appropriately distributed to the CNC. However, our procedures cannot substitute the District?s responsibility to ensure that salaries and benefits charged to the CNC are properly supported. The District did not maintain records identifying the work the 9 employees performed for the CNC or to support the portions of their salaries and benefits charged to the CNC, and an employee with knowledge and experience of CNC requirements (e.g., the food service director) was not required to, and did not, document review and approval of the salary and benefit charges. Absent effective procedures to document support for the distribution of employee salaries and benefits to the CNC, including the documented review and approval of those charges by the food service director or other personnel with knowledge and experience of CNC requirements, there is an increased risk that expenditures may be inappropriately charged to the CNC. The District should establish procedures to ensure that District records accurately reflect the work performed for the CNC and support the distribution of employee salary and benefit charges to the CNC. Such procedures should require that the food service director or other personnel with knowledge and experience of CNC requirements documents review and approval of those charges. The District will implement new procedures to ensure that District records accurately reflect the work performed for the CNC and support the distribution of employee salary and benefit charges to the CNC. Reports will be reviewed and signed by the Director of School Nutrition.

2020 ? 002 Subrecipient Monitoring Federal agency: U.S. Department of Education Federal program title: Special Education ? Grants to States CFDA Number: 84.027 Pass-Through Agency: Florida Department of Education Pass-Through Number(s): 262, 263 Award Period: July 1, 2019 through June 30, 2020 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: A pass-through entity (PTE) must clearly identify to a subrecipient: (1) the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.331(a)(1); (2) all requirements imposed by the PTE on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.331(a)(2)); and (3) any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the Federal award (e.g., financial, performance, and special reports) (2 CFR section 200.331(a)(3)). Condition: The District did not provide subawards that include all of the requirements of 2 CFR section 200.331(a)(1) to subrecipients. Questioned costs: None Context: In our subrecipient monitoring testing, we tested six charter schools. We noted the District provides an allocation letter to each subrecipient, but the letter does not include all of the elements of a subaward required by 2 CFR section 200.331(a) sufficient for the PTE to comply with Federal statutes, regulations, and the terms and conditions of the award. Specific elements of the subaward that were not communicated to the subrecipient include the following: ? Subrecipient's unique entity identifier ? Federal Award Identification Number (FAIN) ? Federal Award Date of award to the recipient by the Federal Agency ? CFDA Number and Name ? Identification of whether the award is R&D ? Indirect Cost Rate of the Federal Award Cause: The District?s policies and procedures do not include a requirement to provide a subaward with all required elements of 2 CFR section 200.331(a) when each charter school is notified of their allocation of Federal funding. Effect: The lack of controls in place could result in noncompliance with Federal statutes, regulations, and the terms and conditions of the award. Repeat Finding: No Recommendation: We recommend the District provide subaward agreements to all subrecipients that include the applicable requirements of 2 CFR 200.331(a). Views of responsible officials: No disagreement.