BARBOUR COUNTY BOARD OF EDUCATION

The Uniform Administrative Requirements, Cost Principles, and Audit Requirements, Special Tests and Provisions for Title I Grants to Local Educational Agencies contains requirements related to maintaining accurate high school graduation rates. In order to determine these rates, the local education agency (“LEA”) must report graduation rate data for all public high schools using the four-year adjusted cohort rate with graduation rate data being reported both in the aggregate and disaggregated by certain subgroups. 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 a 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. Testing revealed eight (8) of thirteen (13) instances in which official written documentation for students’ removal from the adjusted cohort was incomplete or not retained. The Barbour County Board of Education (the “Board”) did not adequately monitor its policies and procedures to ensure compliance with the Special Tests and Provisions requirements of the Title I Grants to Local Educational Agencies. As a result, the Board failed to adequately complete and retain official written documentation of students’ removals from the cohort, which could result in inaccurate high school graduation rates.

The U. S. Code of Federal Regulations Title 2, Part 200.318, of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states that non-Federal entities must have and use its own documented procurement procedures which reflect State and local laws and regulations provided that the procurements conform to applicable Federal law and the standards identified within that section. The Code of Alabama 1975, Title 39, which is a State law, requires the construction, installation, repair, or renovation of public buildings in excess of $100,000.00 that are paid, in whole or part, with public funds to be bid under the provisions of the Public Works Law. The Barbour County Board of Education (the “Board”) entered into two Public Works contracts in fiscal year 2024 for the purchase and installation of LED lights totaling $202,260.84 and for the purchase and installation of a camera system totaling $123,307.00. A total of $272,074.84 of COVID-19 Education Stabilization Funds was expended on the projects during the audit period. The Board did not obtain bids on the project in accordance with the State of Alabama Public Works Law. Instead, the Board used purchasing cooperative contracts which are not allowed under the Public Works Law. As a result, the Board did not comply with the Uniform Guidance procurement requirements for these purchases.

Title 2 U.S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), 2 CFR 200.403(g) outlines the factors affecting allowability of costs charged to a federal award, specifically that costs should be adequately documented. The documentation for disbursements is to be maintained in order to provide a basis for amounts recorded in the Schedule of Expenditures of Federal Awards, to demonstrate compliance with legal requirements, and to substantiate the allowability of purchases. In a test of 40 expenditures charged to the Education Stabilization Fund, nine expenditures were not adequately documented, and in some cases, no documentation was provided. Internal control procedures were not in place to ensure costs charged to the Education Stabilization Fund were adequately documented. As a result, the Barbour County Board of Education did not comply with the Uniform Guidance as it pertains to documentation of costs charged to the Education Stabilization Fund. Recommendation The Board should implement internal control procedures to ensure costs charged to the COVID-19 Education Stabilization Fund are adequately documented.

Title 29, U. S. Code of Federal Regulations, Part 5, Sub-Part A Davis Bacon and Related Acts Provisions and Procedures (the “Davis-Bacon Act”), requires that any construction contract in excess of $2,000 that is funded wholly or in part by federal funds include prevailing wage rate clauses. The laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for locality of project (prevailing wage rates) by the Department of Labor (DOL) and the contractor or subcontractor must submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). The Barbour County Board of Education (the “Board”) entered into a construction project contract totaling $2,642,387.00 that did not include prevailing wage rate clauses. During the current fiscal year, the project was completed and payments totaling $2,642,387.00 were made from Education Stabilization Funds. The Board did not have controls in place to ensure the Davis-Bacon Act wage rate requirements were included in construction contracts; therefore, prevailing wage rate clauses were not included in this contract nor did the contractors submit weekly certified payrolls to the Board. As a result, the Board is not in compliance with the Davis-Bacon Act as it pertains to wage rate requirements. Recommendation The Board should comply with Title 29, U. S. Code of Federal Regulations, Part 5, Sub-Part A Davis Bacon and Related Acts Provisions and Procedures (the “Davis-Bacon Act”) when using COVID-19 Education Stabilization Funds to fund construction contracts in excess of $2,000.00 with the use of mechanics and laborers.

Title 2 U. S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), 2 CFR 200.403(g) outlines the factors affecting allowability of costs charged to a federal award, specifically that costs should be adequately documented. Twenty-five (25) expenditures were initially tested from the Education Stabilization Fund. The test indicated that the Board recorded a journal entry to charge $627,472.58 to the Education Stabilization Fund that was not supported by documentation. Six (6) additional journal entries were tested and four (4) of these journal entries that charged $405,002.44 to the Education Stabilization Fund were not supported by documentation. Therefore, a total of $1,032,475.02 in expenditures charged to the Education Stabilization Fund were undocumented and unsupported. The Board did not have procedures in place to ensure costs charged to the Education Stabilization Fund were adequately documented. As a result, the Board is not in compliance with Uniform Guidance as it pertains to documentation of costs charged to the Education Stabilization Fund. Questioned costs of $1,032,475.02 will be reported for the Education Stabilization Fund which represent material noncompliance to the program, and also a material misstatement to the Schedule of Expenditures of Federal Awards. Recommendation The Board should establish procedures to ensure all costs charged to federal programs, including journal entries, are supported by adequate documentation. Views of Responsible Officials of the Auditee The Board agreed with the finding.

Title 2 U. S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), 2 CFR 200.403(g) outlines the factors affecting allowability of costs charged to a federal award, specifically that costs should be adequately documented. While testing journal entries recorded to cash in the Special Revenue Fund, which accounts for federal programs, we noted several journal entries made by the Board to cash and expenditures that did not include documentation to support the expenditures. One of these journal entries charged costs totaling $35,913.40 to the Supporting Effective Instruction State Grants, a nonmajor federal program. The Board did not have procedures in place to ensure costs charged to the Supporting Effective Instruction State Grants were adequately documented. As a result, the Board did not comply with the Uniform Guidance as it pertains to documentation of costs charged to the Supporting Effective Instruction State Grants and questioned costs of $35,913.40 will be reported for the Supporting Effective Instruction Grants. Recommendation The Board should establish procedures to ensure all costs charged to federal programs, including journal entries, are supported by adequate documentation. Views of Responsible Officials of the Auditee The Board agreed with the finding.

Title 2 U. S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), 2 CFR 200.430(i)(5) outlines the standards for documenting personnel expenses. The current standards require an employee working on a single cost objective or an employee whose salary is supported by only one federal program and employees working on multiple cost objectives to document personnel expenses by completing semiannual certifications of their time and effort spent working on the program. In testing the Title I Grants to Local Educational Agencies (?Title I?) program and the Education Stabilization Fund (?ESF?) program payroll costs, accurate time and effort reports were not provided to document employees? time and effort charged to each program. The Board failed to document time and effort reports for all eighteen (18) employees paid from the Title I program and the ESF program. As a result, the Board is not in compliance with Uniform Guidance as it pertains to the documentation required for personnel services charged to the Title I program and the ESF program.

Reference Number: 2020-003 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Internal Control and Compliance Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Repeat of Prior Year Finding: 2019-009 CFDA Number(s) and Title(s): 84.010 ? Title I Grants to Local Educational Agencies Federal Awarding Agency: U. S. Department of Education Federal Award Number: None Pass-through Entity: Alabama Department of Education Pass-through Award Number: None Questioned Costs: $647,736.61 The Board failed to provide time and effort reports for personnel services charged to the Title I program. Finding Title 2 U. S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), 2 CFR 200.430(i)(5) outlines the standards for documenting personnel expenses. The current standards require an employee working on a single cost objective or an employee whose salary is supported by only one federal program and employees working on multiple cost objectives to document personnel expenses by completing semiannual certifications of their time and effort spent working on the program. In testing the Title I Grants to Local Education Agencies (?Title I?) program payroll costs, time and effort reports were not provided to document employees? time and effort charged to the Title I program. The Board failed to document time and effort reports for all thirteen (13) employees paid from the Title I program. As a result, the Board is not in compliance with Uniform Guidance as it pertains to the documentation required for personnel services charged to the Title I program. Recommendation The Board should ensure proper documentation is retained for all personnel services charged to the Title I program.

Reference Number: 2019-009 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Internal Control and Compliance Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance CFDA Number(s) and Title(s): 84.010 ? Title I Grants to Local Educational Agencies Federal Awarding Agency: U.S. Department of Education Federal Award Number: None Pass-through Entity: Alabama Department of Education Pass-through Award Number: None Questioned Costs: $577,193.19 The Board failed to provide time and effort reports for personnel services charged to the Title I program. Finding Title 2 U. S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), 2 CFR 200.430(i)(5) outlines the standards for documenting personnel expenses. The current standards require an employee working on a single cost objective or an employee whose salary is supported by only one federal program and employees working on multiple cost objectives to document personnel expenses by completing semiannual certifications of their time and effort spent working on the program. In testing the Title I Grants to Local Education Agencies (?Title I?) program payroll costs, time and effort reports were not provided to document employees? time and effort charged to the Title I program. The Board failed to document time and effort reports for all twenty-two (22) employees paid from the Title I program. As a result, the Board is not in compliance with Uniform Guidance as it pertains to the documentation required for personnel services charged to the Title I program.