HUMPHREYS COUNTY SCHOOL DISTRICT

Material Weakness & Non-Compliance: Accounts payable testing and internal controls. U.S. Department of Education Passed-through Mississippi Department of Education Program Name: Elementary and Secondary School Emergency Relief II & ARP (ESSER) Program CFDA: 84.425D & 84.425U Compliance Requirement: Allowable Costs/Cost Principles CRITERIA: Recipients of federal funds must properly account for funds expended under the program. CONDITION: During our testing of the cutoff surrounding accounts payable and construction in process, we noted the district was not properly accruing construction invoices or the related retainage payable on construction contracts funded by the ESSER grants. The result was the Schedule of Expenditure of Federal awards was materially misstated. This error was corrected by auditor adjustment of approximately $296,000. CONTEXT: The school district did not follow requirements related to properly accounting for funds expended under the program. CAUSE: The cause is a result of not properly implementing a designed system of accounting and internal controls. EFFECT: Noncompliance with state and federal purchasing laws. IDENTIFICATION OF REPEAT FINDING: No QUESTIONED COSTS: None RECOMMENDATION: The school district should implement policies and procedures to ensure all applicable compliance requirements are being met. VIEWS OF RESPONSIBLE OFFICIALS: We will implement policies or procedures to establish an internal control system that will ensure strong financial accountability, including compliance with state and federal grant requirements.

2024-002 a. Name of Contact Person Responsible for Corrective Action: LaKenya Thomas– Executive Director of Finance & Business Affairs b. Corrective Action Planned: We will implement policies or procedures to establish an internal control system that will ensure strong financial accountability and to ensure compliance with all state and federal grant requirements. c. Anticipated Completion Date: Immediately.