Bay St. Louis-Waveland School DistrictLocal Government

Significant Deficiency/ Immaterial Non-Compliance Finding 2025-001: Procurement. U.S. Department of Education Passed-through Mississippi Department of Education Program Name: Special Education Cluster – IDEA Part B Program Assistance Listing Number: 84.027 Compliance Requirement: Procurement CRITERIA: Recipients of federal funds must follow federal procurement rules and regulations. For services in excess of $10,000, the district is required to obtain two quotes and/or proposals. CONDITION: During our testing of expenditures from the Special Education – IDEA Part B program, we noted the district expended in excess of $10,000 with two vendors on therapy services for special education students. The services do appear to be for allowable costs and activities under the IDEA Part B grants. However, the district was unable to provide evidence that a required second quote and/or a proposal was obtained. CONTEXT: The school district did not follow requirements related to procurement of goods and services. 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 purchasing requirements.

Section III: Federal Award Findings and Questioned Costs Material Weakness Finding 2023-002 Finding Cash management excessive cash and fund balances. Programs: Title I Grants to Local Educational Agencies, ALN #84.010 Compliance Requirement: Cash Management Repeat Finding: No Criteria: Management is responsible for complying with the requirements of the Mississippi Department of Education Procedures Manual, which recommends that expenditures should be expended before the reimbursements are requested for reimbursable grants. Condition: We noted the following exceptions during our review of cash management: 1. The cash balance was excessive for Title I Fund in the amount of $87,497 These amounts were included in the allocation of funds to the district for reimbursement of expenditures that had not been expended by the district. 2. The amounts were not presented as deferred revenues on the district’s financial statements. Context: Federal funds were reviewed for excessive cash balances and/or fund balances at year end. Cause: Improper internal controls resulted in the district not recording expenditures and reimbursements accurately and timely. Expenditures and reimbursements for request were not properly reconciled. Effect: The effect could lead to fraud and errors occurring if transactions are not properly recorded accurately and timely. Improper internal controls concerning these particular fund allocations could result in questioned cost by the federal agencies. Questioned Cost: Title I School Grants to local educational agencies - $89,497 Recommendation: The district should implement stronger internal controls to ensure that all reimbursements are requested accurately in each area when the expenditure is expended by the district. Views of Responsible Officials Please see Auditee’s Corrective Action Plan.