DREW CENTRAL SCHOOL DISTRICT

U.S. DEPARTMENT OF AGRICULTURE PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION CHILD NUTRITION CLUSTER - AL NUMBERS 10.553 AND 10.555 PASS-THROUGH NUMBER 2202 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 2024-001. Allowable Costs/Cost Principles Criteria or specific requirement: Office of Management and Budget (OMB) 2 CFR part 200, subpart E – Cost Principles, establishes principles for determining the allowable costs incurred by the District under federal awards. Such costs are to be necessary and reasonable for the performance of the federal award. Condition: In our test of non-payroll expenditures, we identified unallowable costs totaling $8,217 that were paid from the Child Nutrition program. Cause: Lack of internal controls and management oversight over program expenditures. Effect or potential effect: Unallowable costs of $8,217 were paid from Child Nutrition funds. Questioned costs: The amount of questioned costs was $8,217. Context: An examination of 13 Child Nutrition non-payroll expenditures totaling $45,852 from a population of 115 checks totaling $692,615. Identification as a repeat finding: No Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education- Child Nutrition Unit (DESE-CNU) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The Chief Financial Officer (CFO) and the Child Nutrition Director (CND) will take more care to ensure that all expenditures are properly classified per the Arkansas Public School Computer Network manual. If at any time the CFO and CND are unsure if an expense is allowable, the CND will contact the Child Nutrition Unit at DESE for guidance prior to purchasing. The District will contact DESE for guidance regarding this matter and will implement proper controls over program expenditures moving forward.

U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TWENTY-FIRST CENTURY COMMUNITY LEARNING CENTERS - AL Number 84.287C PASS-THROUGH NUMBER 2202 AUDIT PERIOD - YEAR ENDED JUNE 30, 2022 Criteria or specific requirement: The District is required to budget Twenty-First Century expenditures and submit such information to the Arkansas Division of Elementary and Secondary Education (DESE). Actual expenditures may not exceed the budget amounts for specific categories by more than 10 percent without prior approval from the DESE and submission of budget amendments or adjustments. Condition: The District did not budget for function 1170 (Summer School) in the Twenty-First Century program but expended $41,918 from this function. Cause: The District failed to properly monitor expenditures against the approved budget. Effect or potential effect: The District did not submit applicable budget amendments or adjustments for DESE approval for the Twenty-First Century program resulting in actual expenditures exceeding budgeted amounts. Context: Comparison of the entire program's budgeted expenditures to actual expenditures as reported on the annual financial report revealed the one isolated instance. Recommendation: The District should implement procedures to ensure expenditures are properly monitored and budgets are amended as necessary, and consult with DESE for further guidance regarding this matter. Views of responsible officials: The District will take more care to ensure that all expenditures are properly monitored and budgets are amended as necessary, and consult with DESE for further guidance regarding this matter.