MENA SCHOOL DISTRICTLocal Government

U.S. DEPARTMENT OF AGRICULTURE PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION CHILD NUTRITION CLUSTER - AL NUMBERS 10.553 AND 10.555 PASS-THROUGH NUMBER 5703 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 2024-001 Eligibility Criteria or specific requirement: The District is required to process applications submitted for free and reduced meals for the District's child nutrition program and classify them in accordance with federal guidelines established by the U.S. Department of Agriculture. District officials must indicate the approval date, indicate level of benefit for which each child is approved, and sign or initial the application. Condition: During our test of 25 free and reduced meal applications, we noted 22 meal applications that were processed electronically that did not include a documented review by the determining official. Although the electronic applications were properly classified for the level of benefit eligible, there was no evidence that the determining official manually reviewed and approved the applications before final determination. Cause: District personnel did not properly monitor the approval process to ensure electronic applications were properly completed. Effect or potential effect: Free and reduced price meal applications were not properly completed by the District's determining official. Context: An examination of 25 free and reduced price meal applications for completeness and proper classification from a total population of approved applications of 1,122. Identification as a repeat finding: No Recommendation: The District should establish controls to ensure electronic free and reduced price meal applications are properly completed by the District's determining official. Views of responsible officials: The determining official will print the online application and approve each one by initialing after review. We have also submitted this finding to the software company to request an approval process or check box to be added to the software.

FEDERAL COMMUNICATIONS COMMISSION EMERGENCY CONNECTIVITY FUND PROGRAM - AL NUMBER 32.009 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-001.Activities Allowed or Unallowed / Special Tests and Provisions Criteria or specific requirement: Office of Management and Budget (OMB) 47 CFR § 54.1710 requires entities requesting funding to certify that they are only seeking support for eligible equipment provided to students and school staff who would otherwise lack connected devices sufficient to engage in remote learning. OMB 47 CFR § 54.1706 (b) states that eligible schools cannot request and receive support for the purchase of eligible equipment and services for use solely at the school; however, some on-campus use is permitted for eligible equipment that was purchased primarily to provide off-campus access. Condition: During testing, we identified 652 devices, totaling $227,400, were reimbursed by the Emergency Connectivity Fund. Adequate supporting documentation was not retained to support the actual unmet need for the devices, as required by the grant. Additionally, the devices were purchased primarily for on-campus use. Cause: District's unfamiliarity with the new federal program. The service provider submitted the request for reimbursement without consulting the District to determine the actual amount of equipment provided to students and school staff with unmet needs. Effect or potential effect: The District received funding in excess of the documented actual unmet need for their students and school staff resulting in questionable costs of $227,400. Questioned costs: The questioned costs for 652 devices totaled $227,400. Context: Adequate documentation of actual unmet need could not be provided for 652 devices totaling $227,400. The District purchased and was reimbursed for a total of 830 devices for $286,140. Identification as a repeat finding: No Recommendation: The District should contact the Federal Communications Commission for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The district will contact the FCC and review the procedures used by the E-rate/Technology Coordinator to determine how this came about and develop further procedures to avoid this happening again.

U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 AMERICAN RESCUE PLAN - ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425D AND 84.425U PASS-THROUGH NUMBER 5703 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-002.Equipment and Real Property Management / Special Tests and Provisions Criteria or specific requirement: 29 CFR 5.5 (Wage Rate Requirements) requires all contractors and subcontractors performing construction contracts in excess of $2,000, financed by federal assistance funds, to pay laborers and mechanics employed by the contractor or subcontractor not less than the prevailing wage rates as determined by the Department of Labor for the locality of the project. Non-federal entities shall include in the applicable construction contracts a provision that the contractor or subcontractor comply with those requirements. Such requirements include the submission of weekly certified payrolls for each week in which any contract work is performed, to the non-federal entities. 2 CFR 200.311 requires property records be maintained for real property and improvements made to real property acquired with federal awards. Additionally, 2 CFR 200.326 and Ark. Code Ann. § 18-44-503 require a non-federal entity to obtain a performance bond for the public construction contract. Condition: The District paid $1,322,196 for a capital improvement flooring project from the Education Stabilization Fund without obtaining a performance bond and without obtaining a written contract that included the prevailing wage rate provision, and weekly certified payrolls were not submitted to the District. Additionally, the District did not record in the capital assets subsidiary records capital improvements for a HVAC system or flooring project totaling $154,377 and $1,322,196, respectively, and for equipment totaling $12,138. Cause: Lack of internal controls and management oversight. Effect or potential effect: The District did not comply with Wage Rate Requirements or Bonding Requirements. The District's capital assets subsidiary records were not accurate. Questioned costs:Context: A population of 20 payments for capital improvements and equipment totaling $1,525,445. All were examined. Identification as a repeat finding: No Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The Department of Elementary and Secondary Education will be contacted regarding this matter. The district did not receive guidance from the Department about this issue other than stating that Davis-Bacon wage rules apply. Those materials will be recorded as capital assets and our new capital assets clerk will be trained on the definition and record keeping of such items. This likely occurred simply from the fact that yearly past practice for the district has been to enter the asset as one item in the asset system. Construction in progress has been used as a reconciliation item in fixed assets. There must have been some misunderstanding on this matter because the district does have a statement of coverage for the company that did this work and will provide it. However, if the format is wrong, the district will, in the future, insist that the proper format be used.

US DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES - CFDA NUMBER 84.010 PASS-THROUGH NUMBER 5703 AUDIT PERIOD - YEAR ENDED JUNE 30, 2019 Criteria or specific requirement: Office of Management and Budget (OMB) 2 CFR part 200, subpart E - Cost Principles establish 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: Unallowable costs paid from the Title I program totaling $96,467 were detected for the audit year. These expenditures were for safety and security systems. Cause: Lack of internal controls and management oversight over program expenditures. Effect or potential effect: The District expended Title I program funds of $96,467 for items determined not allowable. Questioned costs: The amount of questioned costs was $96,467. Context: An examination of Title I program non-payroll expenditures totaling $123,026 (32 checks) from a population of $757,141 (311 checks). Two of the 32 checks examined included unallowable costs totaling $54,440. Our sample was a statistically valid sample. An examination of 8 checks for safety and security systems paid from the Title I program totaling $42,027. Recommendation: The District should contact the Arkansas Department of Education for resolution regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The District has contacted Jayne Green with the Arkansas Department of Education (ADE) for proper resolution and guidance regarding this matter. The District will follow the corrective action plan guidance when we receive it. The District will increase internal controls over program expenditures and contact ADE for prior approval.