STAR CITY SCHOOL DISTRICT

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 84.425U PASS-THROUGH NUMBER 4003 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-001. 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 established 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. Condition: The District paid $219,500 for installation of an HVAC system from the Education Stabilization Fund without obtaining a written contract that included the prevailing wage rate clause. Additionally, weekly certified payrolls were not submitted to the District. Cause: Lack of internal controls and management oversight. Effect: The District did not comply with Wage Rate Requirements. Context: A total of two contracts for facility repairs and improvements were paid from the Education Stabilization Fund. Both 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 architect responsible for the project and supervision of sub-contractors was contacted regarding the non-compliance issue. He obtained the required documentation from the sub-contractor (weekly payrolls). The Superintendent, Assistant Superintendent and CFO/Business Manager have all reviewed the prevailing wage requirements within Davis-Bacon.

SIGNIFICANT DEFICIENCY U.S. DEPARTMENT OF AGRICULTURE PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION CHILD NUTRITION CLUSTER - AL NUMBERS 10.553 AND 10.555 PASS-THROUGH NUMBER 4003 AUDIT PERIOD - YEAR ENDED JUNE 30, 2021 2021-001. Eligibility Criteria or specific requirement: The District is required to process applications submitted for free and reduced price meals for the District?s child nutrition program and classify them in accordance with federal guidelines established by the U.S. Department of Agriculture. Condition: During our examination of 40 free and reduced meal applications, we noted two applications that were incorrectly classified as free and reduced price, respectively. The correct classification was reduced price and free, respectively. Cause: District personnel did not properly monitor the approval process to ensure applications were properly classified. Effect or potential effect: The District did not ensure all applications were properly classified. Context: Examination of 40 free and reduced price meal applications for completeness and proper classification from a total population of 259 approved applications. Recommendation: The District should establish controls in reviewing applications and determining proper classification of applicants. Views of responsible officials: Due to the volume of applications and the processes involved in entering the data from the paper application to the online data system, as well as the lack of multiple reviewers, the District was prone to errors. Going forward, all applications will be reviewed by three individuals within the building in the following order. Additional review, with ongoing training for our new Child Nutrition Director, will help eliminate any errors prior to submission. ? Child Nutrition Director ? District Bookkeeper ? District Business Manager

U.S. DEPARTMENT OF AGRICULTURE PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION CHILD NUTRITION CLUSTER - CFDA NUMBERS 10.553 AND 10.555 PASS-THROUGH NUMBER 4003 AUDIT PERIOD - YEAR ENDED JUNE 30, 2019 Criteria or specific requirement: The U.S. Department of Agriculture Eligibility Manual for School Meals states that income applications must be properly completed to determine eligibility for free or reduced price meals. The U.S. Department of Agriculture (USDA) guidelines require an entity to perform verification procedures for a specific number of applicants for free and reduced price meals. As part of this process, the applicant's household must provide the District with written evidence confirming eligibility. Condition: An Administrative Review for the District was completed by the Arkansas Department of Education, Child Nutrition Unit (ADE, CNU) in January 2019 noting the following: ? Of the eight free/reduced price meal applications chosen for verification, one did not contain sufficient pay information documentation and one had a miscalculation of income. ? Of the 420 free/reduced price meal applications reviewed, two applications were incomplete, the eligibility status on seven applications was determined incorrectly, and seven applications indicating the student was directly certified or categorically eligible for free meals was not adequately documented. As a result of the aforementioned deficiencies, the District was instructed by ADE, CNU to reimburse funds totaling $2,939. This amount was offset by $963 due to an under claim in the month of November resulting in returned funds totaling $1,976. Subsequently, during our test of 40 free and reduced meal applications, we noted one application incorrectly classified as paid meals. The correct classification was free eligibility. The amount of reimbursement under claimed as a result of the difference in eligibility status detected in our test could not readily be determined. Cause: Applicable personnel did not obtain proper training and the District did not provide proper management oversight to ensure compliance with applicable regulations. Effect or potential effect: Free/reduced price meal applications were not properly completed. Acceptable documentation was not obtained and income was not properly calculated to substantiate income used to determine proper classification of meal applications during the verification process. Context: Results of an Administrative Review by the ADE, CNU and examination of forty free and reduced price meal applications for completeness and proper classification from a total population of approved applications of 251. Recommendation: The District should implement procedures to ensure free/reduced price meal applications are properly completed and classified. The District should also implement procedures to ensure proper documentation is received during the verification process. Views of responsible officials: The District has developed a plan to process the applications correctly. All personnel involved received additional proper training. All applications were made complete before being entered into the Lunchtime system. Applications were reviewed a second time. All corrections were made with CNU during the school 2018-19 year.

U.S. DEPARTMENT OF AGRICULTURE PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION CHILD NUTRITION CLUSTER - CFDA NUMBERS 10.553 AND 10.555 PASS-THROUGH NUMBER 4003 AUDIT PERIOD - YEAR ENDED JUNE 30, 2019 Criteria or specific requirement: Monthly claims for reimbursement are required to be submitted to the Arkansas Department of Education, Child Nutrition Unit (ADE, CNU). Reimbursement claim components include the total number of students eligible for and number of students participating in free, reduced price, and paid meals served. The total meals served by category are to be derived from the daily record forms. Condition: An Administrative Review for the District was completed by the Arkansas Department of Education, Child Nutrition Unit (ADE, CNU) in January 2019 noting the District?s November 2018 reimbursement claim did not include 245 free, 78 reduced price and 98 paid breakfasts. Also, the November 2018 reimbursement claim did not include 70 free, 7 reduced price, and 17 paid lunches. The amount of under claimed meals totaled $963. Cause: Applicable personnel did not properly reconcile daily record forms to the reimbursement claim. Effect or potential effect: The District was not properly reimbursed for meals served during the year. Context: Results of an Administrative Review by the ADE, CNU. Recommendation: The District should exercise due care in the posting of data from the monthly account eligibility reports and daily record forms to the monthly claim for reimbursement. Views of responsible officials: The District has corrected the errors found and worked with the Child Nutrition Unit to insure these errors will not occur again. Personnel have received additional training. The amount of under claimed meals was corrected with CNU in the 2018-19 year.