MARVELL SCHOOL DISTRICT

MATERIAL WEAKNESS U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 - EDUCATION STABILIZATION FUND - AL NUMBERS 84.425D AND 84.425U PASS-THROUGH NUMBER 5404 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 and standards for determining allowable costs incurred by the District under federal awards. Such costs are to be necessary and reasonable for the performance of the federal award and adequately documented. Condition: During our examination of Education Stabilization Fund payroll expenditures, we noted internal control deficiencies that resulted in the District paying $17,876 of unallowable salary payments and overpaying one employee $58. Cause: Lack of internal controls and management oversight over program expenditures. Effect or potential effect: Unallowable costs of $17,934 were paid from COVID-19 Education Stabilization Fund. Questioned costs: The amount of questioned costs was $17,934. Context: An examination of Education Stabilization Fund payroll expenditures for 6 employees totaling $29,467 from a population of 53 employees totaling $152,728. Identification as a repeat finding: No Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for resolution regarding this matter and implement proper controls over program payroll expenditures. Views of responsible officials: The district will check and code employees accurately by fund and/or redistributions, time certifications, etc. will be done according to procedure and requirements.

U. S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES - CFDA NUMBER 84.010 PASS-THROUGH NUMBER 5404 AUDIT PERIOD - YEAR ENDED JUNE 30, 2020 Criteria or specific requirement : The District is required to budget Title I 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: Title I School Improvement Grant expenditures for function 1140 (Regular Programs/Elementary-Secondary - High School) exceeded the budget amount by $5,762 more than the 10 percent variance allowed. Additionally, the budget information submitted to DESE using the Arkansas Public School Computer Network (APSCN) did not agree with the approved Title I and Title I School Improvement Grant budgets. A similar finding was reported in the previous audit. 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 Title I program resulting in actual expenditures exceeding budgeted amounts. Context: Comparison of budget expenditures to actual expenditures as reported on the annual financial report. Identification as a repeat finding: This was a repeat of Finding 2019-003 from the previous audit. 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: Monthly meetings tied to Title I budget, expenditures and amendments. This meeting will include the superintendent, district bookkeeper, federal programs coordinator, curriculum coordinator, and building leadership/representatives. The focus of the meetings will be to make sure that we are consistently looking at the available budget funds and ensure that the variance is met but not exceeded per funding source. We will examine specific budget exceeds reports and identify expenditures vs budget.

U. S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES - CFDA NUMBER 84.010 PASS-THROUGH NUMBER 5404 AUDIT PERIOD - YEAR ENDED JUNE 30, 2019 2019-003. Reporting Criteria or specific requirement : The District is required to budget Title I expenditures and submit such information to the Arkansas Department of Education (ADE). Actual expenditures may not exceed the budget amounts for specific categories by more than 10 percent without prior approval from the ADE and submission of budget amendments or adjustments. Condition: Title I School Improvement Grant expenditures for function 1591 (Title I School-wide Instruction) exceeded the budget amount by $1,127 more than the 10 percent variance allowed. Additionally, the budget information submitted to ADE utilizing the Arkansas Public School Computer Network (APSCN) did not agree with the approved Title I and Title I School Improvement Grant budgets. 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 ADE approval for the Title I program resulting in actual expenditures exceeding budgeted amounts. Context: Comparison of budget expenditures to actual expenditures as reported on the annual financial report. Recommendation: The District should implement procedures to ensure expenditures are properly monitored and budgets are amended as necessary, and consult with ADE for further guidance regarding this matter. Views of responsible officials: The Marvell-Elaine School District is implementing internal control and compliance protocols and working with the Arkansas Department of Education Fiscal Unit on a daily basis to better assure that we achieve a greater degree of reliable financial management. These internal control protocols include: To better manage the Federal Programs and funding, quarterly meetings are held with the ADE Federal Programs Unit, the MESD Federal Programs Coordinator and her clerk, and the Superintendent. Next steps, corrections and needs are addressed in these meetings with weekly follow up reports to address the interim work.

2019-004. Allowable Costs/Cost Principles 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 from federal funds. Such costs are to be necessary and reasonable for the performance of the federal award. Program expenditures must be incurred in accordance with the District?s Arkansas Comprehensive School Improvement Plan (ACSIP). Condition: The District?s ACSIP did not include Title I program payroll expenditures, including fringe benefits, for a curriculum specialist totaling $34,885 and Title I School Improvement Grant expenditures for reading novels totaling $8,226. Cause: Lack of internal controls and management oversight over program expenditures. Questioned costs: The amount of questioned costs was $43,111. Context: Examination of salaries, including fringe benefits, and supporting documentation for three employees (total salaries and fringe benefits of $140,693) from a total population of twenty-three employees (total salaries and fringe benefits of $293,171). Examination of supporting documentation for four non-payroll expenditures ($12,339) from a total population of thirty-five non-payroll expenditures ($67,088). Recommendation: The District should contact the Arkansas Department of Education for guidance and implement proper controls over program expenditures. Views of responsible officials: The Marvell-Elaine School District is implementing internal control and compliance protocols and working with the Arkansas Department of Education Fiscal Unit on a daily basis to better assure that we achieve a greater degree of reliable financial management. These internal control protocols include: Expenditure justification meetings are held with the Federal Programs Coordinator and the Superintendent on a weekly basis. Expenditures that are questionable are either tabled for additional detail, denied because it is not aligned to the School Improvement Plan, or redirected to another funding source.

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