GRAVETTE SCHOOL DISTRICTLocal Government

U. S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I GRANTS TO LOCAL EDUCATION AGENCIES - AL NUMBER 84.010A AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 PASS-THROUGH NUMBER 0404 2023-001 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 funds. Such costs are to be necessary and reasonable for the performance of the federal award. Condition: During our test of payroll expenditures, we identified $9,624 in salary expenditures paid from the Title I program for a Non-Title I certified teaching position. During the school year, the employee was reassigned from a Title I paraprofessional position to a Non-Title I position, and the District continued to pay the employee from the Title I program. Also, a contract was not prepared for the employee's position. Cause: Lack of internal controls and management oversight over program expenditures. Effect: Unallowable costs of $9,624 (gross salary) and $3,607 (fringe benefits) were paid from the Title I program. Questioned costs: The amount of questioned cost was $13,231. Context: An examination of Title I expenditures for 1 employee ($25,698) from a population of 10 employees ($361,978). Our sample was statistically valid. Identification as a repeat finding: No Recommendation: The District should contact the Arkansas Department of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The District has instituted an internal control that requires the preparation, review and retention of documentation as evidence that coding changes have not only been made but also made in a timely manner. The District will ensure that a contract is executed for every full-time employee included in the human resources module in eFinance by reconciling employee and contract counts.

U. S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS OF EDUCATION COVID-19 - ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425D PASS-THROUGH NUMBER 0404 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-002 Allowable Costs/Costs 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 funds. Such costs are to be necessary and reasonable for the performance of the federal award. Conditions: In our test of disbursements, we identified unallowable costs totaling $4,458 for football kicking lessons ($2,250) and student t-shirts to be worn at sporting events ($2,208) were paid from Education Stabilization Fund. Cause: Lack of internal controls and management oversight over program expenditures. Effect or potential effect: Unallowable costs of $4,458 were paid from the COVID-19 - Education Stabilization Fund. Questioned costs: The amount of questioned cost was $4,458. Context: A test of 6 nonpayroll disbursements from a population of 48. Our sample was statistically valid. 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 District notes that these expenditures were coded using ESSER program code 166. The District will contact DESE for guidance with respect to these expenditures.

MATERIAL WEAKNESS U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425D PASS-THROUGH NUMBER 0404 AUDIT PERIOD - YEAR ENDED JUNE 30, 2021 2021-001. 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 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 be adequately documented. Condition: During our examination of expenditures, we identified a duplicate reclassifying journal entry, resulting in unallowable costs totaling $38,322 that were paid from the COVID-19-Education Stabilization Funds. Cause: Lack of internal controls and management oversight over program expenditures. Effect or potential effect: Unallowable costs of $38,322 were paid from COVID-19-Education Stabilization Fund. Questioned costs: The amount of questioned costs was $38,322. Context: An examination of 2 journal entries totaling $94,269 from a population of 7 journal entries totaling $141,325. 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 District notes that the statutory window with respect to expenditures for the fund in question remains open, and that the funds will be utilized/expended in the subsequent fiscal year with the expectation that there will be no loss of funding. The District will follow legislative audit?s recommendation to contact the state to determine the best course of action with respect to the duplicate entry.

MATERIAL WEAKNESS U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425D PASS-THROUGH NUMBER 0404 AUDIT PERIOD - YEAR ENDED JUNE 30, 2021 2021-002. Allowable Costs/Cost Principles Criteria or specific requirement: Purchases of equipment and other capital expenditures require the prior written approval of the Federal awarding agency or pass-through entity, as specified in OMB 2 CFR section 200.439. Condition: During our examination of expenditures, we identified a facilities improvement purchase and five equipment purchases in which the District did not obtain prior written approval. These purchases had a total cost of $74,238. Cause: Lack of internal controls and management oversight over program expenditures. Effect or potential effect: Unallowable costs of $74,238 were paid from COVID-19-Education Stabilization Fund. Questioned costs: The amount of questioned costs was $74,238. Context: As a result of an examination of 3 checks (totaling $22,018) from a population of 28 checks (totaling $241,351), it was determined that purchases of capital improvements and equipment did not contain evidence of prior written approval from the pass-through agency; as a result we identified 6 unauthorized purchases totaling $74,238. 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 District notes that ESSER-related compliance checks have been primarily driven by the state. No formal mechanism was in place to seek purchases that required approval until the release of form by the state in May of 2021. Nevertheless, the District will communicate these requirements to purchasing staff and ensure that approval has been obtained in advance for applicable purchases.

MATERIAL WEAKNESSES U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425D PASS-THROUGH NUMBER 0404 AUDIT PERIOD - YEAR ENDED JUNE 30, 2021 2021-003. Equipment and Real Property Management Criteria or specific requirement: Property records should be maintained for equipment acquired with federal awards as specified in OMB 2 CFR section 200.313. Condition: A test of disbursements revealed 25 equipment items purchased with a cost greater than $1,000 each were not recorded in the District's equipment subsidiary ledger. The total cost of the equipment was $54,327. Cause: Lack of internal controls over the equipment subsidiary ledger. Effect or potential effect: The District's equipment subsidiary records were not accurate. Context: As a result of an examination of 10 percent of equipment purchases, it was determined that equipment purchases greater than $1,000 were not always properly added to the equipment subsidiary ledger; as a result, we identified 25 pieces of equipment totaling $54,327. Recommendation: Proper records should be maintained for equipment acquired with federal awards. Views of responsible officials: The District notes that the year under audit included unusually large volume of outlays for capital expenditures. Nevertheless, the District will follow the audit team?s recommendations and review procedures in this area to ensure that the classification of expenditures as capital is complete.