Mater Academy of Northern Nevada

U.S. Department of Education/Passed Through State of Nevada Public Charter School Authority Federal Assistance Listing Numbers 84.010 – Title I, 84.010A - Title I 1003(a) FY23 Title I, Part A – Award Date 7/1/22-9/30/23 FY23 Title I, Part A, Section 1003a – Award Date 7/1/22-9/30/23 FY23 Title I, Part A, APP-01953-J3J3-A1 – Award Date 7/1/22-9/30/23 Criteria – Management is responsible for internal controls over Activities Allowed or Unallowed and Allowable Costs/Cost Principles in accordance with the Uniform Guidance. Condition – Two expenditures tested did not have evidence of review and approval. One request for reimbursement of allowable costs submission tested did not have evidence of review and approval of the submission. Questioned Costs – None Context/Sampling – A non-statistical sample of 21 expenditures out of 137 expenditures was selected for testing. We also tested the corresponding request for reimbursement of allowable cost submission for each expenditure tested. Cause – The School did not have adequate internal controls to ensure review of costs charged to the program occurred and was documented. Effect or potential effect – Unallowable costs may be charged to the program and submitted for reimbursement and not detected by the School. Recommendation – We recommend the School document review and approval of all expenditures to ensure compliance with the Uniform Guidance. Views of responsible officials and planned corrective actions – A process was put in place in May 2023 to ensure that all principal approvals are documented in writing or electronic approval in the system which can be date stamped by the system. Payroll will not be run, nor grant reimbursement requests submitted, until proper approval is received.

U.S. Department of Education/Passed Through State of Nevada Public Charter School Authority Federal Assistance Listing Numbers 84.010 – Title I, 84.010A - Title I 1003(a) FY23 Title I, Part A – Award Date 7/1/22-9/30/23 FY23 Title I, Part A, Section 1003a – Award Date 7/1/22-9/30/23 FY23 Title I, Part A, APP-01953-J3J3-A1 – Award Date 7/1/22-9/30/23 Criteria – Management is responsible for internal controls over compliance with Level of Effort – Maintenance of Effort in accordance with the Uniform Guidance. Condition – The School incorrectly calculated Maintenance of Effort and there was no documentation of review by an individual independent of the preparation of the calculation. Questioned Costs – None Context/Sampling – Maintenance of Effort reporting is required to be filed annually. FORVIS tested the annual calculation performed during the fiscal year ended June 30, 2023. Cause – The School did not have adequate internal controls to ensure review of Maintenance of Effort reporting was performed and documented prior to submission. Maintenance of Effort was not calculated correctly due to the financial data used in the calculation being on a different basis of accounting and including incorrect financial statement line items. Effect or potential effect – Inaccurate data was provided to the grantor. Recommendation – We recommend the School create a standard template to prepare the Maintenance of Effort calculation indicating which specific financial statements and line items to include in the calculation to allow for consistent and accurate reporting in accordance with the compliance requirement and policies and procedures to ensure that the calculation and report are reviewed by someone knowledgeable of the requirements prior to submission. Views of responsible officials and planned corrective actions – Due to unexpected turnover, a secondary review was not performed to verify the preparation of the Maintenance of Effort reporting. To strengthen the oversight of financial management of the School, Academica Nevada, the School’s management company, filled all open positions and realigned staff responsibilities to reduce individual workloads and provide additional oversight and review. In addition, a financial controller has been added to ensure that secondary reviews occur on all required filings and reconciliations.

U.S. Department of Education/Passed Through Nevada Department of Education Federal Assistance Listing Number 84.425C and 84.425D – COVID-19 – Education Stabilization Fund Pass-Through Entity Identifying Number 22-748-44437 Award Date 12/29/21-9/30/23 Criteria – Management is responsible for internal controls over compliance with Reporting in accordance with the Uniform Guidance. Condition – The School did not report grant expenditures by the required categories to the Nevada Department of Education (NDE), there was no support maintained for the data that was submitted including FTEs, and there was no review of the report before it was submitted. Questioned Costs – None Context/Sampling – The NDE requires information to be reported by Local Education Agencies in order to complete the NDE’s annual ESSER Reporting. Cause – The School did not have adequate internal controls to ensure that the data reported to the NDE was accurate, that the form was completed correctly, and that there was no review of the report prior to submission. Effect or potential effect – Inaccurate data was provided to the grantor. Recommendation – We recommend the School put in place controls over reporting required by the School’s grants to ensure complete and accurate reporting in accordance with the compliance requirement. Views of responsible officials and planned corrective actions – Due to unexpected turnover, a secondary review was not performed to verify the preparation of the ESSER reporting. To strengthen the oversight of financial management of the School, Academica Nevada, the School’s management company, filled all open positions and realigned staff responsibilities to reduce individual workloads and provide additional oversight and review. In addition, a financial controller has been added to ensure that secondary reviews occur on all required filings and reconciliations.

U.S. Department of Education/Passed Through Nevada Department of Education and State of Nevada State Public Charter School Authority Federal Assistance Listing Numbers 84.425, 84.425C, 84.425D, and 84.425U – COVID-19 – Education Stabilization Fund CARES ESSER I (Formula) – APP-01808-L2K9-A1 – Award Date 3/13/20-9/30/22 CRRSA ESSER II – APP-01384-P9Y6-A1 – Award Date 1/15/21-9/30/23 ARP ESSER – Award Date 7/1/21-9/30/24 ARP ESSER Final One-Third Allocation – Award Date 7/1/22-9/30/24 Elementary and Secondary School Emergency Relief (ESSER) Fund - CARES Act (SBMH) Governor's Emergency Education Relief Fund (GEER) - (SBMH) Pass-Through Entity Identifying Number 22-748-44437 Award Date 12/29/21-9/30/23 Criteria – Management is responsible for internal controls over Activities Allowed or Unallowed and Allowable Costs/Cost Principles in accordance with the Uniform Guidance. Condition – Four expenditures tested did not have evidence of approval of review and approval. One request for reimbursement submission tested did not have evidence of review and approval of the submission. Questioned Costs – None Context/Sampling – A non-statistical sample of 40 expenditures out of 333 expenditures was selected for testing. We also tested the corresponding cost submission for each expenditure tested. Cause – The School did not have adequate internal controls to ensure review of costs charged to the program occurred and was documented. Effect or potential effect – Unallowable costs may be charged to the program and submitted for reimbursement and not detected by the School. Recommendation – We recommend the School document review and approval of all expenditures to ensure compliance with the Uniform Guidance. Views of responsible officials and planned corrective actions – A process was put in place in May 2023 to ensure all principal approvals are documented in writing or electronic approval in the system, which can be date stamped by the system. Payroll will not be run, nor grants submitted, until proper approval is received.

2022-011: U.S. Department of Education Passed through the State of Nevada Public Charter School Authority Title I Grants to Local Educational Agencies, 84.010 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 84.010 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control that provides reasonable assurance that the non-federal entity is managing the federal award in compliance federal statutes, regulations, and the terms and conditions of the Federal award. A key component of effective internal control is the segregation of duties through a review and approval process. Condition: Costs charged to the program did not have evidence of review by an individual independent of the preparation of the allocation of the cost to the program. Cause: The School did not have adequate internal controls to ensure review of costs charged to the program occurred and was documented. Effect: Unallowable costs may be charged to the program and not detected by the School. Questioned Costs: None noted Context/Sampling: A non-statistical sample of five reimbursement requests out of a population of 17 was selected for testing. Those five reimbursement requests included 52 transactions out of a population of 138. There was no evidence of review on any of the transactions tested. The 52 transactions totaled $216,914 out of the total aggregate expenditure population of $359,059. Repeat Finding from Prior Year: No Recommendation: We recommend the School enhance internal controls to ensure review of costs charged to the program occurs and is documented. Views of Responsible Officials: Management agrees with this finding.

2022-012: U.S. Department of Education Passed through the State of Nevada Public Charter School Authority Title I Grants to Local Educational Agencies, 84.010 Level of Effort ? Maintenance of Effort Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 84.010 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control that provides reasonable assurance that the non-federal entity is managing the federal award in compliance federal statutes, regulations, and the terms and conditions of the Federal award. A key component of effective internal control is the segregation of duties through a review and approval process. Condition: The Maintenance of Effort (MOE) calculation submitted to the grantor did not have evidence of review by an individual independent of the preparation of the calculation. Cause: The School did not have adequate internal controls to ensure review of the maintenance of effort occurred or was documented prior to submitting it to the grantor. Effect: Maintenance of Effort information provided to the grantor may not be accurate. Questioned Costs: None noted Context/Sampling: No sampling was performed; the maintenance of effort calculation was tested in its entirety. Repeat Finding from Prior Year: No Recommendation: We recommend the School enhance internal controls to ensure review of the maintenance of effort occurs and is documented. Views of Responsible Officials: Management agrees with this finding.

2022-013: U.S. Department of Education Passed through the State of Nevada Public Charter School Authority Title I Grants to Local Educational Agencies, 84.010 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 84.010 on the Schedule of Expenditures of Federal Awards. Criteria: The OMB Compliance Supplement requires local educational agencies (LEAs) to submit per pupil expenditure data to the state educational agency (SEA). The SEA determines the format of the data submissions. The School is required to submit per pupil expenditure data via the NRS 387.303 Report. Condition: The information reported to the SEA did not agree to the underlying records and there was no evidence of review and approval. Cause: The School did not have adequate internal controls to ensure review of the NRS 387.303 Report and that a reconciliation was maintained. Effect: Amounts reported to the SEA were inaccurate. Questioned Costs: None noted Context/Sampling: No sampling was performed; the annual report submitted for the fiscal year ended June 30, 2021 (submitted in fiscal year 2022) was tested in its entirety. The following unreconciled variances were noted, in the aggregate: Total Reported Total Supported by Records Total Weighted Enrollment 439.10 437.36 Total Actual FTE 56.75 50 Total Major Fund Revenue $4,463,145 $4,551,727 Total Salaries $1,950,326 $1,908,607 Total Benefits $822,343 $706,412 Total Other Expenditures $1,567,180 $1,667,765 Repeat Finding from Prior Year: No Recommendation: We recommend the School enhance internal controls to ensure review of the NRS 387.303 Report and that a reconciliation is maintained. Views of Responsible Officials: Management agrees with this finding.

2022-014: U.S. Department of Education Passed through the State of Nevada Public Charter School Authority Title I Grants to Local Educational Agencies, 84.010 Other Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards included on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the School to prepare a Schedule of Expenditures of Federal Awards (SEFA). Condition: Amounts were originally reported incorrectly on the SEFA. Cause: The School did not have adequate internal controls to provide for the review of journal entries that allocate expenses to federal programs or the SEFA to ensure total federal expenditures were appropriately reported on the SEFA. Effect: Prior to correction, total expenditures reported on the SEFA were overstated by $108,053. Questioned Costs: None noted Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Year: Yes ? prior year finding 2021-002. Recommendation: We recommend the School enhance internal controls to provide for the review of journal entries that allocate expenses to federal programs and the SEFA to ensure total federal expenditures are appropriately reported on the SEFA. Views of Responsible Officials: Management agrees with this finding.

Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The School should have a process in place to perform a review of the SEFA, to include evidence of the resolution of variances, as well as a process to document the overall review and approval approval to ensure proper presentation, completeness, and accuracy of the SEFA. Condition: During the course of the audit, the engagement team identified multiple instances where the SEFA was not accurately prepared and presented. The engagement team identified this as a pervasive deficiency impacting all schools, as the SEFA was prepared by the same management personnel. Questioned Costs: None noted. Cause: The entity does not have an appropriate process in place to review the SEFA, to include retaining evidence of the resolution of variances, as well as documentation of the overall review and approval. Effect or Potential Effect: Potential misstatement could occur if expenditure amounts are not accurately presented on the SEFA. Recommendation: The School should develop a consistent process to review the SEFA. Issues identified during the course of the review should be investigated and resolved in a timely manner. The School should design a process to retain documentation of the review process and the resolution of any issues identified. Views of Responsible Officials: The School concurs with the auditor?s findings and recommendations. The planned corrective actions are present in the School?s Corrective Action Plan attached as Appendix A to the Single Audit Report.