LEAP SOCIAL ENTERPRISE INCNon-Profit

Finding No. 2023–001 - CASH MANAGEMENT Name of Federal Agency U.S. Department of Education Pass-through the Puerto Rico Department of Education Federal Programs Charter Schools Assistance Listing Numbers 84.282 Category Significant Deficiency Compliance / Internal control Compliance Requirements Cash Management Criteria According to the 2 CFR 200.305(b) For recipients and subrecipients other than States, payment methods must minimize the time elapsing between the transfer of funds from the Federal agency or the passthrough entity and the disbursement of funds by the recipient or subrecipient regardless of whether the payment is made by electronic funds transfer or by other means. According to the 2 CFR 200.305(b) (2)The recipient or subrecipient must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the recipient or subrecipient, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs. The recipient or subrecipient must make timely payments to contractors in accordance with the contract provisions. Condition During our audit procedures, we found the following instances on which the Institution did not disbursed funds in an expedite matter: Fund Sample Selected Instances Average of Days Late 84.282 11 Two (2) 10 to 15 days Cause The delay in disbursements responds to several situations: remote work, lack of banking or information from suppliers, multiplicity of tasks under the responsibility of the CFO, which affected the dates of sending the payments. Effect As a result of this condition, the U.S. Department of Education and /or Puerto Rico Department of Education may issue warnings and/or impose penalties to the Institution.-34- Questioned Cost None Recommendation The management of the Institution should reinforce its cash management procedures and internal controls to ensure the disbursement of funds in the required time frame. Views of Responsible Officials of the Auditee The management of the Institution agrees with this finding. Responsible Person Yusein Duarakov Business Administration

Finding No. 2023-002 – DATA COLLECTION FORM DUE DATES Name of Federal Agency U.S. Department of Education Pass-through the Puerto Rico Department of Education Federal Programs American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER) Charter Schools Assistance Listing Number 84.282 84.425U Category Significant Deficiency Compliance/Internal Control Compliance Requirements Reporting Criteria Uniform Guidance, Part 200.512 (1) established the audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor's report(s) or nine months after the end of the audit period (whichever is earlier). The cognizant agency for audit or oversight agency for audit (in the absence of a cognizant agency for audit) may authorize an extension when the nine-month timeframe would place an undue burden on the auditee. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Condition The Data Collection Form and Single Audit reporting package were not submitted within nine (9) months after the end of the audit period. Cause and Effect Information to complete the financial statements audit procedures was not available within the required period. Data collection form and single audit report were not submitted in a timely manner as required by the Uniform Guidance. A similar audit finding was reported during the prior audit (2022-004). Questioned Cost None Recommendation Data collection from and single audit package shall be submitted within the required due dates. Views of Responsible Officials The management of the Institution agrees with this finding. Responsible Person Yusein Duarakov Business Administration

Finding Number 2022-004 Federal programs: All Major programs Category: Internal control / Compliance Condition: Data Collection Form and Single Audit reporting package corresponding to year ended December 31, 2021, were not submitted within the established due date. The report was due by September 30, 2022. Criteria: 2 CFR section 200.512 (a)(1) establishes that the audit must be completed and the reporting required by paragraph (b) (1) of this section submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Unless restricted by Federal law or regulation, the auditee must make report copies available for public inspection. Auditees and auditors must ensure that their respective parts of the reporting package do not include protected personally identifiable information. Cause: Information required to timely complete the financial statements audit was not available. Effect: Data Collection Form and Single Audit reporting package were not submitted in a timely manner as required by the Uniform Guidance. Questioned Costs: None. Recommendation: Data Collection Form and Single Audit reporting package shall be submitted by the established due date. Management Response: The Entity issued the audited financial statements for the years ended December 31, 2022 and 2021 on April 18, 2024 and October 23, 2023, respectively. The Single Audit reporting packages corresponding to the years ended December 31, 2022 and 2021 will be submitted on or before February 28, 2025.