MATCHBOOK LEARNING SCHOOLS OF INDIANA, INC.Non-Profit

FINDING 2025-001 MAINTENANCE OF EFFORT SIGNIFICANT DEFICIENCY Federal Program: Title I, Part A (84.010) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2024-004. Criteria 2 CFR part 200, Appendix XI, Compliance Supplement 2020, Section 4-84.000-13, states “An LEA may receive funds under an applicable program only if the SEA finds that the combined fiscal effort per student or the aggregate expenditures of the LEA from state and local funds for free public education for the preceding year was not less than 90 percent of the combined fiscal effort or aggregate expenditures for the second preceding year, unless specifically waved.” Condition The Indiana Department of Education completes the maintenance of effort calculation using the Form 9 report issued by the School, which is a cash-basis report. Review of the School’s Form 9 found the report to be unreliable. Expenditures per the Form 9 totaled approximately $46,050,000 for the period of July 1, 2024 to June 30, 2025. Cash basis expenses per the School’s financial records totaled approximately $28,950,000. Cause The School did not report expenses in line with the guidelines set by the Indiana Department of Education. Effect Maintenance of effort calculations prepared by the Indiana Department of Education could be impacted by incorrect reporting of expense transactions. Recommendation We recommend the School develop internal controls to ensure expenses are properly reported on the Form 9 report in line with guidelines. Views of Responsible Officials The School’s Corrective Action Plan is included on pages 27 to 28.

FIFINDING 2024-004 MAINTENANCE OF EFFORT SIGNIFICANT DEFICIENCY Federal Program: Title I, Part A (84.010) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-002. Criteria 2 CFR part 200, Appendix XI, Compliance Supplement 2020, Section 4-84.000-13, states “An LEA may receive funds under an applicable program only if the SEA finds that the combined fiscal effort per student or the aggregate expenditures of the LEA from state and local funds for free public education for the preceding year was not less than 90 percent of the combined fiscal effort or aggregate expenditures for the second preceding year, unless specifically waved.” Condition The Indiana Department of Education completes the maintenance of effort calculation using the Form 9 report issued by the School, which is a cash-basis report. Review of the School’s Form 9 found the report to be unreliable. Expenditures per the Form 9 totaled approximately $12,565,000 for the period of July 1, 2023 to June 30, 2024. Cash basis expenses per the School’s financial records totaled approximately $10,430,000. Cause The School did not report expenses in line with the guidelines set by the Indiana Department of Education. Effect Maintenance of effort calculations prepared by the Indiana Department of Education could be impacted by incorrect reporting of expense transactions. Recommendation We recommend the School develop internal controls to ensure expenses are properly reported on the Form 9 report in line with guidelines. Views of Responsible Officials The School’s Corrective Action Plan is included on page 28 and 30.

FINDING 2023-002 MAINTENANCE OF EFFORT (REPEAT FINDING) SIGNIFICANT DEFICIENCY Federal Program: Title I, Part A: Grants to Local Educational Agencies Assistance Listing Number: 84.010 Condition The Indiana Department of Education completes the maintenance of effort calculation using the Form 9 report issued by the School, which is a cash-basis report. Review of the School’s Form 9 found the report to be unreliable. Expenditures per the Form 9 totaled approximately $9,078,000 for the period of July 1, 2022 to June 30, 2023. Cash basis expenses per the School’s financial records totaled approximately $9,009,000. Criteria 2 CFR part 200, Appendix XI, Compliance Supplement 2020, Section 4-84.000-13, states “An LEA may receive funds under an applicable program only if the SEA finds that the combined fiscal effort per student or the aggregate expenditures of the LEA from state and local funds for free public education for the preceding year was not less than 90 percent of the combined fiscal effort or aggregate expenditures for the second preceding year, unless specifically waved.” Cause The School did not report expenses in line with the guidelines set by the Indiana Department of Education. Effect Maintenance of effort calculations prepared by the Indiana Department of Education could be impacted by incorrect reporting of expense transactions. Recommendation We recommend the School develop internal controls to ensure expenses are properly reported on the Form 9 report in line with guidelines. Views of Responsible Officials and Planned Corrective Actions The School’s Corrective Action Plan is included on page 24.

FINDING 2022-001 REPORTING SIGNIFICANT DEFICIENCY Federal Program: Education Stabilization Fund Assistance Listing Number: 84.425D Condition The United States Department of Education required the submission in May 2022 of a report covering the period of October 1, 2020 to June 30, 2021 outlining the various uses of Elementary and Secondary School Emergency Relief Funds. The School was unable to provide support for how the amounts submitted in this report were calculated. Totals reported for expenses were not in line with totals expended during the period. Criteria 2 CFR part 200, Appendix XI, Compliance Supplement, Section 3-L-1, states ?Non-federal entities may be required to submit performance reports at least annually but not more frequently than quarterly, except in unusual circumstances, using a form or format authorized by OMB (2 CFR section 200.329). They also may be required to submit special reports as required by the terms and conditions of the federal award.? Cause The School did not report activity related to the use of Elementary and Secondary School Emergency Relief Funds in line with actual activity. The School did not have controls in place to ensure accurate reporting. Effect Information on the use of funds from the Education Stabilization Fund were not accurately presented. Recommendation We recommend the School develop internal controls to ensure accurate reporting in line with guidelines. Views of Responsible Officials and Planned Corrective Actions The School?s Corrective Action Plan is included on pages 23 and 24.

FINDING 2022-002 MAINTENANCE OF EFFORT (REPEAT FINDING) SIGNIFICANT DEFICIENCY Federal Program: Title I, Part A: Grants to Local Educational Agencies Assistance Listing Number: 84.010 Condition The Indiana Department of Education completes the maintenance of effort calculation using the Form 9 report issued by the School, which is a cash-basis report. Review of the School?s Form 9 found the report to be unreliable. Expenditures per the Form 9 totaled approximately $8,641,000 for the period of July 1, 2021 to June 30, 2022. Cash basis expenses per the School?s financial records totaled approximately $8,821,000. Criteria 2 CFR part 200, Appendix XI, Compliance Supplement 2020, Section 4-84.000-13, states ?An LEA may receive funds under an applicable program only if the SEA finds that the combined fiscal effort per student or the aggregate expenditures of the LEA from state and local funds for free public education for the preceding year was not less than 90 percent of the combined fiscal effort or aggregate expenditures for the second preceding year, unless specifically waved.? Cause The School did not report expenses in line with the guidelines set by the Indiana Department of Education. Effect Maintenance of effort calculations prepared by the Indiana Department of Education could be impacted by incorrect reporting of expense transactions. Recommendation We recommend the School develop internal controls to ensure expenses are properly reported on the Form 9 report in line with guidelines. Views of Responsible Officials and Planned Corrective Actions The School?s Corrective Action Plan is included on pages 23 and 24.

FINDING 2021-002 MAINTENANCE OF EFFORT (REPEAT FINDING) SIGNIFICANT DEFICIENCY Federal Program: Title I, Part A: Grants to Local Educational Agencies Assistance Listing Number: 84.010 Condition The Indiana Department of Education completes the maintenance of effort calculation using the Form 9 report issued by Matchbook Learning Schools of Indiana, Inc. (the ?School?), which is a cash-basis report. Review of the School?s Form 9 found the report to be unreliable. Expenditures per the Form 9 totaled approximately $5,939,000 for the period of July 1, 2020 to June 30, 2021. Cash basis expenses per the School?s financial records totaled approximately $6,703,000. Criteria 2 CFR part 200, Appendix XI, Compliance Supplement 2020, Section 4-84.000-13, states ?An LEA may receive funds under an applicable program only if the SEA finds that the combined fiscal effort per student or the aggregate expenditures of the LEA from state and local funds for free public education for the preceding year was not less than 90 percent of the combined fiscal effort or aggregate expenditures for the second preceding year, unless specifically waved.? Cause The School did not report expenses in line with the guidelines set by the Indiana Department of Education. Effect Maintenance of effort calculations prepared by the Indiana Department of Education could be impacted by incorrect reporting of expense transactions. Recommendation We recommend the School develop internal controls to ensure expenses are properly reported on the Form 9 report in line with guidelines. Views of Responsible Officials and Planned Corrective Actions The School?s Corrective Action Plan is included on page 22.

FINDING 2020-002 MAINTENANCE OF EFFORT SIGNIFICANT DEFICIENCY Federal Program: Title I CFDA Number: 84.010 Condition The Indiana Department of Education completes the maintenance of effort calculation using the Form 9 report issued by Matchbook Learning Schools of Indiana, Inc., which is a cash-basis report. Review of Matchbook Learning Schools of Indiana, Inc.?s Form 9 found the report to be unreliable. Expenditures per the Form 9 totaled approximately $3,993,000 for the period of July 1, 2019 to June 30, 2020. Cash basis expenses per Matchbook Learning Schools of Indiana, Inc.?s financial records totaled approximately $5,828,000. Criteria 2 CFR part 200, Appendix XI, Compliance Supplement 2020, Section 4-84.000-13, states ?An LEA may receive funds under an applicable program only if the SEA finds that the combined fiscal effort per student or the aggregate expenditures of the LEA from state and local funds for free public education for the preceding year was not less than 90 percent of the combined fiscal effort or aggregate expenditures for the second preceding year, unless specifically waved?. Cause Matchbook Learning Schools of Indiana, Inc. was not reporting expenses in line with the guidelines set by the Indiana Department of Education. Effect Maintenance of effort calculations prepared by the Indiana Department of Education could be impacted by incorrect reporting of expense transactions. Recommendation We recommend Matchbook Learning Schools of Indiana, Inc. develop internal controls to ensure expenses are properly reported on the Form 9 report in line with guidelines. Views of Responsible Officials and Planned Corrective Actions Matchbook Learning Schools of Indiana, Inc.?s Corrective Action Plan is included on pages 22 and 23.

Criteria Each eligible applicant may use these funds in accordance with its approved application to plan and implement a charter school, or to disseminate information about the charter school and successful practices in charter schools (20 USC 7221c(f)(2)). Per the Indiana Department of Education CSP Quality Counts Innovation Grant Application, Part 3, item 8, the ?CSP Quality Counts Innovation Grant funds will be used only to supplement and not supplant state and local funds a school would otherwise receive. A Request for Amendment to CSP Quality Counts Innovation Grant Application will be submitted under these circumstances: 1) a 10% funding change in a budget category; and/or 2) a change in the scope of activities within a category?. Condition Matchbook Learning Schools of Indiana, Inc. (the ?School?) overspent funds in certain budget categories by greater than 10% without requesting an amendment to the approved grant application budget. Cause The School exceeded its supplies budget category and began to claim supply purchases under the property and equipment budget category. Effect The School expended $16,875 more for supplies and $19,925 more for contractual expenses than what was approved in the grant application budget. Recommendation We recommend the School develop internal controls governing the allocation of expenditures to grant budgets. These controls should specifically address ensuring that invoices are in line with the submitted grant application or applying for the appropriate amendments from the Indiana Department of Education. The School should also contact the Indiana Department of Education to communicate the error noted herein and discuss options to remedy the error. Questioned Costs $36,800

Criteria Per 2 CFR part 200, Appendix XI, Compliance Supplement, section 3.1-I-1, ?Institutions of higher education, hospitals, and other non-profit organizations will use procurement procedures that conform to applicable Federal law and regulations and standards identified in OMB Circular A-110 (2 CFR part 215). Their subrecipients will use procurement procedures that conform to applicable Federal law and regulations and standards identified in OMB Circular A-110 (2 CFR part 215) or the A-102 common rule, as applicable.? Condition Matchbook Learning Schools of Indiana, Inc.?s (the ?School?) procurement policy is not in line with OMB Circular A-110 (2 CFR part 215) as it does not contain procedures for when sealed bids are required. Federal guidelines require a sealed bid for any purchases exceeding $150,000. The School?s policies also omit procedures necessary to confirm if a vendor is suspended or debarred. Additionally, no documentation was retained to confirm the School was properly applying its procurement policy. Cause The School?s policy does not meet federal requirement and the School did not retain documentation that shows its procurements were made in accordance with OMB Circular A-110 (2 CFR part 215). Effect We were unable to test the School?s application of the procurement policies. Recommendation We recommend the School update its procurement policy to comply with OMB Circular A-110 (2 CFR part 215). We also recommend the School implement controls to document the use of its procurement policies. These controls should specifically address the School?s internal processes of evaluating vendors by purchase threshold.