URBAN ACT ACADEMY, INC.Non-Profit

FINDING 2020-001 RECORDS RETENTION SIGNIFICANT DEFICIENCY Federal Program: Title I CFDA Number: 84.010 Condition The School was unable to provide documentation to support enrollment, transfers out of the School, and poverty-level data for some students selected for testing from the October 1, 2018 Real Time Data report submitted to the State of Indiana. This report is used as part of the application for Title I funds. Data for enrollment and poverty-level are used to assess eligibility of students for Title I funds. Data on transfers provides information on students removed from the regularly adjusted cohort. Criteria 2 CFR part 200.334 requires that ?Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient.? Cause The School did not properly maintain documentation. Effect Compliance with eligibility and special tests and provisions requirements from the Compliance Supplement could not be verified. Recommendation We recommend the School develop internal controls requiring the maintenance of documentation used in preparation of the Real Time Data reports. Views of Responsible Officials The School?s Corrective Action Plan is included on page 21.

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 the School, which is a cash-basis report. The School included depreciation expense, which is a non-cash expense, on this report. 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 waived?. Cause The School did not properly exclude non-cash transactions from the trial balance accounts from reporting on the Form 9. 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 non-cash expenses are excluded from the Form 9 report. Views of Responsible Officials The School?s Corrective Action Plan is included on page 21.