Collegiate Edu-Nation

Finding 2024-001: Allowable costs and activities – material weakness in internal controls over compliance and compliance finding. Criteria: The Organization’s internal control procedures over compliance specify that all expenses be reviewed and approved prior to charging to the grant. Condition: During allowable costs and activities testing for the grant, 28 out of 40 expenses tested did not have documented approval. Cause: Prior to the implementation of Ramp, the Organization’s internal policy did not require separate documented approval for budgeted expenses before they were charged to the grant. Since all expenses tested were part of the TWC Robotics grant and aligned with the approved grant budget, purchases were processed without additional approval documentation. This practice resulted in a lack of formal approval records for these transactions, leading to the identified finding. Effect: The Organization’s approval of grant expenses were not fully documented in accordance with the internal control over compliance procedures. Questioned Costs: None Recommendation: Management should ensure amounts charged to the grant are formally approved before the request for reimbursement is submitted. Management’s Response: See corrective action plan.

Finding 2024-001: Allowable costs and activities – material weakness in internal controls over compliance and compliance finding. Management Response Finding: Lack of Documented Approval for Purchases. Corrective Action Taken: Effective July 1, 2024, CEN implemented Ramp, an expense management platform that ensures all purchases are documented and approved before processing. Ramp provides an automated and auditable approval workflow, ensuring compliance with federal grant requirements. Steps Implemented: • Centralized Purchasing System: All purchases are now made within Ramp using a Ramp credit card, ensuring complete oversight and control over spending. • Automated Approval Workflow: Each purchase requires approval within Ramp, and approvals are documented digitally, creating an auditable trail. • Receipt Verification: Every purchase must include a receipt, which the approver reviews before granting final approval. • Grant Compliance Review: Any charges that do not meet grant requirements are not charged to the grant and are instead assigned to an appropriate non-grant funding source. • Training & Compliance: All relevant staff members have been trained on Ramp’s approval and compliance procedures to ensure adherence to purchasing protocols. Responsible Party: Kendall Guynes, CFO Completion Date: July 1, 2024 (Fully Implemented)

Finding 2024-002: Allowable costs and activities – significant deficiency in internal controls over compliance. Criteria: The Organization’s internal control procedures over compliance specify that all expenses charged to the grant are supported by an itemized receipt. Condition: During allowable costs and activities testing for the grant, 1 out of 40 expenses tested did not have an itemized receipt. Cause: The expense in question was verbally confirmed as allowable; however, no formal documentation, such as an itemized receipt or written verification, was created or maintained. As a result, the expense should not have been charged to the grant in accordance with the Organization’s internal control procedures. Effect: The Organization’s documentation of grant expenses was not fully obtained in accordance with the internal control over compliance procedures. Questioned Costs: None.Recommendation: Management should ensure amounts charged to the grant adhere to all documentation requirements before the request for reimbursement is submitted. Management’s Response: See corrective action plan.

Finding 2024-002: Allowable costs and activities – significant deficiency in internal controls over compliance. Management Response Finding: Failure to Provide an Itemized Receipt for a Restaurant Purchase Corrective Action Taken: Effective July 1, 2024, CEN implemented Ramp, an expense management platform that ensures all purchases are documented with proper receipts before being charged to the grant. This solution directly addresses the issue of missing itemized receipts and ensures compliance with federal grant requirements. Steps Implemented: • Mandatory Receipt Submission: All purchases, including restaurant transactions, require an itemized receipt to be uploaded into Ramp before the expense can be approved. • Approval Before Grant Charging: An approver must review the itemized receipt to verify that no prohibited items were purchased before allowing the expense to be charged to the grant. • Grant Compliance Review: If an itemized receipt is not provided or contains unallowable expenses, the charge will not be allocated to the grant and must be covered by a non-grant funding source. • Training & Compliance: All employees who make purchases with grant funds have been trained on the requirement for itemized receipts and the consequences of non-compliance. Responsible Party: Kendall Guynes, CFO Completion Date: July 1, 2024 (Fully Implemented) Parties Responsible: Chief Executive Officer President Chief Financial Officer Business Manager The Corrective Action Plan is currently in place and was implemented on July 1, 2024.