Natrona County School District No. 1Local Government

Criteria 2 C.F.R Part 200.430, Standards for Documentation of Personnel Expenses, requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated Condition The District’s system of internal control includes processes to assign employees to specific grants and to conduct a quarterly review and approval of time charged to the grant by individuals knowledgeable about the employees’ assigned duties. While the system includes a review of employees charged to the grant, it does not include a mechanism to maintain records that document the actual work performed by employees whose salaries and wages are allocated among multiple federal awards or other funding sources. In addition, the system does not include an after-the-fact review of actual time incurred compared to budgeted estimates, or procedures to make necessary adjustments based on that comparison. Cause The District management believed that the quarterly review and reconciliation of the wages was sufficient to meet the requirements of the Uniform Guidance. Effect or Potential Effect Without records that accurately reflect the actual work performed and an after-the-fact review of time charged to federal awards, there is an increased risk that salary and wage costs may be charged to federal programs based on budgeted or estimated amounts rather than actual time worked. This could result in a potential misallocation of costs among funding sources, and inaccurate reporting of personnel expenses charged to federal awards. Questioned Costs Unable to determine due to a lack of supporting documentation for the allocation of salaries and wages among multiple federal awards and other funding sources. The District was unable to provide records demonstrating the actual time worked on federal program activities for employees whose compensation was charged, in part, to federal awards. The District had employees with wages charged to the grant under various assignments, including individuals who performed duties benefiting multiple programs or activities. Because adequate documentation was not available to support the distribution of time and effort, the amount of potential questioned costs could not be determined. Context Special Education Cluster (IDEA) Total salaries, wages and benefits charged to the Special Education Grants to States grant were approximately $2.8 million. Approximately 30% of the amounts charged to the grant were for employees performing duties benefiting multiple funding sources. While supporting documentation was not provided, employee assignments were consistent throughout the year based on daily schedules, staffing levels were stable, and budget allocations appeared reasonable in relation to program activities. These factors reduce the likelihood that a significant portion of the wages charged to the grants were unallowable. Supporting Effective Instruction State Grants Total salaries, wages and benefits charged to the Supporting Effective Instruction State Grants grant were approximately $1.8 million. Approximately 72% of the amounts charged to the grant were for employees performing duties benefiting multiple funding sources. While supporting documentation was not provided, employee assignments remained consistent throughout the year based on daily schedules, staffing levels were stable, and budget allocations appeared reasonable in relation to program activities. These factors reduce the likelihood that a significant portion of the wages charged to the grants were unallowable. Identification as a Repeat Finding Not a repeat finding. Recommendation The District should enhance its internal control procedures over payroll costs charged to federal awards to ensure compliance. The District should implement a process to document the actual work performed by employees whose salaries are allocated to multiple federal or nonfederal programs. This may include requiring periodic certifications, personnel activity reports, or equivalent documentation that reflects actual time worked. In addition, the District should establish an after-the-fact review process to compare actual time incurred to budgeted estimates and make necessary adjustments to ensure that payroll charges are based on actual effort rather than budgeted amounts. Views of Responsible Officials The District agrees with the finding. The District believed that employee approval of their timecard, its quarterly wage reconciliation process, combined with stable staffing patterns and consistent program assignments, met the requirements of 2 C.F.R. §200.430. Upon review of the auditor’s finding, the District recognizes that additional documentation and processes are required to demonstrate compliance with federal standards for personnel expense documentation. The District is committed to implementing improved controls, strengthening documentation processes, and ensuring full compliance going forward.

Criteria Under 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, recipients of federal funds are required to maintain effective internal controls over the financial management and reporting of federal awards. Specifically, the District is required to ensure that reports submitted are accurate, complete, and timely. For this grant the District is required to submit data to the Wyoming Department of Education (WDE) for the State’s report. (2 CFR § 200.303). Condition The total expenditures reported to the WDE were correct, however the amounts by expenditure category and object code differed between the accounting system general ledger classification and the reports submitted. Cause The District’s system for summarizing the data from the general ledger and reporting it to WDE resulted in inaccurate summarizations. The District’s internal review and approval process for reports was not consistently followed resulting in missed errors. Effect or Potential Effect The District's reports were inaccurate and did not reflect the true expenditures by category and object code. Questioned Costs None Context The District was required to submit one financial report for ESSER I, ESSER II and ESSER III expenditures during the fiscal year. Each of the reports contained misclassified expenditures by category and object code. Identification as a Repeat Finding Not a repeat finding Recommendation We recommend that the District provide targeted training for personnel involved in the preparation and submission of reports to ensure they understand the specific compliance and reporting requirements. The District should additionally consider implementing a more rigorous review and reconciliation process for all financial reports prior to submission to ensure that any discrepancies between financial records and reports are resolved before the reports are finalized. Views of Responsible Officials The District will adopt a general ledger account structure that is directly correlated to the Wyoming Department of Education’s Accounting Manual.

2022-001 Significant Deficiency in Internal Control U. S. Department of Education Passed through the State of Wyoming Department of Education 84.027 ? Title VIB Special Education Cluster Pass Through Entity Identifying Number: SPEDSUBR21; SPEDSUBR22 Grant year: 2020 and 2021 Criteria or specific requirement 2 C.F.R Part 200.430, Standards for Documentation of Personnel Expenses, requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition The District has a system of internal control which provides assurance that the charge are accurate, allowable and properly allocated. To meet the requirements, the District employees complete a personnel activity report or submit a semi-annual certification. The personal activity reports and semi-annual certifications were misplaced or not retained for a number of employees. Cause The District believed that the that the records were maintained on a shared drive, however, the documents were unable to be located. Effect or potential effect The District is unable to support with either a personal activity report or semi-annual certification the charges to the grant for salaries and wages. However, there are other processes in place that support the employee salary and wages being accurate, allowable and properly allocated. The District has processes in place to assign the employee to the grant and approve time charged to the grant by individuals that are knowledgeable about the employee?s assigned duties. Questioned Costs None Context - Forty employees were selected for testing. The semi-annual certification or personal activity report for 30 of the employees were unable to be located. Identification as a Repeat Finding This is not a repeat finding. Recommendation The District should revisit the process for obtaining personal activity reports and semi-annual certifications to ensure that the documentation is obtained and maintained. Views of Responsible Officials Please refer to the District?s corrective action plan.

2021-001 Material Weakness in Internal Control U. S. Department of Education Passed through the State of Wyoming Department of Education 84.027 & 84.173 ? Title VIB Special Education Cluster Pass Through Entity Identifying Number: 201301SPEDSUBR1900, 18130118T6100, 19130119T6100, 201301PSCHSUBR1900, 211301SPEDSUBR2000, 1813017T6900, and 19130119T6900 Grant year: 2017, 2018, 2019, 2020, and 2021 Criteria or specific requirement Suspension and Debarment ? Section 180.995 of the Code of Federal Regulations (CFR) indicates that when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. Condition The District was lacking a process to determine if an entity was suspended or debarred or otherwise excluded from participating in the transaction before entering into a transaction with that entity. Cause Due to turnover in the District accounts payable position, the procedures and processes that had been in place previously, were not communicated to the successor employee, therefore resulting in no search to determine if a vendor had been suspended or debarred. Effect or potential effect The District could potentially enter into a transaction with an entity that was suspended or debarred or otherwise excluded from participating in the transaction. Questioned Costs None Context The District could be entering into covered transactions with entities without verifying if the entity is suspended or debarred or otherwise excluded from participating in the transaction. Identification as a Repeat Finding This is not a repeat finding. Recommendation The District should verify that an entity is not suspended or debarred or otherwise excluded from participating in the transaction by checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) before entering into a covered transaction or paying the entity. Views of Responsible Officials Please refer to the District?s corrective action plan.

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