Cheney School District No. 360Local Government

SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Cheney School District No. 360 September 1, 2024 through August 31, 2025 2025-001 The District did not have adequate internal controls and did not comply with federal Title I assessment system security and eligibility requirements. Assistance Listing Number and Title: 84.010, Title I Grants to Local Educational Agencies Federal Grantor Name: U.S. Department of Education Federal Award/Contract Number: N/A Pass-through Entity Name: Office of the Superintendent of Public Instruction (OSPI) Pass-through Award/Contract Number: AD-9221, AD-10006, AD-10146 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The objective of the Title I program is to improve the teaching and learning of children who are at risk of not meeting state academic standards and live in areas with high concentrations of children from low-income families. During the 2024-25 school year, the District spent $1,579,285 in Title I program funds. Federal regulations require recipients to establish, document and maintain effective internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Assessment system security States, in consultation with school districts, must establish and maintain an assessment system that is valid, reliable and consistent with relevant professional and technical standards. States must have formal, well-documented policies and procedures to maintain test security and ensure districts implement them for all standardized tests. The Office of the Superintendent of Public Instruction (OSPI) provides templates for all districts to document their Test Security and Building Plans for each assessment they administer. OSPI also provides detailed guidance and manuals on test security. Eligibility Title I requires participating districts to allocate more funds to schools with higher poverty percentages. Districts must annually rank schools from highest to lowest poverty concentrations based on the total number of students from low-income families attending the school or residing in the area. Schools with the highest poverty concentrations must be allocated more Title I funding based on per-pupil expenditure. The rankings are included in the Title I application, and districts must maintain documentation supporting their rankings. Additionally, districts must serve schools with poverty rates more than 75% before serving any schools with poverty rates less than 75% or provide comparable supplemental funds from other state or local sources that are spent on programs that meet the intent and purpose of Title I. Funds expended from such other sources must equal or exceed the amount that would be provided under Title I. Description of Condition Assessment system security The District’s internal controls were inadequate for ensuring compliance with assessment system security requirements. For each school building the District prepares separate Test Security and Building Plans for the Washington Comprehensive Assessments Program standardized tests and for the fall and spring World-Class Instructional Design and Assessment (WIDA) Screener. We reviewed five school buildings and found the District did not prepare five out of 15 Test Security and Building Plans, as OSPI requires. Eligibility The District’s internal controls were inadequate for ensuring compliance with eligibility requirements. Specifically, the District incorrectly ranked and allocated Title I funding to schools within the same grade span based on the highest low-income meal count rather than the highest poverty concentration, as required. Additionally, the District’s internal controls were ineffective for ensuring it allocated Title I funds, or comparable supplemental funds, to two schools with poverty rates more than 75% as federal regulations and OSPI require. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. Cause of Condition Assessment system security The District experienced a transition in the assessment staff responsible for preparing the Test Security and Building Plans. District staff are aware of the requirement to have written Test Security and Building Plans for each assessment but overlooked preparing them for the fall WIDA Screener performed at each elementary school. Eligibility Staff responsible for ranking and allocating Title I funds misunderstood guidance and ranked schools based on highest free and reduced meal counts, instead of the percentage of students receiving free and reduced meals, as required. Staff were also not aware they must serve schools with poverty rates more than 75% and only allocated Title I funds to the District’s elementary schools, which had poverty rates less than 75%. Additionally, because OSPI approved the District’s Title I application, staff thought the District met Title I requirements for ranking and allocating funds. Effect of Condition Assessment system security Without documented Test Security and Building Plans, the District cannot demonstrate it implemented and complied with OSPI’s assessment system security requirements for the standardized tests it administered at each elementary school in the 2024-25 school year. Eligibility Because the District allocated Title I funds incorrectly, the amount of services provided at schools with higher percentages of low-income students might have been unfairly limited. The District did not comply with eligibility requirements and did not correctly allocate Title I funds from the highest to lowest poverty concentrations for three out of five elementary school buildings, as federal regulations require. Additionally, the District cannot demonstrate it complied with program requirements to allocate Title I or comparable funds to two schools with poverty rates more than 75%, as required. Recommendation Assessment system security We recommend the District improve its internal controls and follow its established policies and procedures to comply with OSPI’s assessment system security requirements. Specifically, the District should establish written Test Security and Building Plans for all standardized tests it will administer. Eligibility We recommend the District strengthen internal controls and provide additional guidance to staff responsible for ranking and allocating Title I funds to ensure they understand program requirements. Additionally, the District should review and confirm it accurately ranks and allocates Title I funds to school buildings based on highest poverty concentrations and ensure it serves all schools with more than 75% poverty rate with Title I funds, or comparable funding sources, as required. District’s Response Assessment system security The District acknowledges that a lack of documented Test Security and Building Plans for the 2024-2025, due to turn over in staff and responsibilities for the documentations in school year caused us to be unable to demonstrate compliance. The District is committed to strengthening internal controls and ensuring full compliance with all federal program requirements moving forward. Eligibility The District acknowledges that schools were ranked using total low-income student counts rather than poverty percentages, which resulted in incorrect ranking and allocation methodology within grade spans. During the application process where ranking and allocation methods are utilized, the Districts plan to continue to focus on the elementary grade spans were approved by OSPI. The District has already begun corrective actions to address these concerns and the corrective action is fully outlined in the corrective action plan. Additionally, the District is committed to strengthening internal controls and ensuring full compliance with all federal program requirements moving forward. Auditor’s Remarks We appreciate the District’s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 20 U.S. Code section 6311(b)(2)(B)(iii) requires state and local education agencies to establish and maintain valid and reliable assessment systems, consistent with relevant professional and technical standards. Title 34 CFR, Part 200, Title 1 – Improving the Academic Achievement of the Disadvantaged, Subpart A – Improving Basic Programs Operated by the Local Educational Agencies, Section 78 – Allocation of funds to school attendance areas and schools. 20 U.S Code 6313(a)(3), Elementary and Secondary Education Act (ESEA) section 1113(a)(3), Eligible school attendance areas, Ranking order, describes requirements to annually ranked, without regard to grade span, eligible school attendance areas based on low-income families exceeding 75% and to serve those school attendance areas in rank order. 20 U.S Code 6321(c), Elementary and Secondary Education Act (ESEA) section 1118(c), Fiscal requirements, Comparability of services, describes requirements for providing comparable services to schools that are not receiving Title I funds. OSPI Title I, Part A Fiscal Requirements and Guidance provides detailed guidance for ranking and allocating Title I funds.

SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Cheney School District No. 360 September 1, 2022 through August 31, 2023 2023-001 The District’s internal controls were inadequate for ensuring compliance with federal procurement, suspension and debarment requirements. Assistance Listing Number and Title: 84.027, Special Education Grant to States 84.027, COVID 19 - Special Education Grants to States 84.173, Special Education Preschool Grants 84.173, COVID 19 - Special Education Preschool Grants Federal Grantor Name: U.S. Department of Education Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: 0312311, 0307649, 0338442, 0371279, 0367045 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2023, the District spent $1,200,300 in federal funds from the Special Education Cluster. The objective of the Special Education program is to ensure eligible students with disabilities receive free and appropriate public education with specifically designed instruction that addresses their unique needs. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established program controls. Procurement When using federal funds to purchase services, governments must apply the most restrictive of federal requirements, state laws or local policies by obtaining quotes or following a competitive bidding process, depending on the estimated cost of the purchase. District policy conforms to the most restrictive laws and requires that it must publicly solicit services of $250,000 or more using sealed bids or requests for proposals. Additionally, federal regulations require the District to perform a cost or price analysis when formally bidding or requesting proposals. Suspension and debarment Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the District enters into contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that the contractors have not been suspended, debarred or otherwise excluded. The District may verify this by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The District must verify this before entering into the contract, and must maintain documentation demonstrating compliance with this federal requirement. Description of Condition Procurement The District was unsuccessful in hiring employees for its Special Education program and contracted with an external staffing agency to obtain the services of three school psychologists. The District entered into three separate contracts with the staffing agency for these services. The District paid the staffing agency for the psychology services, which then paid the psychologists for their work. The District’s internal controls were not effective for ensuring it complied with federal procurement requirements. Specifically, it did not perform a cost or price analysis for the aggregate staffing agency services and did not follow its policy for procuring and awarding the contracts to the staffing agency. The District paid the external staffing agency $472,818 for school psychology services, of which it charged $195,475 to the federal program. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Suspension and debarment Our audit found the District’s controls were ineffective for ensuring that it verified all parties that received $25,000 or more in federal funds were not suspended or debarred. The District did not obtain a written certification, include a clause in the contract or search for exclusion records at SAM.gov to verify that the one contractor subject to this requirement was not suspended or debarred before entering into contracts with them. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition Procurement District staff misunderstood federal procurement requirements and believed that they could procure services for each school psychologist individually based on student needs, rather than in the aggregate for external staffing agency services. Consequently, they determined that no individual school psychologist contract would exceed $250,000, and that they could procure each contract following the District’s small purchase procedures. As a result, the District obtained quotes for each school psychologist instead of soliciting sealed bids or requests for proposals for staffing agency services as required. Suspension and debarment The District has not regularly charged non-payroll expenditures to federal Special Education programs. Consequently, in fiscal year 2023, District personnel overlooked contracts exceeding $25,000 that were subject to federal suspension and debarment verification requirements, and therefore did not confirm the contractor’s suspension and debarment status. Effect of Condition Procurement Without soliciting sealed bids or requests for proposals as required, the District cannot demonstrate that it complied with its policy and federal regulations and received the best price for the staffing agency services or selected the most qualified contractor. Suspension and debarment Without adequate internal controls, the District cannot ensure the contractor it paid with federal funds is eligible to participate in federal programs. Any program funds the District used to pay contractors that have been suspended or debarred would be unallowable, and the awarding agency could potentially recover them. During fiscal year 2023, the District paid the contractor $472,818 for staffing agency services, of which it charged $195,475 to the federal program. We verified the contractor was not suspended or debarred, so we are not questioning these costs. Recommendation We recommend the District strengthen internal controls to ensure: • Staff responsible for procuring services understand and follow federal procurement requirements and the District’s own procurement policies and procedures • All contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before contracting with them District’s Response We acknowledge the importance of robust internal controls and adherence to federal procurement requirements. In response to the recommendations, we are committed to taking the following actions: 1) Training and Education: We will implement a comprehensive training program for all staff involved in procurement to ensure they have a clear understanding of both federal procurement requirements and our district’s policies and procedures. 2) Policy Review and Update: Our procurement policies and procedures will be reviewed and updated to align with the latest federal regulations. We will ensure these policies are easily accessible and communicated to all relevant staff members. 3) Verification Process: Before engaging with any contractor for services amounting to $25,000 or more, we will establish a verification process to check whether the contractors are in good standing and not suspended or debarred from participating in federal programs. We appreciate the diligence of the audit that led to these recommendations and are dedicated to upholding the highest standards of integrity and compliance in our procurement processes. Auditor’s Remarks We thank the District for its cooperation throughout the audit and the steps it is taking to address these concerns. We will review the status of the District’s corrective action during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations, implementing Executive Orders 12549 and 12689. Title 2 CFR Part 200, Uniform Guidance, section 318, General procurement standards, establishes requirements for written procedures and requirements for maintaining records sufficient to detail the history of procurement. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by nonfederal entities.

SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Cheney School District No. 360 September 1, 2021 through August 31, 2022 2022-001 The District did not have adequate internal controls for ensuring compliance with allowable activities and costs, procurement, and restricted purpose requirements. Assistance Listing Number and Title: 32.009, COVID 19 ? Emergency Connectivity Fund Program Federal Grantor Name: Federal Communications Commission Federal Award/Contract Number: ECF202100295 Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $881,703 Background The Emergency Connectivity Fund (ECF) Program provides funding to meet the needs of students and school staff who would otherwise lack access to connected devices and broadband connections sufficient to engage in remote learning. This is referred to as ?unmet need.? In fiscal year 2022, the District spent $881,703 in ECF Program funds to purchase laptops and Wi-Fi hotspots for students. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Allowable activities and costs ECF Program recipients may only seek reimbursement for eligible devices and services provided to students and staff with unmet need. Recipients are prohibited from seeking reimbursement for eligible equipment and services used solely at the school or held for future use (i.e., warehousing). Procurement When using ECF Program funds to purchase eligible services and equipment, the Federal Communications Commission (FCC) requires recipients to comply with all applicable state or local laws by obtaining quotes or following a competitive bidding process, depending on the estimated cost of the purchase. State law and District policy allow the District to waive competitive bidding requirements for purchases that are clearly and legitimately limited to a single source of supply. The District must prepare and keep documentation supporting the applicable circumstance and rationale for noncompetitive procurement. Restricted purpose ? unmet need When submitting applications to the FCC, schools only had to provide an estimate of their students? and staff?s unmet need. However, when requesting reimbursement, the District could only request program funds for eligible equipment and services provided to students and school staff with actual unmet need. Restricted purpose ? per-location and per-user limitations The FCC imposed per-location and per-user limitations to maximize the use of limited funds. Under the program, eligible schools could only be reimbursed for one connected device and Wi-Fi hotspot per student or school employee with unmet need, and no more than one fixed broadband connection per location, such as a student?s or employee?s residence. Description of Condition Allowable activities and costs/restricted purpose ? unmet need The District estimated unmet need for eligible equipment and services when it applied for ECF Program funds. However, our audit found the District?s internal controls were ineffective for ensuring it documented the determination of actual unmet need and only requested reimbursement for equipment and services provided to students. Specifically, the District purchased laptops and Wi-Fi hotspots, based on its estimate of unmet need, and it requested reimbursement for these purchases totaling $881,703. However, the District did not maintain documentation showing it provided each laptop and Wi-Fi hotspot paid with program funds to a student or employee with unmet need. Procurement Our audit found the District?s internal controls were ineffective for ensuring it followed state law and its own policy when procuring equipment that it charged to the ECF Program. Specifically, the District paid one service provider $838,544 for laptops and another service provider $90,952 for Wi-Fi hotspots, but did not maintain documentation showing the procurement method used and rationale for selecting the providers. Restricted purpose ? per-location and per-user limitations Our audit found the District?s internal controls were ineffective for demonstrating it complied with the FCC?s per-location and per-user limitations. Specifically, the District did not maintain documentation showing it monitored or had a tracking process in place to ensure it only provided one device or connection per user and location. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. The issue was not reported as a finding in the prior audit. Cause of Condition Allowable activities and costs/restricted purpose ? unmet need Although employees in the District?s Finance Department knew that another department received an ECF Program award, they said they did not know the program was federally funded and, therefore, were unaware of all its regulations. Further, they did not know about the requirement to request reimbursement only for actual unmet need, and thought the estimate of unmet need provided during the application process was sufficient to comply with this requirement. Additionally, the District experienced turnover in the position responsible for managing this program, and current staff could not locate records supporting actual unmet need. Procurement The District experienced turnover in the position responsible for managing this program and procuring the laptops and Wi-Fi hotspots, and current staff could not locate the procurement records. Additionally, current staff thought they needed to spend the funds as quickly as possible, and thought that allowed them to bypass procurement requirements in state law and District policy. For the Wi-Fi hotspots, staff said the service provider selected was the only option for the area, but the District did not have documentation supporting this rationale. Restricted purpose ? per-location and per-user limitations Staff said they did not know about the requirement to maintain documentation showing the District only provided one device and/or connection per student and employee. Effect of Condition and Questioned Costs Allowable activities and costs/restricted purpose ? unmet need Because the District did not have documentation supporting whether it provided eligible equipment and services to students with actual unmet need, it cannot demonstrate compliance with the program?s requirements. Given the nature of the program and circumstances, it is likely that at least some of the equipment and services the District charged to the award addressed unmet needs. However, the lack of a documented assessment of students? actual unmet need means that all costs are unsupported. Since we do not have a reasonable basis for estimating how much of the District?s expenditures are allowable, we are questioning all unsupported costs. Federal regulations require the State Auditor?s Office to report known questioned costs that are greater than $25,000 for each type of compliance requirement. We question costs when we find the District does not have adequate documentation to support expenditures. Procurement Without maintaining documentation showing the procurement method used, the District cannot demonstrate it complied with procurement requirements. Additionally, it cannot be sure all interested service providers had the opportunity to bid and that it obtained the lowest price for the laptop and Wi-Fi hotspot purchases. Restricted purpose ? per-location and per-user limitations Because the District did not maintain documentation, it cannot demonstrate compliance with the FCC?s restrictions. Additionally, we cannot determine whether the District only provided one device per user and location. Recommendation We recommend the District work with the granting agency to determine audit resolution. We further recommend the District establish and follow internal controls to ensure staff fully understand the requirements for ECF awards. Specifically, the District should: ? Request reimbursement only for eligible equipment and services provided to students with unmet need, and maintain documentation demonstrating compliance ? Comply with state law and its own policy when procuring goods and services paid with ECF Program funds, and keep documentation supporting the procurement methods it used ? Monitor to confirm it provides no more than one device per student and location in compliance with the ECF Program?s requirements District?s Response The District does not concur with the audit finding or the questioned costs. The District does agree that internal controls and processes could be improved, however, this was during the pandemic and we believe the appropriate level of reporting would be a management letter because all costs were allowable and devices were provided to those with unmet need. While the District does agree that internal controls and processes could have been more carefully followed and there is always room for improvement, these funds were received as an emergency response to prevent learning loss for our students during the crisis caused by the COVID-19 Pandemic when students were not able to attend school in-person. During the District?s urgent need to put computers in students? hands, we pulled together all existing Chromebooks and laptops from across the district and distributed them to families for remote learning. There were not enough devices available across our district, so the District borrowed devices from other districts, purchased additional devices using local funds, and used Emergency Connectivity Funds (ECF) to purchase additional Chromebooks to serve students? immediate needs. In addition, hotspots were purchased with both local and ECF dollars to provide options for many of our families to be able to access educational materials online. The new ECF grant was administered under the Federal Communications Commission (FCC) using the Universal Service Administrative Company (USAC). The District contracted with a consultant to assist with getting our ECF application completed and submitted for reimbursements. We relied heavily on the consultant?s expertise to keep us apprised of all compliance. Unmet Need Based on the guidance below, we have spent all funds for allowable costs, and we believe that those costs were reasonable and necessary for students with unmet needs. The following guidance from the Federal Communications Commission, titled ?Emergency Connectivity Fund Common Misconceptions?, ?Misconception #2: If schools have returned to in-class instruction for the upcoming school year, they are not eligible to participate. Answer: This is false. Equipment and services provided to students or school staff who would otherwise lack sufficient access to connected devices, and/or broadband internet access connection while off campus are eligible for Emergency Connectivity Fund Support.? Devices for remote learning could also be used at school. During the pandemic in Washington State, we experienced times when classrooms, schools, and or districts were closed by the health department and state regulations because of outbreaks. Districts had to be prepared to support remote learning each day with constantly changing guidance on who was allowed to be in person. From the Federal Communications Commission Order FCC-CIRC21-93-043021, question 77: ?We think schools are in the best position to determine whether their students and staff have devices and broadband services sufficient to meet their remote learning needs, and we recognize that they are making such decisions in the midst of a pandemic. We, therefore, will not impose any specific metrics or process requirements on those determinations.? And from question 53: ??we are sensitive to the need to provide some flexibility during this uncertain time. If those connected devices were purchased for the purpose of providing students?with devices for off-campus use consistent with the rules we adopt today, we will not prohibit such on-campus use.? SAO did not apply any reasonable measure to reduce questioned costs but did state they know some of the costs are reasonable, while still choosing to question all costs. That is clearly out of alignment with the FCC guidance. Districts were able to determine whether students had unmet needs, and we initially set out to determine unmet need by surveying families; however, many of our families did not respond to our repeated attempts to communicate with them. We ultimately concluded that all our students had an unmet need for one or more reasons. From the surveys we conducted, and then upon receiving feedback from teachers and staff, we concluded that issuing a district device to every student was a necessity. This would address instances where students were sharing a home device with others, their personal device was too old or slow to function properly, and when a student-owned device did not have the appropriate security in place to protect students during remote learning. Providing each student with a district device also allowed the district access devices to provide technical support for remote learning. Based on these experiences, unmet need was defined broadly and inventory records were kept, albeit, not perfectly. Action Plan Although the District does not concur with the finding or questioned costs, it is taking this finding seriously and has completed an action plan on how it will implement stronger controls and ensure compliance in the future. That being said, the standard of documentation required by SAO to satisfy ?unmet? need would have been hard to meet even if the District hadn?t been in the midst of a pandemic. The District has internal controls over asset inventory and provided equipment only to students and staff with unmet needs, and all costs were allowable, reasonable and necessary. We look forward to working with the FCC to resolve this finding and we appreciate the guidance that was provided by the FCC, as noted above. Final Remarks The district used devices to support students in a manner we feel is consistent with the guidelines established by the FCC. Devices for remote learning could also be used at school. During the pandemic in Washington State, we experienced times when classrooms, schools, and or districts were closed by the health department and state regulations because of outbreaks. Districts had to be prepared to support remote learning each day with constantly changing guidance on who was allowed to be in person. Further, we are not familiar with any specific guidance stipulating the time frame allowable for the distribution of devices to students, specifically those that were being distributed to students during the audit period to replace obsolete devices that were still in student possession from the hectic period of time where we pivoted to remote learning within days. The ?lack of metrics? and the ?flexibility? allowed by the FCC indicate we were following the guidelines. We appreciate the auditor?s work and diligence. Auditor?s Remarks The State Auditor?s Office is sympathetic to the significant challenges the District faced during the COVID-19 pandemic, and deeply respects its commitment to student learning despite these challenges. SAO knows that in many cases, governments across Washington received significant pandemic-era federal funds without also receiving clear guidance on how to use them. Then, and now, SAO continues to advocate for clear, timely guidance from federal agencies to make sure Washington governments are not put in a difficult position at audit time. However, when auditing federal programs of any kind, governments must provide documentation to substantiate that they met the award requirements. As is our practice and audit standards require, we will review the status of this finding during our next audit. We value our partnership with the District in striving for transparency in public service. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 47 CFR Part 54, Universal Service, Subpart Q, Emergency Connectivity Fund, describes the ECF Program requirements.

Schedule of Federal Award Findings and Questioned Costs Cheney School District No. 360 September 1, 2018 through August 31, 2019 2019-001 The District did not have adequate internal controls to ensure compliance with federal requirements for time-and-effort documentation. CFDA Number and Title: 84.287 ? Twenty-First Century Community Learning Centers Federal Grantor Name: U.S. Department of Education Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: 0991164 Questioned Cost Amount: $0 Description of Condition During fiscal year 2019, the District spent $227,074 in Twenty-First Century Community Learning Centers program funds. The objective of the program is to provide students with academic enrichment opportunities along with activities designed to complement students? regular academic program. The District used grant funds to provide after-school learning centers at two school locations. Federal regulations require recipients to establish and follow internal controls to ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established program controls. The District is responsible for ensuring it supports all payroll costs charged to the grant with adequate time-and-effort documentation, as required by federal regulations and the grantor. Depending on the number and types of activities program employees perform, time-and-effort documentation can be a semi-annual certification or monthly personal activity reports, such as a detailed timesheet. Our audit found the District did not obtain semi-annual certifications for two employees who worked solely in the Twenty-First Century Community Learning Centers Grant program during fiscal year 2019. We consider this internal control deficiency to be a material weakness. This issue was not reported as a finding in the prior audit. Cause of Condition The District had processes in place to obtain the required monthly time and effort documentation for the program. However, because of an oversight, it did not have processes in place to ensure two employees completed semi-annual certifications or other time-and-effort documentation to support costs charged to the grant. Effect of Condition and Questioned Costs Without proper time-and-effort records, the District cannot assure federal grantors that $62,075 of payroll costs charged to the grant program were accurate or valid. However, the District provided alternate documentation in the form of personnel action forms that demonstrated costs charged to the program were allowable. Therefore, we are not questioning these costs. Recommendation We recommend the District establish internal controls to ensure it obtains adequate time-and-effort documentation for all employees charging salaries and benefits to federal programs. District?s Response The District has developed adequate controls to ensure compliance with federal requirements for time-and-effort documentation. Auditor?s Remarks We appreciate the steps the District is taking to resolve this issue. We will review the condition during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200 Uniform Guidance, Subpart E, Cost Principles, ?establishes requirements for determining allowable costs and supporting costs allocated to federal programs. Office of Superintendent of Public Instruction (OSPI) Addendum to Bulletin 048-17, Federal Fiscal Policy, establishes requirements for documenting time-and-effort for employees that work in federal programs.

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