COLLEGE PLACE SCHOOL DISTRICT

College Place School District No. 250 September 1, 2021 through August 31, 2022 2022-001 The District did not have adequate internal controls for ensuring compliance with federal wage rate requirements. Assistance Listing Number and Title: 84.425, COVID-19 Education Stabilization Fund 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: COVID-19, 84.425D ? 1202 COVID-19, 84.425U ? 1304 COVID-19, 84.425U ? 0137043-1405 COVID-19, 84.425U ? 0139006-1305 Known Questioned Cost Amount: $0 Background The objectives of the Education Stabilization Fund (ESF) program are to prevent, prepare for and respond to the COVID-19 pandemic. In fiscal year 2022, the District spent $2,598,292 of its ESF awards. This included $432,918 in the Elementary and Secondary School Emergency Relief (ESSER II) Fund subprogram (84.425D), as well as $2,165,374 in the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER/ESSER III) subprogram (84.425U). Federal regulations require award 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. Under federal wage rate requirements, also known as the Davis-Bacon Act, contractors and subcontractors that work on projects financed with more than $2,000 of federal money must pay laborers and mechanics wage rates that the U.S. Department of Labor considers being similar to what local workers have been paid for similar projects. For construction contracts subject to these wage rate requirements, the District must include a provision that the contractor and subcontractor comply with those requirements and the Department of Labor?s regulations. This includes a requirement for the contractor and its subcontractor to submit to the District weekly, for each week in which any contract work is performed, certified payroll reports. These reports must include a copy of the payroll and a signed statement of compliance. The District may use a contracted project manager to collect certified payroll reports from contractors and subcontractors, but ultimately, it is the District?s responsibility to comply with these requirements and maintain documentation demonstrating compliance. Description of Condition During the 2021?22 school year, the District spent $711,380 from its ESSER II and ESSER III awards to pay two contractors and their subcontractors for adding portable classrooms to the District?s campus, and to pay two contractors and their subcontractors for upgrades to the heating, ventilation and air conditioning (HVAC) systems. These projects were part of the District?s school facility capital improvement efforts to prevent the spread of COVID-19 and enable school operations by facilitating greater air flow and filtration. Our audit found the District did not have adequate internal controls for ensuring compliance with federal prevailing wage rate requirements. Specifically, the District did not: ?Include the required prevailing wage rate clauses in three contracts ?Collect, or ensure project managers collected, weekly certified payroll reports from the contractors and their subcontractors working on two contracts to confirm they paid laborers proper prevailing wages We consider these deficiencies in internal controls to be a material weakness, which led to material noncompliance. The issue was not reported as a finding in the prior audit. Cause of Condition District staff said they requested quotes to procure the general contractors for upgrades to the HVAC system projects, and they relied on the contracts provided by the general contractor, which did not include the required prevailing wage language. Additionally, the District relied on the project manager to obtain and review weekly certified payroll reports for two contractors and their subcontractors. The District did not monitor the project manager to verify all weekly certified payroll reports were obtained. Effect of Condition Without adequate internal controls that ensure it includes the prevailing wage rate clauses in its contracts and collects all weekly certified payroll reports, the District cannot demonstrate it complied with federal wage rate requirements. The District could also be liable for paying any additional wages if the contractors and subcontractors did not pay prevailing wage rates to laborers working on the contracts. Recommendation We recommend the District develop internal controls to ensure compliance with federal wage rate requirements. This should include inserting prevailing wage rate clauses into contracts, as well as implementing effective monitoring processes to collect and review all weekly certified payroll reports timely from contractors and subcontractors. District?s Response This particular project was funded through ESSER funds which are considered federal funds.Federal funds require a special set of guidelines. The district contracted with a project manager who completed the prevailing wage documentation. In the future, if the District uses federal funds for construction projects, the District will include the provision that the contractor or subcontractors comply with requirements to submit to the District weekly, for each week in which any contract work is performed, certified payroll reports. These reports will include a copy of the payroll and a signed statement of compliance. The District will ensure federal prevailing wage rate clauses are in included in contracts using federal funds. The District understands that we may use a contracted project manager to collect certified payroll reports from contractors and subcontractors, but ultimately, it is the District?s responsibility to comply with these requirements and maintain documentation demonstrating compliance. Auditor?s Remarks We appreciate the District?s commitment to resolving this finding, and thank the District for its cooperation and assistance during the audit. 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 29 CFR, Section 5.5 ? Contract provisions and related matters establishes the requirements for the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part with federal funds the clauses listed, which includes but is not limited to the minimum wages to be paid and payrolls and basic records to be maintained (submission of weekly certified payrolls). Title 29 CFR, Section 3.3 ? Weekly statement with respect to payment of wages, and Section 3.4 ? Submission of weekly statements and the preservation and inspection of weekly payroll records, establishes requirements for contractor or subcontractor submission of weekly certified payroll reports.

CORRECTIVE ACTION PLAN FOR FINDINGS REPORTED UNDER UNIFORM GUIDANCE College Place School District No. 250 September 1, 2021 through August 31, 2022 Finding Ref. No.: 2022-001 Finding Caption: The District did not have adequate internal controls for ensuring compliance with wage rate requirements. Name, address, and telephone of District contact person: Julie James, Director of Business and Finance 1755 S. College Ave., College Place, WA 99324 (509) 525-4827 Corrective action the auditee plans to take in response to the finding: This particular project was funded through ESSER funds which are considered federal funds. Federal funds require a special set of guidelines. The district contracted with a project manager who completed the prevailing wage documentation. In the future, if the District uses federal funds for construction projects, the District will include the provision that the contractor or subcontractors comply with requirements to submit to the District weekly, for each week in which any contract work is performed, certified payroll reports. These reports will include a copy of the payroll and a signed statement of compliance. The District will ensure federal prevailing wage rate clauses are in included in contracts using federal funds. The District understands that we may use a contracted project manager to collect certified payroll reports from contractors and subcontractors, but ultimately, it is the District?s responsibility to comply with these requirements and maintain documentation demonstrating compliance. Anticipated date to complete the corrective action: 6/14/2023

The District did not have adequate internal controls to ensure compliance with assessment system security requirements for its Title I program. CFDA 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 Superintendent of Public Education Pass-through Award/Contract Number: 0203269 Questioned Cost Amount: $0 Background The program objective of Title I is to help local education agencies improve the teaching and learning of children who are at risk of not meeting academic standards and who reside in areas with high concentrations of children from low-income families. During fiscal year 2020, the District spent $386,423 in Title I program funds. Federal regulations require recipients of federal awards to establish and follow internal controls to ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. 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 that districts implement these policies and procedures for all standardized tests. The state Office of Superintendent of Public Instruction (OSPI) provides templates for all districts to document its Test Security and Building Plans for each assessment it administers. OSPI also provides detailed guidance and manuals on test security. Description of Condition The District did not have written Test Security and Building Plans in place for all standardized tests it administered, as OSPI required. The District did not have plans for any of the English Learning Proficiency Assessments (ELPA) and World-Class Instructional Design and Assessment (WIDA). We consider this internal control deficiency to be a material weakness that led to material noncompliance. The issue was not reported as a finding in the prior audit. Cause of Condition The current staff at the District stated they believe the previous District staff responsible for ELPA and WIDA standardized testings were not aware OSPI required the District to have a formal written plan for each assessment and building to demonstrate compliance. Effect of Condition Without a documented plan, the District cannot demonstrate it implemented and complied with OSPI?s assessment security requirement for all standardized tests it administered in fiscal year 2020. Recommendation We recommend the District improve internal controls and establish policies and procedures to comply with OSPI?s assessment system security requirements. Specifically, the District should establish written test security building plans for all standardized tests, as OSPI requires. District?s Response The District concurs that the test security building plans were not implemented during the 2019-2020 school year. The District will improve internal controls and follow established State and Federal requirements to comply with OSPI?s assessment system security for the tests it administers. Specifically, the District will establish written test security plans for all standardized tests as required by OSPI. Documentation that shows compliance in the 2020/2021 school year has been provided to the State Auditor?s Office to show the District is currently in compliance for 2020/2021. Auditor?s Remarks We thank the District for its cooperation and assistance throughout the audit, and the steps it took to address this issue. 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 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.

This schedule presents the corrective action planned by the District for findings reported in this report in accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Finding caption: The District did not have adequate internal controls to ensure compliance with assessment system security requirements for its Title I program. Name, address, and telephone of District contact person: Julie James, Director of Business and Finance 1755 S College Avenue College Place, WA 99324 (509) 525-4827 Corrective action the auditee plans to take in response to the finding: (If the auditee does not concur with the finding, the auditee must list the reasons for non-concurrence). The District concurs that the test security building plans were not implemented during the 2019- 2020 school year. The District will improve internal controls and follow established State and Federal requirements to comply with OSPI?s assessment system security for the tests it administers. Specifically, the District will establish written test security plans for all standardized tests as required by OSPI. Documentation that shows compliance in the 2020/2021 school year has been provided to the State Auditor?s Office to show the District is currently in compliance for 2020/2021. Anticipated date to complete the corrective action: January 2021