La Center School District No. 101

La Center School District No. 101 September 1, 2024 through August 31, 2025 2025-001 The District did not have adequate internal controls and did not comply with time and effort requirements Assistance Listing Number and Title: 84.027 Special Education Grants to States Federal Grantor Name: Department of Education, Office of Special Education and Rehabilitation Services Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: GT-03232, GT-03603, GT-HNI25-00119 Known Questioned Cost Amount: $0 Prior Year Audit Finding: Yes, Finding 2024-001 Background During fiscal year 2025, the District spent $381,240 in federal funds from the Special Education Grants to States program. This program ensures students with disabilities receive free and appropriate public education with specially designed instruction that addresses their unique needs. 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. The District is responsible for ensuring it supports all payroll costs it charges to the program with adequate time-and-effort documentation, as required by federal regulations and the awarding agency. Depending on the number and types of activities employees perform, time-and-effort documentation can be a semiannual certification or a monthly personnel activity report. Time-and-effort documentation must also be signed and dated after employees complete the work. Description of Condition The District’s internal controls were ineffective for ensuring it supported all salaries and benefits it charged to the program with appropriate time-and-effort documentation, as federal regulations and OSPI require. Our audit found the District transferred $48,846 of salary and benefit amounts to its Special Education Grants to States award that were originally coded to other local and state programs, resulting in the District charging employees to a federal program without obtaining sufficient time-and-effort documentation. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition Although District staff knew about the requirement to obtain time-and-effort documentation for staff it paid with program funds, they did not know the timesheets staff used did not have the required information to support that employees worked towards the federal objective. Effect of Condition The District did not obtain adequate time and effort documentation for two employees, whose payroll and benefits charged to the program totaled $48,846. Without adequate time and effort documentation, the District cannot demonstrate compliance with the awarding agency's documentation requirements to support costs charged to federal programs. Further, the District cannot assure federal grantors that payroll costs it charged to the program were accurate and valid. During the audit, the District supported these payroll costs by providing alternative documentation to show the employees worked on the program; therefore, we are not questioning these costs. Recommendation We recommend the District continue to improve, establish and follow internal controls to ensure it complies with federal and Office of Superintendent of Public Instruction requirements for obtaining signed time-and-effort documentation. District’s Response The District acknowledges that the Time and Effort certifications were not signed in accordance with established requirements. All other required documentation and supporting records were complete, accurate, and maintained in compliance with applicable federal requirements. This matter arose during the year-end closing process, which I was completing for the first time, while working under daily guidance from ESD 112, who provided step-by-step technical assistance throughout. Given that no federal funds are being questioned and that all programmatic and fiscal requirements were otherwise met, the District asserts that this issue constitutes an isolated procedural oversight rather than a systemic compliance deficiency. The District is grateful that the audit confirms no funds have been misused or misplaced, and we appreciate the audit's recognition that our previously implemented process improvements are working effectively. In response to this matter, the District has already implemented enhanced internal controls specific to the year-end closing process to ensure full compliance moving forward. Beginning immediately, the Director of Special Education, the District Support Specialist, and the Business Manager will meet collaboratively during year-end closing to review and verify that all required documentation — including Time and Effort certifications — is completed accurately and within required timelines. Moving forward, the District will also make the necessary changes to improve the year-end journal entry process. The District has made significant and measurable improvements to its federal grant compliance processes in recent years. With the addition of these strengthened internal review procedures, the District is confident in its continued ability to meet all federal requirements and remains fully committed to maintaining the highest standards of fiscal accountability and compliance. Auditor’s Remarks We appreciate the District’s continued commitment to resolve this finding. We will review the corrective action taken during our next regular 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 Bulletin No. 039-24, Time and Effort (T&E) Reporting, establishes requirements for documenting time-and-effort.

SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS La Center School District No. 101 September 1, 2023 through August 31, 2024 2024-001 The District did not have adequate internal controls and did not comply with time-and-effort requirements. Assistance Listing Number and Title: 84.027 Special Education Grants to States Federal Grantor Name: Department of Education, Office of Special Education and Rehabilitation Services Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: 307698, 338473, AD-2988 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2024, the District spent $362,064 in federal funds from the Special Education program cluster. This program ensures students with disabilities receive free and appropriate public education with specially 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 controls. The District is responsible for ensuring it supports all payroll costs charged to the program with adequate time-and-effort documentation, as required by federal regulations and the awarding agency. Depending on the number and types of activities employees perform, time-and-effort documentation can be a semiannual certification or a monthly personnel activity report, such as a detailed timesheet. Time-and-effort documentation must also be signed and dated after the work is completed. Description of Condition The District’s internal controls were ineffective for ensuring it supported all salaries and benefits it charged to the program with appropriate time-and-effort documentation, as federal regulations and OSPI require. Specifically, District staff tracked allowable payroll costs and completed time-and effort documentation. However, for the second half of the school year, the semi-annual certifications indicated time worked was for another federal program. Additionally, the District completed a semiannual certification for one staff member who required a monthly personnel activity report because they worked on more than one cost objective. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition The District relied on one staff member to complete all semiannual certifications without an independent review to ensure forms were accurately completed. Additionally, the District misunderstood when a semiannual certification could be used. Effect of Condition The District did not obtain time-and-effort documentation for five employees whose payroll and benefits costs totaling $135,194 were charged to the program. Without adequate time-and-effort documentation, the District cannot demonstrate compliance with the awarding agency’s documentation requirements to support costs charged to federal programs. Further, the District cannot assure federal grantors that payroll costs it charged to the program were accurate and valid. During the audit, the District supported these payroll costs by providing alternative documentation to show the employees worked on the program; therefore, we are not questioning these costs. Recommendation We recommend the District establish and follow internal controls to ensure it complies with federal and OSPI requirements for obtaining signed time-and-effort documentation timely. District’s Response This letter is in response to the SAO Audit concern regarding the Special Education Time & Effort Attestation Finding. As discussed with the State Auditor, the issue stemmed from a clerical error in the activity box selection. We have since corrected the forms, with the original signer’s initials added for verification. This error did not affect student services or funding. A review of prior year signatures supports the intent to check the correct box on the forms. To prevent similar issues in the future, we will pre-fill the forms and print them with the appropriate box selections for the necessary attestation. Moving forward, LCSD will continue to adhere to the guidelines provided by OSPI for attestation signatures and the correct use of fund codes. 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 regular 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 Addendum to Bulletin 048-17, Guidelines for Charging Employee Compensation to Federal Grants establishes requirements for documenting time-and-effort, including fixed schedule systems.

2020-002 The District did not have adequate internal controls to ensure compliance with federal requirements for time-and-effort documentation. CFDA Number and Title: 84.027 Special Education Grants to States 84.173 Special Education Preschool Grants Federal Grantor Name: U.S. Department of Education Federal Award/Contract Number: NA Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: 306813, 366305 Questioned Cost Amount: $0 Description of Condition The objective of the Special Education program is to ensure all children with disabilities receive special education and related services to meet their needs. During fiscal year 2020, the District received $348,359 in Special Education program funds. 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 salaries and benefits charged to the grant with adequate time-and-effort documentation, as the grantor required. Depending on the number and types of activities an employee performs, time-and-effort documentation can be a semi-annual certification or a monthly personnel activity report, such as a detailed timesheet. Our audit found the District did not design an effective process to monitor or subsequently review all payroll costs charged to the program to ensure it obtained semi-annual certifications or detailed monthly personnel activity reports for seven employees who worked solely in the program. We consider this internal control deficiency 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 Previously, this program was managed by the Educational Service District. School District staff recently took over management responsibilities and were not aware of the specific time-and-effort documentation requirements due to inadequate training. Effect of Condition Without adequate time-and-effort documentation, federal grantors cannot be assured that $345,624 in salaries and benefits charged to the program are accurate and valid. Salaries and benefits charged to the grant for these employees totaled about 93 percent of total grant expenditures. However, the District provided adequate alternative forms of documentation that indicate the costs charged to the program are allowable. Therefore, we are not questioning these costs. Recommendation We recommend the District strengthen internal controls to ensure it obtains adequate time-and-effort documentation and provides staff with necessary training to understand what time-and-effort records are required to support payroll costs charged to the program. District?s Response Answer to: Background The District does not dispute the inadequate internal control to ensure compliance with federal requirements for time-and-effort documentation. Answer to: Description of Condition The District does is responsible for having an effective process to monitor or subsequently review all payroll costs charged to the program to ensure it obtained semi-annual certification or detailed monthly personnel activity reports for employees funded by federal dollars. This procedure has been created for the current and subsequent years. Answer to: Cause of Condition The District being new to managing this program will be more diligent in learning about the required documents to support costs charge to federal program. Answer to: Effect of Condition The District did not have time-and effort documentation for the dollars being charged to the program. This created questions as to whether the grant expenditures were valid. Other documentations that the District had verified the expenditures but understand the need for the time-and-effort process. Answer to: Recommendation The District has, since the awareness made during this audit, created a procedure for time-and ?effort to be assured that the dollars being spent from the federal grantors are accurate and valid. 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 regular 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. Office of Superintendent of Public Instruction Addendum to Bulletin 048-17, Attachment A. Semi-Annual Certification - Single Cost Objective.