Seacoast Classical Academy Chartered Public SchoolNon-Profit

Federal Agency: U.S. Department of Education Award Name: Charter Schools Program Year: 2025 Assistance Listing Number: 84.282 Compliance: Activities Allowed and Unallowed and Allowable Costs/Cost Principles Finding Type: Noncompliance and significant deficiency in internal controls over compliance. Criteria: Management is responsible for maintaining adequate records for vendor transactions charged to federal awards that accurately reflect expenses. These records must include an invoice with a signature from a knowledgeable and authorized individual approving the expense. Condition: During testing, it was noted that approvals for vendor expenses paid with a credit card and charged to the federal award were not retained. Context: Of the 60 occurrences tested, 4 were missing approval support. Cause of condition: The School does not have an approval policy for credit card purchases. Effect of condition: The lack of documented approval increases the risk that expenditures could be processed without proper review for allowability and compliance with federal requirements. Recommendation: We recommend that management evaluate and implement appropriate internal controls over credit card expenditures charged to federal programs, such as supervisory review or other compensating controls, to ensure compliance with federal requirements. View of Responsible Officials and Planned Corrective Action: The School will implement a formal credit card expenditure approval policy for purchases charged to federal programs. All credit card transactions will require supporting documentation and documented supervisory approval prior to reimbursement or recording in the accounting system. Periodic management review will be implemented to ensure compliance. Planned Implementation Date of Corrective Action: June 30, 2026 Person Responsible for Corrective Action: Eric Peterson, Executive Director

Federal Agency: U.S. Department of Education Award Name: Charter Schools Program Year: 2025 Assistance Listing Number: 84.282 Compliance: Activities Allowed and Unallowed and Allowable Costs/Cost Principles Finding Type: Noncompliance and significant deficiency in internal controls over compliance. Criteria: Management is responsible for maintaining adequate records regarding charges to federal awards for salaries and wages that accurately reflect the work performed and are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition and context: During testing it was noted that no adequate time and effort documentation was maintained for salaried employees being charged to federal awards. Cause of condition: The School did not consistently follow established payroll review and approval procedures to ensure that timecards supporting compensation charged to federal awards were properly reviewed and approved. Effect of condition: Failure to ensure supervisory approval of timecards increases the risk that salary and wage costs charged to the federal award may not be accurate, allowable, or properly allocated. Without documented review and approval, errors or inappropriate charges may not be detected in a timely manner and could result in unallowable costs. Recommendation: We recommend the School strengthen procedures to ensure all timecards supporting payroll charged to federal awards are reviewed and maintained in accordance with established policies prior to processing and charging costs to federal programs. View of Responsible Officials and Planned Corrective Action: The School will strengthen procedures to ensure time and effort documentation is maintained for employees whose salaries are charged to federal awards. Supervisory review and approval of time records will be required prior to payroll processing, and staff responsible for payroll administration will receive additional training regarding federal grant compliance requirements. Planned Implementation Date of Corrective Action: June 30, 2026 Person Responsible for Corrective Action: Eric Peterson, Executive Director

Federal Agency: U.S. Department of Education Award Name: Charter Schools Program Year: 2025 Assistance Listing Number: 84.282 Compliance: Equipment and Real Property Management Finding Type: Noncompliance and significant deficiency in internal controls over compliance. Page 12 Criteria: Management is responsible for establishing and maintaining effective internal controls over capital assets purchased with federal awards. This includes periodic physical inspections to safeguard assets and verify their existence. This includes keeping records to track such capital assets that include the serial number or other identifying number and source of funding, including the related Assistance Listing number. Condition and context: During testing, it was noted that the School did not perform a physical inventory of equipment purchased with federal funds. It was also noted that the School did not document a unique identifying number or the Assistance Listing number related to the federal award used to purchase the assets. Cause of condition: There is no formal policy in place requiring periodic physical inspections of capital assets or for proper tracking of capital assets. Effect of condition: The lack of a physical inspection and other tracking requirements increases the risk that capital assets may be lost, stolen, impaired, or disposed of and not reported. Recommendation: We recommend the School implement formal procedures to ensure that physical inventories of federally funded equipment are conducted at least once every two years, documented, and reconciled to detailed property records. View of Responsible Officials and Planned Corrective Action: Detailed records will be maintained including asset tags, serial numbers, funding source, and Assistance Listing numbers. A documented physical inventory will be performed at least once every two years and reconciled to asset records. Planned Implementation Date of Corrective Action: June 30, 2026 Person Responsible for Corrective Action: Eric Peterson, Executive Director

Federal Agency: U.S. Department of Education Award Name: Charter Schools Program Year: 2025 Assistance Listing Number: 84.282 Compliance: Procurement Finding Type: Noncompliance and significant deficiency in internal controls over compliance. Criteria: Management is responsible for using documented procurement procedures that conform to Uniform Guidance. Small Purchase Procedures, for procurement transactions exceeding the micropurchase threshold and not exceeding the simplified acquisition threshold, require that price or rate quotations must be obtained from an adequate number of qualified sources. The School’s written procurement policy requires that small purchases (between $10,000 and $250,000) obtain price or rate quotations from an adequate number of qualified sources. Condition and context: During testing it was noted that the procurement policy was not being followed in some instances. Per discussion with management, the School selected a new vendor without soliciting or documenting quotations from other qualified vendors, as required by Uniform Guidance and the School’s procurement policy. Page 13 Cause of condition: Management indicated that the exceptions occurred due to oversight and time constraints as the School worked to complete the school prior to its scheduled opening. As a result, established procurement policies were not consistently followed. Effect of condition: Failure to obtain price or rate quotations from an adequate number of qualified sources increases the risk that goods and services are not procured in a manner providing full and open competition, as required by Uniform Guidance. Recommendation: We recommend that the School strengthen internal controls over procurement to ensure compliance with Uniform Guidance and its written procurement policy. View of Responsible Officials and Planned Corrective Action: The School will reinforce procurement procedures to ensure compliance with Uniform Guidance and its written procurement policy. Procurement transactions exceeding the micro-purchase threshold will require documented price quotations from multiple qualified vendors. A procurement checklist and staff training will be implemented to ensure consistent compliance. Planned Implementation Date of Corrective Action: June 30, 2026 Person Responsible for Corrective Action: Eric Peterson, Executive Director