NYOS Charter School Incorporated

Finding 2025-001: Reporting – Significant deficiency in internal controls over compliance. Child Nutrition Cluster ALN 10.555/10.553 Criteria: Section 200 of the Code of Federal Regulations requires recipients to implement robust internal controls to ensure compliance for all required reporting submissions. Condition: During reporting testing for federal grants, 4 out of 4 monthly claims for reimbursements did not have documented support of review and approval prior to the claim being submitted. Cause: NYOS did not have a standard procedure in place to document management's review and approval for monthly claims for reimbursements. Effect: NYOS’ reporting of monthly claims for reimbursement are not fully documented in accordance with internal control procedures over compliance. Questioned costs: None. Recommendation: Management should design and implement controls to ensure prior approval of reporting claims are documented. Management’s response: See corrective action plan.

Finding #2024-004 – Material Weakness and Other Non-Compliance – Reporting. Applicable federal programs: All Programs. Criteria: Schedule of Expenditures of Federal Awards – In accordance with the Uniform Guidance §200.508 and §200.510, management is to prepare a schedule of expenditures of federal wards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended. Condition and context: As a result of turnover in the accounting department, NYOS did not provide a SEFA that reconciled to the expenses, reported in the general ledger and had not reconciled expenses to revenue reported for federal grants to identify differences. As a result, a federal grant with expenditures of approximately $168,000 was omitted from the SEFA. Cause: NYOS failed to have procedures in place to properly prepare the SEFA and to reconcile expenses to revenue reported for federal grants. Effect: The SEFA provided was not complete resulting in adjustments. Recommendation: Develop policies and procedures to identify and reflect all federal programs and required information on the SEFA and to reconcile expenses to revenue. View of responsible officials and planned correction actions: Management agrees with the finding. See Corrective Action Plan.

Finding #2024-005 – Material Weakness and Other Non-Compliance – Procurement. Applicable federal programs: Special Education Grants to States, Assistance Listing # 84.027A, Contract Number: H027A230008, Contract Year: 07/01/23 – 09/30/24, Special Education Preschool Grants, Assistance Listing # 84.173X, Contract Number: H173X210004, Contract Year: 10/01/22 – 09/30/23, Special Education Preschool Grants, Assistance Listing # 84.173A, Contract Number: H173A230004, Contract Year: 07/01/23 – 09/30/24. Criteria: Same as Finding #2024-003. Condition and context: Same as Finding #2024-003. Repeat of Finding #2023-003. Cause: Same as Finding #2024-003. Effect: Same as Finding #2024-003. Recommendation: Same as Finding #2024-003. View of responsible officials and planned correction actions: Management agrees with the finding. See Corrective Action Plan.

Finding #2023-004 – Significant Deficiency and Other Noncompliance. Applicable federal program: U. S. Department of Education, Passed through Texas Education Agency, COVID-19 Education Stabilization Fund, Assistance Listing # 84.425D, Contract Number: S425D210042, Contract Year: 09/29/21 – 09/30/23, Assistance Listing # 84.425U, Contract Number: S425U210042, Contract Years: 06/30/21 – 09/30/24, 11/08/21 – 08/31/24. Criteria: Allowable Costs – The Uniform Guidance, Subpart E Cost Principles, establishes cost principles which must be met for expenditures to be allowable, including but not limited to, the cost being determined in accordance with generally accepted accounting principles. Additionally, §200.400 (d) requires that charges to awards be properly approved and supported by adequate documentation. Condition and context: Same as Finding #2023-002. Cause: Same as Finding #2023-002. Effect: Failure to adequately establish and maintain effective internal control over approval, documentation, and recording of vendor disbursements and payroll transactions may result in unallowable costs being charged to the programs. Recommendation: Same as Finding #2023-002. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.