Region One Education Service Center

Reference Number 2024-002 Timely Time and Effort Approvals Federal Awards: Adult Education and Literacy Service Provider (ALN 84.002A), School Safety National Activities (ALN 84.184X), TRIO Cluster (ALN 84.047M, 84.047A and 84.066A), Gaining Early Awareness and Readiness for Undergraduate Programs (ALN 84.334A) and State Administrative Expenses for Child Nutrition (ALN 10.560)

Criteria and Condition: Internal controls must be in place to ensure the distribution of salary or wages among specific activities or cost objectives among federal or state programs is accurate. The Center’s controls includes a semi-annual certification whereby employees certify 100% of their duties relate to a particular program and activities are allowed under that program. For employees whose duties are not related 100% to a particular program, a monthly certification provides an allocation among funding sources based on time-and-effort reports. These semi-annual and monthly certifications are reviewed and approved by a supervisor. We noted all certifications were not completed timely. In some cases, the supervisor approval occurred months after the period covered by the semi-annual certification. A summary, including the number of exceptions noted and samples sizes tested, follows: Adult Education (ALN 84.002A) 40 of 40 School Safety National Activities (ALN 84.184X) 37 of 37 TRIO Cluster (ALN 84.047M, 84.047A and 84.066A) 36 of 37 GEAR UP (ALN 84.334A) 39 of 40 State Adm Expenses for Child Nutrition (ALN 10.560) 37 of 37 IDEA-B Special Education Leadership (State) 37 of 37 Intruder Detection Audits Technical Assistance (State) 9 of 9 Early Childhood Intervention Program (State) 40 of 40 Cause and Effect: Certification forms are not reviewed and approved by supervisors timely. The lack of timely certification of salary or wages distribution among specific activities or cost objectives among federal or state funds may results in errors which in turn may result in ineligible costs. Repeat Finding from Prior Year(s): N/A Questioned Costs: $0 Recommendation: We recommend the certifications be completed and approved by supervisors timely. Views of Responsible Officials: See management’s corrective action plan.

Reference Number 2024-003 Matching Federal Awards: GEAR UP (ALN 84.334A) Criteria and Condition: The GEAR UP program requires the Center to provide a match of not less than 50% of the total cost of the program. The match may be provided in cash or in-kind and may be accrued over the full duration of the grant award period. The Center provides its match with in-kind including, but not limited to, teacher volunteers, donated materials and supplies, and office use. Under the GEAR UP program, school districts (subrecipients) submit in-kind documentation to the Center via an electronic portal. The Center then compiles the in-kind documentation from all the subrecipients and monitors the in-kind match. We noted no documented evidence that the in-kind documentation submitted by subrecipients is being reviewed and approved by the Center. We also noted the following: - For 3 of 40 in-kind contributions tested, we noted errors in the calculation of the total value of the in-kind contribution. These errors resulted in the in-kind value being overstated by $14,257. -Out of the 40 in-kind contributions tested, there were 29 in-kind contributions related to teachers or other professional volunteers. The Center uses a report from TASB to assign an hourly value to time contributed for the respective types of professionals. We noted the Center used an outdated TASB salary schedule from 2018-2019 for determining the in-kind value. For teachers, the inkind electronic portal used by subrecipients to submit in-kind documentation auto populates the teacher hourly rate to $50 per hour. We noted the 2018-2019 TASB salary schedule had teacher salaries at $40 per hour. No documentation could be provided to support how the rate of $50 per hour was derived. Cause and Effect: Matching information is not required to be submitted to the grantor until the annual performance report is submitted in April of each year. The Center does not perform detailed reviews of in-kind documentation at the time it is submitted by subrecipients. The lack of a detailed review may result in errors in the value of the in-kind match reported in the annual performance report and may result in non-compliance with the program’s matching requirement. Repeat Finding from Prior Year(s): N/A Questioned Costs: $0 Recommendation: We recommend the Center strengthen internal controls to ensure the value of the in-kind match is correct and accurate. This can be accomplished by implementing a detailed review and approval process as in-kind documentation is submitted by subrecipients. We also recommend documentation be maintained to support the hourly values used for teachers and other professionals, including updating the rates annually. Views of Responsible Officials: See management’s corrective action plan.

Reference Number 2024-004 Subaward Agreements Federal Awards: GEAR UP (ALN 84.334A) Criteria and Condition: A pass-through entity must clearly identify to the subrecipient; (1) the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(b)(1); (2) all requirements imposed by the pass-through entity on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award; and (3) any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility for the federal award. We noted a formal subaward agreement outlining all the required information is not prepared and executed by the Center (pass-through entity) and its subrecipients. Amended guidance was communicated to the Center as 34 CFR 75.127 through 75.129 was amended on August 29, 2024. Under this new guidance, an agreement that details the activities that each member of the group plans to perform, and binds each member of the group to every statement and assurance made by the application will be required on an ongoing basis. The Center intends to comply with this requirement on an ongoing basis. Cause and Effect: The Center provides separate documents to its subrecipients such as the District/Campus Commitment Form that outlines some of the applicable compliance requirements and a Program Budget Award Worksheet. A formal subaward agreement executed by both parties containing all the information required by 200.332(b)(1) is not in place. This results in noncompliance with subrecipient monitoring requirements. Repeat Finding from Prior Year(s): N/A Questioned Costs: $0 Recommendation: As 34 CFR 75.127 through 75.129 was amended on August 29, 2024, we recommend management implement this guidance and maintain formal agreements between the Center and the subrecipients/partners in the program. Views of Responsible Officials: See management’s corrective action plan.

Criteria and Condition: The Center’s internal controls require the payroll register to be approved once payroll has been processed but before payroll payments are issued. No documented evidence could be provided to verify that the payroll registers were approved prior to payment. Cause and Effect: Based on discussion with management, the approvals had been made with a message on Microsoft Teams. However, the Microsoft Teams chat history is no longer available to provide documented evidence that the approvals had been granted. The lack of documented evidence does not provide an audit trail to support the internal control was followed. Repeat Finding from Prior Year(s): N/A Questioned Costs: $0 Recommendation: We recommend the payroll register be signed and dated to document the approval to proceed with processing payments. The approvals should be maintained to provide verifiable evidence. Views of Responsible Officials: See management’s corrective action plan.