School District 12 Education Foundation DBA Five Star Education Foundation

2024-001 Late Submission of Reports Compliance Requirement – L. Reporting Federal Agency – Department of the Treasury Federal Program Name – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number – 21.027 Pass-through Agency – Adams County, Colorado Criteria: School District 12 Education Foundation (dba Five Star Education Foundation) is required to submit Monthly Financial Reports by the 10th of each month for the periods January through February and by the 15th of each month for the remaining months through December. In addition, School District 12 Education Foundation (dba Five Star Education Foundation) is required to submit Quarterly Reports by the 15th of each month. Condition: In our audit, we found that 2 out of 8 Reports tested were submitted after the 15th of the following month. After reviewing all the reports with School District 12 Education Foundation (dba Five Star Education Foundation), we noted 3 monthly reports, out of a total of 50 required reports, and 7 quarterly reports, out of a total of 25 required reports, were submitted untimely. Cause: Due to issues with the grantor’s reporting submission site transition and having no data to submit for several quarterly reports, the reports were not submitted timely by School District 12 Education Foundation (dba Five Star Education Foundation). Effect: Reports submitted late may result in denial or delay of the reimbursement payment requested. Questioned Costs: None noted. Repeat Finding: Not a repeat finding. Recommendation: We recommend School District 12 Education Foundation (dba Five Star Education Foundation) review and follow policies and procedures to ensure timely submission of reports. View of Responsible Officials: School District 12 Education Foundation (dba Five Star Education Foundation) agrees with the finding and recommendation.

2024-002 – Internal Control Over Financial Reporting– Significant Deficiency Criteria: Management is responsible for the design and implementation of internal controls over year-end financial reporting, including controls over procedures used to enter transaction in the general ledger and record recurring and nonrecurring adjustments to the financial statements on an accrual basis. Condition: During the course of the audit, journal entries were required to reconcile accounts receivable, accrued expenses, and accrued PTO from a cash basis to an accrual basis, which indicate a lack of operating effectiveness of internal controls over the financial reporting process. Cause: School District 12 Education Foundation (dba Five Star Education Foundation) had not implemented policies or procedures, to the degree necessary, to ensure that all transactions are properly accounted for in accordance with US GAAP. Effect: Lack of operating effectiveness of internal controls over financial reporting resulted in significant adjustments in financial reporting. Questioned Costs: None noted. Repeat Finding: Not a repeat finding. Recommendation: We recommend School District 12 Education Foundation (dba Five Star Education Foundation) review their policies and procedures related to the yearend financial reporting process and the related controls are properly implemented to ensure accrual basis financial reporting can be achieved. View of Responsible Officials: School District 12 Education Foundation (dba Five Star Education Foundation) agrees with the finding and recommendation and has put together a corrective action plan that is included in this report.

School District 12 Education Foundation (dba Five Star Education Foundation) does not prepare a schedule of expenditures of federal awards required by Uniform Guidance.

Internal controls, for example approval of transactions charged to the grant, should be documented to prove the transaction is allowable, within the period of performance required by the grant and is within procurement policies established by Uniform Guidance.