School of Excellence in Education dba Legacy Traditional Schools - Texas

Finding No. 2025‐001: Allowable Costs and Activities - Significant deficiency in internal control over compliance and compliance finding. Child Nutrition Cluster Criteria: Section 200 of the Code of Federal Regulations requires recipients to implement robust internal controls to ensure compliance with cost principles for all activities allocated to the grant. Condition: During allowable cost and activities testing for the Child Nutrition Cluster, 3 out of 26 payroll transactions tested included employee time that was unrelated to approved grant activities. Cause: The School's internal controls related to employee time were not operating effectively and employee mistakes in coding did not get detected and corrected in a timely manner. Effect: Employee time was allocated to the Child Nutrition Cluster when the employee was not in a position that was related to grant activities. Questioned Costs: None Recommendation: Management should reassess their internal controls related to employee time approval to ensure it is sufficient to appropriately detect and correct any error in fund coding. Management’s Response: See corrective action plan.

Finding 2024‐003: Allowable costs – Significant deficiency in internal control over compliance and compliance finding. Title I Grants to Local Educational Agencies ALN 84.010 Criteria: Section 200 of the Code of Federal Regulations requires recipients to implement robust internal controls to ensure compliance with cost principles for all transactions charged to the grant. Condition: During allowable cost testing for federal grants, for 3 out of 17 payroll transactions tested, the amount charged to the grant did not agree to actual time and effort. Cause: Funding percentages in the accounting system did not match the actual time and effort per the semi‐annual time and effort certification logs. Effect: The School's reporting of grant time and effort was not fully documented, in accordance with internal control over compliance procedures. The cumulative effect of the exceptions noted during tested resulted in the grants being undercharged by the School. Questioned Costs: None Recommendation:  Management  should  ensure  amount  charged  to  the  grants  agree  to  the  approved percentage per the semi‐annual time and effort certification logs before the request for reimbursement is submitted.

Finding 2024‐004: Reporting – Significant deficiency in internal control over compliance. Child Nutrition Cluster 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, 1 out of 4 monthly claims for reimbursements did not have documented support of review and approval prior to the claim being submitted. Cause: The School did not have a standard procedure in place to document management’s review and approval for monthly claims for reimbursements. Effect: The Organization’s reporting of monthly claims for reimbursement are not fully documented in accordance with internal control procedures over compliance. Questioned Costs: None Recommendation: Management should implement controls to ensure related documentation of approval for all monthly claims for reimbursement prior to submission.