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Department of Education State of Hawaii SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued) Fiscal Year Ended June 30, 2005_part1 pot

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Federal Pass-Through Amount CFDA Entity Identifying Federal Provided to Federal Grantor/Pass-through Grantor and Program Title Number Number Expenditures1 Subrecipient U.S.. Federal Gran

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Federal Pass-Through Amount CFDA Entity Identifying Federal Provided to Federal Grantor/Pass-through Grantor and Program Title Number Number Expenditures1 Subrecipient U.S Department of Interior

Passed-through State Governor's Office

Economic, Social, and Political Development of the

Territories and the Freely Associated States 15.875 GR270094 913,479

Total U.S Department of the Interior $ 919,995 $

U.S Department of Justice

Passed-through State Department of Human Services

Part E State Challenge Activities 16.549 JE-FX-00146-2002 14,150

U.S Department of Transportation

Passed-through State Department of Transportation

State and Community Highway Safety 20.600 AL04-02(06-S-01 ) 4,849

163-SA05-07(03-S-01 ) 11,526 AL05-02 (12-S-01) 9,366 Total U.S Department of Transportation 25,741

National Endowment for the Humanities

Total National Endowment for the Humanities 1,189,897

National Science Foundation

Passed-through Maui Economic Development Board

Hands-On Science for Maui (Project SEED) N/A4 ESI-9253304 3,259

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Federal Grantor/Pass-through Grantor and Program Title

Environmental Protection Agency

Federal CFDA Number

Pass-Through Entity Identifying Number

Federal Expenditures1

Amount Provided to Subrecipient

Passed-through State Department of Health

Nonpoint Source Implementation Grants 66.460 C9989423-00-1 $ 70,633 $ _

Total Environmental Protection Agency 70,633

u.s.Department of Education

Title I Grants to Local Educational Agencies 84.010 40,095,587

Title I Program for Neglected and

Special Education Cluster:

Special Education - Children With Disabilities 84.173 1,292,002

Safe and DrugFree School and Community

Safe and DrugFree Schools and Communities

Bilingual Education - Professional Development 84.195 183,644

Eisenhower Professional Development State Grants 84.281 96,076

Twenty-First Century Community Learning Centers 84.287 4,826,222

Native Hawaiian Community-Based Education

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Federal Pass-Through Amount CFDA Entity Identifying Federal Provided to Federal Grantor/Pass-through Grantor and Program Title Number Number ExpendituresI Subrecipient Native Hawaiian Curriculum Development, Teacher

Special Education - State Program Improvement

Special Education - Personnel Preparation to Improve

Services and Results for Children with Disabilities 84.325 29,040

Special Education - Technical Assistance and

Dissemination to Improve Services and Results for

Grants for State Assessments and Related Activities 84.369 2,290,822

184,149,859 545,770 Passed-through Office of the State Director

for Vocational Education

Vocational Education - Basic Grants to States 84.048 V048A020011A 147,533

V048A030011 1,313,094 V048A020011 1,003,793

2,464,420 Tech-Prep Education

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Federal Pass-Through Amount CFDA Entity Identifying Federal Provided to Federal Grantor/Pass-through Grantor and Program Title Number Number ExpendituresI Subrecipient Passed-through State Department of Human Services

Rehabilitation Services - Vocational Rehabilitation

Safe and DrugFree Schools and Communities

283,867 Passed-through Alu Like, Inc

Native Hawaiian Vocational Education 84.259 S362A031 0013 388

309,357 Passed-through University of Hawaii

Gaining Early Awareness and Readiness for

P334S000195-03A 46,978

115,950 Native Hawaiian Special Education 84.221 C010147- mod #2 101,395

C010147-mod #3 1,852,197

1,953,592 Total U.S Department of Education $ 189,632,560 $ 545,770 U.S Department of Health and Human Services

Passed-through State Department of Health

Block Grants for Prevention and Treatment of 93.959 MOA-DOH $ 4,080 $

Substance Abuse

Passed-through State Department of Human Services

Temporary Assistance for Needy Families 93.558 G050001 HTNS 72,847

Child Care and Development Block Grant 93.575 G0100HICCD2 271,755

DHS-05-BESSD-2125 99,412 Total U.S Department of Health and Human Services 482,955

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Federal Pass-Through Amount CFDA Entity Identifying Federal Provided to Federal Grantor/Pass-through Grantor and Program Title Number Number Expenditures1 Subrecipient Corporation for National and Community Service

Cooperative Agreements to Support Comprehensive

School Health Programs to Prevent the Spread of

Passed-through State Department of Labor

Learn and Serve America - School and

60,134 Total Corporation for National and Community Service 800,224

TOTAL FEDERAL GRANT FUND EXPENDITURES $ 247,325,424 $ 7,614,661

1 The accompanying schedule of expenditures of federal awards is prepared on the cash basis of accounting.

2 Expenditures for the Food Donation Program (CDFA No., 10.550) are based on the value of food commodities received.

3 Not applicable.

4 Not available.

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INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED

ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the Auditor

State of Hawaii

We have audited the financial statements of the Department of Education of the State of

Hawaii (DOE), as of and for the fiscal year ended June 30, 2005, and have issued our

report thereon dated February 28, 2006 We conducted our audit in accordance with

auditing standards generally accepted in the United States of America and the

standards applicable to financial audits contained in Government Auditing Standards,

issued by the Comptroller General of the United States

Internal Control Over Financial Reporting

In planning and performing our audit, we considered the DOE's internal control over

financial reporting in order to determine our auditing procedures for the purpose of

expressing our opinion on the financial statements and not to provide an opinion on the

internal control over financial reporting However, we noted certain matters involving the

internal control over financial reporting and its operation that we consider to be

reportable conditions Reportable conditions involve matters coming to our attention

relating to significant deficiencies in the design or operation of the internal control over

financial reporting that, in our judgment, could adversely affect the DOE's ability to

record, process, summarize and report financial data consistent with the assertions of

management in the financial statements Reportable conditions are described in the

accompanying schedule of findings and questioned costs as items 2005-01 to 2005-03

A material weakness is a condition in which the design or operation of one or more of

the internal control components does not reduce to a relatively low level the risk that

misstatements in amounts that would be material in relation to the financial statements

being audited may occur and not be detected within a timely period by employees in the

normal course of performing their assigned functions Our consideration of the internal

control over financial reporting would not necessarily disclose all matters in the internal

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control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses However, we believe that none of the reportable conditions described above is a material weakness We also noted other matters involving the internal control over financial reporting, which we have reported to the management of the DOE in a separate letter dated February 28, 2006.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the DOE's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, including applicable provisions of the Hawaii Public Procurement Code (Chapter 103D of the

noncompliance with which could have a direct and material effect on the determination

of financial statement amounts However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported underGovernment Auditing Standards.

This report is intended solely for the information and use of management, federal awarding agencies and pass-through entities and is not intended to be and should not

be used by anyone other than these specified parties.

Honolulu, Hawaii

February 28, 2006

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PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE

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INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH REQUIREMENTS

APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER

To the Auditor

State of Hawaii

Compliance

We have audited the compliance of the Department of Education of the State of Hawaii

(DOE) with the types of compliance requirements described in the U.S Office of

Management and Budget (OMB) Circular A-133 Compliance Supplement that are

applicable to each of its major federal programs for the fiscal year ended June 30, 2005

The DOE's major federal programs are identified in the summary of auditors' results

section of the accompanying schedule of findings and questioned costs Compliance

with the requirements of laws, regulations, contracts and grants applicable to each of its

major federal programs is the responsibility of the DOE's management Our

responsibility is to express an opinion on the DOE's compliance based on our audit

We conducted our audit of compliance in accordance with auditing standards generally

accepted in the United States of America; the standards applicable to financial audits

contained in Government Auditing Standards, issued by the Comptroller General of the

United States; and OMB Circular A-133, AuditsofStates, Local Governments, and

Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and

perform the audit to obtain reasonable assurance about whether noncompliance with

the types of compliance requirements referred to above that could have a direct and

material effect on a major federal program occurred An audit includes examining, on a

test basis, evidence about the DOE's compliance with those requirements and

performing such other procedures as we considered necessary in the circumstances

We believe that our audit provides a reasonable basis for our opinion Our audit does

not provide a legal determination on the DOE's compliance with those requirements

In our opinion, the DOE complied, in all material respects, with the requirements

referred to above that are applicable to each of its major federal programs for the fiscal

year ended June 30, 2005 However, the results of our auditing procedures disclosed

instances of noncompliance with those requirements, which are required to be reported

in accordance with OMB Circular A-133 and which are described in the accompanying

schedule of findings and questioned costs as items 2005-04 to 2005-05

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