The Putnam County School Department provides services to homeless students through federal grants including Education for Homeless Children and Youth (FAL No. 84.196) and COVID 19 - Education Stabilization Fund (ESSER I and II - FAL No. 84.425W). During our review of expenditures from these grant funds, we noted purchases of prepaid gift cards. We expanded our review of these gift card purchases and it appears gift cards are an allowable method of using funds from these grants to purchase items such as gas, lodging, clothing, shoes, and food for students and families in need. While such uses appear to be allowable, we noted deficiencies related to the handling of gift cards which are detailed below. We reviewed the purchase and use of gift cards between July 1, 2022, and September 18, 2023.
Gift cards totaling $27,500 were purchased from three separate grants during the year examined. A. The gift card purchases were not separated by grant but were instead comingled into a single accordion file. When using a card, school personnel simply pulled cards from the accordion file and did not distinguish which grant program had purchased the card. Also, documentation of purchases made with the cards, regardless of the grant, were comingled in a file folder and were not identified by student/family served or by school personnel who made the purchase. Upon request from auditors, school personnel separated the documentation trying to match vendor receipts with the appropriate gift cards. This process took days to complete and resulted in a list of gift cards purchased and a separate list of documentation of items purchased with gift cards by year. However, this listing still did not document which grant was used for the purchase.
B. The school department failed to adequately report the gift cards in the accounting records. The department reported grant expenditures and claimed reimbursement of grant funds when the gift cards were purchased instead of when the cards were used.
C. The school department failed to adequately document all purchases made with gift cards. Upon request by auditors, school personnel began gathering documentation to support the use of the cards. They were able to compile documentation for most of the purchases; however, some of the documentation consisted only of handwritten “sticky notes” presumably attached to the file by the school employee that used the card(s). The documentation produced by the school department and provided to auditors is itemized in the following schedule:
It should also be noted that much of the documentation provided to auditors did not contain complete information regarding the student/family served, the product purchased, or the school employee who made the purchase. Without adequate documentation, we could not determine if the cards were used in accordance with grant requirements.
D. Gift cards purchased by the department were not properly safeguarded prior to their use. Cards were maintained in a location that allowed all staff members of the school department’s Student Support Center to have access to them. As employees needed funds for homeless assistance, they were able to remove cards from an accordion file in the office without documenting that cards were taken, who took them, or for what use they were being taken. Failure to safeguard these cards results in a loss of control over their use.
E. The school department purchased gift cards in bulk and requested grant reimbursement when the gift cards were purchased rather than when they were used to provide goods or services for students/families. Prior the end of the grant reporting period, the department purchased cards in the amount of the unused portion of the grant to maintain them on hand for future purchases. As noted above, gift cards totaling at least $6,450 (purchases made between 7/1/23 to 9/18/23 of $4,861 and cards on hand 9/18/23 of $1,589) were unused and on hand at June 30, 2023. The practice of buying the cards at the end of the period and holding them for later use appears to violate the grant’s period of availability of funds.
As a combined result of these deficiencies, we are questioning the entire amount spent on gift cards of $27,500.
The Putnam County School Department provides services to homeless students through federal grants including Education for Homeless Children and Youth (FAL No. 84.196) and COVID 19 - Education Stabilization Fund (ESSER I and II - FAL No. 84.425W). During our review of expenditures from these grant funds, we noted purchases of prepaid gift cards. We expanded our review of these gift card purchases and it appears gift cards are an allowable method of using funds from these grants to purchase items such as gas, lodging, clothing, shoes, and food for students and families in need. While such uses appear to be allowable, we noted deficiencies related to the handling of gift cards which are detailed below. We reviewed the purchase and use of gift cards between July 1, 2022, and September 18, 2023.
Gift cards totaling $27,500 were purchased from three separate grants during the year examined. A. The gift card purchases were not separated by grant but were instead comingled into a single accordion file. When using a card, school personnel simply pulled cards from the accordion file and did not distinguish which grant program had purchased the card. Also, documentation of purchases made with the cards, regardless of the grant, were comingled in a file folder and were not identified by student/family served or by school personnel who made the purchase. Upon request from auditors, school personnel separated the documentation trying to match vendor receipts with the appropriate gift cards. This process took days to complete and resulted in a list of gift cards purchased and a separate list of documentation of items purchased with gift cards by year. However, this listing still did not document which grant was used for the purchase.
B. The school department failed to adequately report the gift cards in the accounting records. The department reported grant expenditures and claimed reimbursement of grant funds when the gift cards were purchased instead of when the cards were used.
C. The school department failed to adequately document all purchases made with gift cards. Upon request by auditors, school personnel began gathering documentation to support the use of the cards. They were able to compile documentation for most of the purchases; however, some of the documentation consisted only of handwritten “sticky notes” presumably attached to the file by the school employee that used the card(s). The documentation produced by the school department and provided to auditors is itemized in the following schedule:
It should also be noted that much of the documentation provided to auditors did not contain complete information regarding the student/family served, the product purchased, or the school employee who made the purchase. Without adequate documentation, we could not determine if the cards were used in accordance with grant requirements.
D. Gift cards purchased by the department were not properly safeguarded prior to their use. Cards were maintained in a location that allowed all staff members of the school department’s Student Support Center to have access to them. As employees needed funds for homeless assistance, they were able to remove cards from an accordion file in the office without documenting that cards were taken, who took them, or for what use they were being taken. Failure to safeguard these cards results in a loss of control over their use.
E. The school department purchased gift cards in bulk and requested grant reimbursement when the gift cards were purchased rather than when they were used to provide goods or services for students/families. Prior the end of the grant reporting period, the department purchased cards in the amount of the unused portion of the grant to maintain them on hand for future purchases. As noted above, gift cards totaling at least $6,450 (purchases made between 7/1/23 to 9/18/23 of $4,861 and cards on hand 9/18/23 of $1,589) were unused and on hand at June 30, 2023. The practice of buying the cards at the end of the period and holding them for later use appears to violate the grant’s period of availability of funds.
As a combined result of these deficiencies, we are questioning the entire amount spent on gift cards of $27,500.
The Putnam County School Department provides services to homeless students through federal grants including Education for Homeless Children and Youth (FAL No. 84.196) and COVID 19 - Education Stabilization Fund (ESSER I and II - FAL No. 84.425W). During our review of expenditures from these grant funds, we noted purchases of prepaid gift cards. We expanded our review of these gift card purchases and it appears gift cards are an allowable method of using funds from these grants to purchase items such as gas, lodging, clothing, shoes, and food for students and families in need. While such uses appear to be allowable, we noted deficiencies related to the handling of gift cards which are detailed below. We reviewed the purchase and use of gift cards between July 1, 2022, and September 18, 2023.
Gift cards totaling $27,500 were purchased from three separate grants during the year examined. A. The gift card purchases were not separated by grant but were instead comingled into a single accordion file. When using a card, school personnel simply pulled cards from the accordion file and did not distinguish which grant program had purchased the card. Also, documentation of purchases made with the cards, regardless of the grant, were comingled in a file folder and were not identified by student/family served or by school personnel who made the purchase. Upon request from auditors, school personnel separated the documentation trying to match vendor receipts with the appropriate gift cards. This process took days to complete and resulted in a list of gift cards purchased and a separate list of documentation of items purchased with gift cards by year. However, this listing still did not document which grant was used for the purchase.
B. The school department failed to adequately report the gift cards in the accounting records. The department reported grant expenditures and claimed reimbursement of grant funds when the gift cards were purchased instead of when the cards were used.
C. The school department failed to adequately document all purchases made with gift cards. Upon request by auditors, school personnel began gathering documentation to support the use of the cards. They were able to compile documentation for most of the purchases; however, some of the documentation consisted only of handwritten “sticky notes” presumably attached to the file by the school employee that used the card(s). The documentation produced by the school department and provided to auditors is itemized in the following schedule:
It should also be noted that much of the documentation provided to auditors did not contain complete information regarding the student/family served, the product purchased, or the school employee who made the purchase. Without adequate documentation, we could not determine if the cards were used in accordance with grant requirements.
D. Gift cards purchased by the department were not properly safeguarded prior to their use. Cards were maintained in a location that allowed all staff members of the school department’s Student Support Center to have access to them. As employees needed funds for homeless assistance, they were able to remove cards from an accordion file in the office without documenting that cards were taken, who took them, or for what use they were being taken. Failure to safeguard these cards results in a loss of control over their use.
E. The school department purchased gift cards in bulk and requested grant reimbursement when the gift cards were purchased rather than when they were used to provide goods or services for students/families. Prior the end of the grant reporting period, the department purchased cards in the amount of the unused portion of the grant to maintain them on hand for future purchases. As noted above, gift cards totaling at least $6,450 (purchases made between 7/1/23 to 9/18/23 of $4,861 and cards on hand 9/18/23 of $1,589) were unused and on hand at June 30, 2023. The practice of buying the cards at the end of the period and holding them for later use appears to violate the grant’s period of availability of funds.
As a combined result of these deficiencies, we are questioning the entire amount spent on gift cards of $27,500.
The Putnam County School Department provides services to homeless students through federal grants including Education for Homeless Children and Youth (FAL No. 84.196) and COVID 19 - Education Stabilization Fund (ESSER I and II - FAL No. 84.425W). During our review of expenditures from these grant funds, we noted purchases of prepaid gift cards. We expanded our review of these gift card purchases and it appears gift cards are an allowable method of using funds from these grants to purchase items such as gas, lodging, clothing, shoes, and food for students and families in need. While such uses appear to be allowable, we noted deficiencies related to the handling of gift cards which are detailed below. We reviewed the purchase and use of gift cards between July 1, 2022, and September 18, 2023.
Gift cards totaling $27,500 were purchased from three separate grants during the year examined. A. The gift card purchases were not separated by grant but were instead comingled into a single accordion file. When using a card, school personnel simply pulled cards from the accordion file and did not distinguish which grant program had purchased the card. Also, documentation of purchases made with the cards, regardless of the grant, were comingled in a file folder and were not identified by student/family served or by school personnel who made the purchase. Upon request from auditors, school personnel separated the documentation trying to match vendor receipts with the appropriate gift cards. This process took days to complete and resulted in a list of gift cards purchased and a separate list of documentation of items purchased with gift cards by year. However, this listing still did not document which grant was used for the purchase.
B. The school department failed to adequately report the gift cards in the accounting records. The department reported grant expenditures and claimed reimbursement of grant funds when the gift cards were purchased instead of when the cards were used.
C. The school department failed to adequately document all purchases made with gift cards. Upon request by auditors, school personnel began gathering documentation to support the use of the cards. They were able to compile documentation for most of the purchases; however, some of the documentation consisted only of handwritten “sticky notes” presumably attached to the file by the school employee that used the card(s). The documentation produced by the school department and provided to auditors is itemized in the following schedule:
It should also be noted that much of the documentation provided to auditors did not contain complete information regarding the student/family served, the product purchased, or the school employee who made the purchase. Without adequate documentation, we could not determine if the cards were used in accordance with grant requirements.
D. Gift cards purchased by the department were not properly safeguarded prior to their use. Cards were maintained in a location that allowed all staff members of the school department’s Student Support Center to have access to them. As employees needed funds for homeless assistance, they were able to remove cards from an accordion file in the office without documenting that cards were taken, who took them, or for what use they were being taken. Failure to safeguard these cards results in a loss of control over their use.
E. The school department purchased gift cards in bulk and requested grant reimbursement when the gift cards were purchased rather than when they were used to provide goods or services for students/families. Prior the end of the grant reporting period, the department purchased cards in the amount of the unused portion of the grant to maintain them on hand for future purchases. As noted above, gift cards totaling at least $6,450 (purchases made between 7/1/23 to 9/18/23 of $4,861 and cards on hand 9/18/23 of $1,589) were unused and on hand at June 30, 2023. The practice of buying the cards at the end of the period and holding them for later use appears to violate the grant’s period of availability of funds.
As a combined result of these deficiencies, we are questioning the entire amount spent on gift cards of $27,500.