Audit 19434

Finding 2022-001 ? Allowable Costs/Cost Principles ? Time and Effort Reporting Finding Type: Significant deficiency in internal control over compliance and noncompliance with laws and regulations. Federal Program: Special Education Cluster ALN #: 84.027 and 84.173 Federal Agency: U.S. Department of Education Pass-through Entity: Michigan Department of Education Pass-through Number: 220450, 220493, 221280, 220460, 221285 Criteria: 2 CFR 200.430(i) requires that charges to Federal awards for salaries and wages must be supported by adequate documentation in accordance with the District?s payroll policies. Per the District?s federal policies, the District is required to support payroll charges to federal cost objectives with adequate documentation including personnel activity reports, for those who split their time between multiple cost objectives, and semi-annual time certifications, for those who work 100 percent of their time on a single cost objective. Condition: The District did not maintain adequate support documentation to substantiate salaries and wages charged to the Special Education Cluster resulting in periods of ineffective or absent controls. Questioned Costs: The total charges included in our sample that were not supported by adequate documentation amount to $37,823. Cause: This condition appears to be the result of turnover in personnel who were responsible for obtaining personnel activity reports and semi-annual time certifications for those employees charged to federal cost objectives. Effect: As a result of this condition, the District is unable to adequately support the accuracy of payroll expenditures charged to the grant. Recommendation: The District should adhere to documented time and effort reporting procedures and maintain effective internal controls that ensure salaries and wages allocated to federal cost objectives are based on records that accurately reflect the work performed. District?s Response: The District concurs with the facts of this finding and will continue to establish effective controls to ensure time and effort reporting is consistent with the District?s policies, and that all charges to the grant are adequately supported.

Finding 2022-001 ? Allowable Costs/Cost Principles ? Time and Effort Reporting Finding Type: Significant deficiency in internal control over compliance and noncompliance with laws and regulations. Federal Program: Special Education Cluster ALN #: 84.027 and 84.173 Federal Agency: U.S. Department of Education Pass-through Entity: Michigan Department of Education Pass-through Number: 220450, 220493, 221280, 220460, 221285 Criteria: 2 CFR 200.430(i) requires that charges to Federal awards for salaries and wages must be supported by adequate documentation in accordance with the District?s payroll policies. Per the District?s federal policies, the District is required to support payroll charges to federal cost objectives with adequate documentation including personnel activity reports, for those who split their time between multiple cost objectives, and semi-annual time certifications, for those who work 100 percent of their time on a single cost objective. Condition: The District did not maintain adequate support documentation to substantiate salaries and wages charged to the Special Education Cluster resulting in periods of ineffective or absent controls. Questioned Costs: The total charges included in our sample that were not supported by adequate documentation amount to $37,823. Cause: This condition appears to be the result of turnover in personnel who were responsible for obtaining personnel activity reports and semi-annual time certifications for those employees charged to federal cost objectives. Effect: As a result of this condition, the District is unable to adequately support the accuracy of payroll expenditures charged to the grant. Recommendation: The District should adhere to documented time and effort reporting procedures and maintain effective internal controls that ensure salaries and wages allocated to federal cost objectives are based on records that accurately reflect the work performed. District?s Response: The District concurs with the facts of this finding and will continue to establish effective controls to ensure time and effort reporting is consistent with the District?s policies, and that all charges to the grant are adequately supported.