Audit 20261

2022-001 ? Material Weakness and Material Noncompliance ? Budget Variances / Allowable Costs Program information: Education Stabilization Fund, U.S. Department of Education, passed through Michigan Department of Education, AL #84.425, Passthrough grantor numbers 213712 and 213713. Criteria: Sections 18 and 19 (MCL 141.438 and 141.439) of the Uniform Budgeting and Accounting Act state that an administrative officer of the local unit shall not incur expenditures against an appropriation account in excess of the amount appropriated by the legislative body. Additionally, the chief administrative officer, an administrative officer, or an employee of the local unit shall not apply or divert money for purposes inconsistent with those specified in the appropriations. Condition: Material budget overages were noted in total expenses in the General Fund and Food Service Fund. A material overage was noted in the General Fund for operations and maintenance and in the Food Service Fund for food costs. A material overage was noted in the Education Stabilization Fund for instructional staff and elementary devices. There also was a material budget overage in the Education Stabilization Fund in salaries, benefits and capital outlay when compared to the MEGS budget. Questioned costs: None Cause and effect: Management failed to analyze actual food service expenses and operations and maintenance payments when amending the final budget for the Food Service Fund and General Fund, respectively. Recommendation: We recommend that management monitor the budget throughout the year and follow the established policies regarding budget preparation and implementation. Views of responsible officials: Management agrees with the finding. Corrective action plan: See attached corrective action plan.

2022-001 ? Material Weakness and Material Noncompliance ? Budget Variances / Allowable Costs Program information: Education Stabilization Fund, U.S. Department of Education, passed through Michigan Department of Education, AL #84.425, Passthrough grantor numbers 213712 and 213713. Criteria: Sections 18 and 19 (MCL 141.438 and 141.439) of the Uniform Budgeting and Accounting Act state that an administrative officer of the local unit shall not incur expenditures against an appropriation account in excess of the amount appropriated by the legislative body. Additionally, the chief administrative officer, an administrative officer, or an employee of the local unit shall not apply or divert money for purposes inconsistent with those specified in the appropriations. Condition: Material budget overages were noted in total expenses in the General Fund and Food Service Fund. A material overage was noted in the General Fund for operations and maintenance and in the Food Service Fund for food costs. A material overage was noted in the Education Stabilization Fund for instructional staff and elementary devices. There also was a material budget overage in the Education Stabilization Fund in salaries, benefits and capital outlay when compared to the MEGS budget. Questioned costs: None Cause and effect: Management failed to analyze actual food service expenses and operations and maintenance payments when amending the final budget for the Food Service Fund and General Fund, respectively. Recommendation: We recommend that management monitor the budget throughout the year and follow the established policies regarding budget preparation and implementation. Views of responsible officials: Management agrees with the finding. Corrective action plan: See attached corrective action plan.

2022-001 ? Material Weakness and Material Noncompliance ? Budget Variances / Allowable Costs Program information: Education Stabilization Fund, U.S. Department of Education, passed through Michigan Department of Education, AL #84.425, Passthrough grantor numbers 213712 and 213713. Criteria: Sections 18 and 19 (MCL 141.438 and 141.439) of the Uniform Budgeting and Accounting Act state that an administrative officer of the local unit shall not incur expenditures against an appropriation account in excess of the amount appropriated by the legislative body. Additionally, the chief administrative officer, an administrative officer, or an employee of the local unit shall not apply or divert money for purposes inconsistent with those specified in the appropriations. Condition: Material budget overages were noted in total expenses in the General Fund and Food Service Fund. A material overage was noted in the General Fund for operations and maintenance and in the Food Service Fund for food costs. A material overage was noted in the Education Stabilization Fund for instructional staff and elementary devices. There also was a material budget overage in the Education Stabilization Fund in salaries, benefits and capital outlay when compared to the MEGS budget. Questioned costs: None Cause and effect: Management failed to analyze actual food service expenses and operations and maintenance payments when amending the final budget for the Food Service Fund and General Fund, respectively. Recommendation: We recommend that management monitor the budget throughout the year and follow the established policies regarding budget preparation and implementation. Views of responsible officials: Management agrees with the finding. Corrective action plan: See attached corrective action plan.

2022-001 ? Material Weakness and Material Noncompliance ? Budget Variances / Allowable Costs Program information: Education Stabilization Fund, U.S. Department of Education, passed through Michigan Department of Education, AL #84.425, Passthrough grantor numbers 213712 and 213713. Criteria: Sections 18 and 19 (MCL 141.438 and 141.439) of the Uniform Budgeting and Accounting Act state that an administrative officer of the local unit shall not incur expenditures against an appropriation account in excess of the amount appropriated by the legislative body. Additionally, the chief administrative officer, an administrative officer, or an employee of the local unit shall not apply or divert money for purposes inconsistent with those specified in the appropriations. Condition: Material budget overages were noted in total expenses in the General Fund and Food Service Fund. A material overage was noted in the General Fund for operations and maintenance and in the Food Service Fund for food costs. A material overage was noted in the Education Stabilization Fund for instructional staff and elementary devices. There also was a material budget overage in the Education Stabilization Fund in salaries, benefits and capital outlay when compared to the MEGS budget. Questioned costs: None Cause and effect: Management failed to analyze actual food service expenses and operations and maintenance payments when amending the final budget for the Food Service Fund and General Fund, respectively. Recommendation: We recommend that management monitor the budget throughout the year and follow the established policies regarding budget preparation and implementation. Views of responsible officials: Management agrees with the finding. Corrective action plan: See attached corrective action plan.

2022-001 ? Material Weakness and Material Noncompliance ? Budget Variances / Allowable Costs Program information: Education Stabilization Fund, U.S. Department of Education, passed through Michigan Department of Education, AL #84.425, Passthrough grantor numbers 213712 and 213713. Criteria: Sections 18 and 19 (MCL 141.438 and 141.439) of the Uniform Budgeting and Accounting Act state that an administrative officer of the local unit shall not incur expenditures against an appropriation account in excess of the amount appropriated by the legislative body. Additionally, the chief administrative officer, an administrative officer, or an employee of the local unit shall not apply or divert money for purposes inconsistent with those specified in the appropriations. Condition: Material budget overages were noted in total expenses in the General Fund and Food Service Fund. A material overage was noted in the General Fund for operations and maintenance and in the Food Service Fund for food costs. A material overage was noted in the Education Stabilization Fund for instructional staff and elementary devices. There also was a material budget overage in the Education Stabilization Fund in salaries, benefits and capital outlay when compared to the MEGS budget. Questioned costs: None Cause and effect: Management failed to analyze actual food service expenses and operations and maintenance payments when amending the final budget for the Food Service Fund and General Fund, respectively. Recommendation: We recommend that management monitor the budget throughout the year and follow the established policies regarding budget preparation and implementation. Views of responsible officials: Management agrees with the finding. Corrective action plan: See attached corrective action plan.

2022-001 ? Material Weakness and Material Noncompliance ? Budget Variances / Allowable Costs Program information: Education Stabilization Fund, U.S. Department of Education, passed through Michigan Department of Education, AL #84.425, Passthrough grantor numbers 213712 and 213713. Criteria: Sections 18 and 19 (MCL 141.438 and 141.439) of the Uniform Budgeting and Accounting Act state that an administrative officer of the local unit shall not incur expenditures against an appropriation account in excess of the amount appropriated by the legislative body. Additionally, the chief administrative officer, an administrative officer, or an employee of the local unit shall not apply or divert money for purposes inconsistent with those specified in the appropriations. Condition: Material budget overages were noted in total expenses in the General Fund and Food Service Fund. A material overage was noted in the General Fund for operations and maintenance and in the Food Service Fund for food costs. A material overage was noted in the Education Stabilization Fund for instructional staff and elementary devices. There also was a material budget overage in the Education Stabilization Fund in salaries, benefits and capital outlay when compared to the MEGS budget. Questioned costs: None Cause and effect: Management failed to analyze actual food service expenses and operations and maintenance payments when amending the final budget for the Food Service Fund and General Fund, respectively. Recommendation: We recommend that management monitor the budget throughout the year and follow the established policies regarding budget preparation and implementation. Views of responsible officials: Management agrees with the finding. Corrective action plan: See attached corrective action plan.