FAC Explorer

Audit 2150

FY End
2023-06-30
Total Expended
$8.51M
Findings
24
Programs
13
Organization: Ecorse Public Schools (MI)
Year: 2023 Accepted: 2023-11-02
Auditor: Yeo & Yeo PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
1127 2023-002 Material Weakness Yes L
1128 2023-002 Material Weakness Yes L
1129 2023-002 Material Weakness Yes L
1130 2023-002 Material Weakness Yes L
1131 2023-003 Material Weakness Yes A
1132 2023-003 Material Weakness Yes A
1133 2023-003 Material Weakness Yes A
1134 2023-003 Material Weakness Yes A
1135 2023-004 Material Weakness - A
1136 2023-004 Material Weakness - A
1137 2023-004 Material Weakness - A
1138 2023-004 Material Weakness - A
577569 2023-002 Material Weakness Yes L
577570 2023-002 Material Weakness Yes L
577571 2023-002 Material Weakness Yes L
577572 2023-002 Material Weakness Yes L
577573 2023-003 Material Weakness Yes A
577574 2023-003 Material Weakness Yes A
577575 2023-003 Material Weakness Yes A
577576 2023-003 Material Weakness Yes A
577577 2023-004 Material Weakness - A
577578 2023-004 Material Weakness - A
577579 2023-004 Material Weakness - A
577580 2023-004 Material Weakness - A

Programs

ALN Program Spent Major Findings
84.425 Education Stabilization Fund $5.65M Yes 3
84.010 Title I Grants to Local Educational Agencies $1.05M Yes 3
10.555 National School Lunch Program $505,059 - 0
84.027 Special Education_grants to States $299,988 - 0
10.553 School Breakfast Program $238,370 - 0
84.367 Improving Teacher Quality State Grants $163,420 - 0
93.778 Medical Assistance Program $89,210 - 0
84.424 Student Support and Academic Enrichment Program $60,150 - 0
10.559 Summer Food Service Program for Children $33,037 - 0
32.009 Emergency Connectivity Fund Program $21,224 - 0
84.365 English Language Acquisition State Grants $9,917 - 0
10.558 Child and Adult Care Food Program $4,536 - 0
10.649 Pandemic Ebt Administrative Costs $3,135 - 0

Contacts

Name Title Type
DYLVRC3ACAK4 Charles Moore Auditee
5172023867 Timothy P Crosson JR Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, where certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures inprior years. De Minimis Rate Used: N Rate Explanation: Ecorse Public Schools has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Ecorse Public Schools under programs of the federal government for the year ended June 30, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Ecorse Public Schools, it is not intended to and does not present the financial position, changes in net assets, or cash flows of Ecorse Public Schools.
Title: Reconciliation to the Financial Statements Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, where certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures inprior years. De Minimis Rate Used: N Rate Explanation: Ecorse Public Schools has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. The School District’s federal revenues per the financial statements agree to the schedule of expenditures of federal awards.
Title: Michigan Department of Education Disclosures Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, where certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures inprior years. De Minimis Rate Used: N Rate Explanation: Ecorse Public Schools has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. The amounts reported on the recipient entitlement balance report agree with the schedule of expenditures of federal awards for U.S.D.A. donated food commodities. The federal amounts reported on the CMS Grant Auditor Report (GAR) are in agreement with the SEFA except for the following caused by the timing of cash receipts: See the Notes to the SEFA for the chart/table.
Title: Subrecipients Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, where certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures inprior years. De Minimis Rate Used: N Rate Explanation: Ecorse Public Schools has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. No amounts were provided to subrecipients.

Finding Details

Finding 2023-002
Finding 2023-002, 2022-002: Reporting - Chart of Accounts Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: None Context / Criteria: Transactions need to be recorded based on the Michigan School Accounting Manual. The manual has the appropriate account classification with regard to account code dimensions (fund, function, major class, and object code). Condition: During our review of revenue and expenditures, we noted transactions are not being recorded to the appropriate revenue and expense accounts based on the Michigan School Accounting Manual for function, major class and object code. These inconsistencies could have affected the filing of Federal Expenditure Reports and caused budget-to-actual differences that could have been undetected by management. Cause / Effect: The School District did not have adequate controls in place to ensure transactions were being recorded to the proper accounts based on function, major class, and object code. The lack of consistency caused unnecessary variations between the accounting records and required reporting for final expenditure reports. Recommendation: We recommend the School District review the Michigan School Accounting Manual and follow the guidelines for recording transaction with appropriate account classifications. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-002
Finding 2023-002, 2022-002: Reporting - Chart of Accounts Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: None Context / Criteria: Transactions need to be recorded based on the Michigan School Accounting Manual. The manual has the appropriate account classification with regard to account code dimensions (fund, function, major class, and object code). Condition: During our review of revenue and expenditures, we noted transactions are not being recorded to the appropriate revenue and expense accounts based on the Michigan School Accounting Manual for function, major class and object code. These inconsistencies could have affected the filing of Federal Expenditure Reports and caused budget-to-actual differences that could have been undetected by management. Cause / Effect: The School District did not have adequate controls in place to ensure transactions were being recorded to the proper accounts based on function, major class, and object code. The lack of consistency caused unnecessary variations between the accounting records and required reporting for final expenditure reports. Recommendation: We recommend the School District review the Michigan School Accounting Manual and follow the guidelines for recording transaction with appropriate account classifications. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-002
Finding 2023-002, 2022-002: Reporting - Chart of Accounts Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: None Context / Criteria: Transactions need to be recorded based on the Michigan School Accounting Manual. The manual has the appropriate account classification with regard to account code dimensions (fund, function, major class, and object code). Condition: During our review of revenue and expenditures, we noted transactions are not being recorded to the appropriate revenue and expense accounts based on the Michigan School Accounting Manual for function, major class and object code. These inconsistencies could have affected the filing of Federal Expenditure Reports and caused budget-to-actual differences that could have been undetected by management. Cause / Effect: The School District did not have adequate controls in place to ensure transactions were being recorded to the proper accounts based on function, major class, and object code. The lack of consistency caused unnecessary variations between the accounting records and required reporting for final expenditure reports. Recommendation: We recommend the School District review the Michigan School Accounting Manual and follow the guidelines for recording transaction with appropriate account classifications. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-002
Finding 2023-002, 2022-002: Reporting - Chart of Accounts Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: None Context / Criteria: Transactions need to be recorded based on the Michigan School Accounting Manual. The manual has the appropriate account classification with regard to account code dimensions (fund, function, major class, and object code). Condition: During our review of revenue and expenditures, we noted transactions are not being recorded to the appropriate revenue and expense accounts based on the Michigan School Accounting Manual for function, major class and object code. These inconsistencies could have affected the filing of Federal Expenditure Reports and caused budget-to-actual differences that could have been undetected by management. Cause / Effect: The School District did not have adequate controls in place to ensure transactions were being recorded to the proper accounts based on function, major class, and object code. The lack of consistency caused unnecessary variations between the accounting records and required reporting for final expenditure reports. Recommendation: We recommend the School District review the Michigan School Accounting Manual and follow the guidelines for recording transaction with appropriate account classifications. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-003
Finding 2023-003, 2022-001: Allowable Activities - Payroll Documentation and Reconciliation Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: Unknown Context / Criteria: The School District determines salary and hourly rates based on contractual agreements and other approved rates and charges these expenses to grants in accordance with approved grant agreements. The School District’s payroll processing should maintain internal controls sufficient to pay employees at agreed amounts, ensure timely changes to agreed amounts, and that amounts are charged to the correct grants in compliance with approved budgets. Condition: During our payroll testing we noted that 13 payments to employees charged to Title I and 10 payments to employees charged to ESSER were not paid based on approved rates. It was also noted that 3 employees charged to ESSER were not charged to the correct expense accounts based on their position changes. Additionally, it was noted that a bonus charged to the Title I grant was unallowable. Cause / Effect: The School District did not maintain sufficient procedures to ensure changes in pay rates were communicated to the appropriate departments for payroll processing. Employees could have been over or under-paid as a result. Additionally, the School District did not maintain sufficient procedures to ensure all expenses charged to the grant were allowable based on the approved budget. Recommendation: We recommend the School District document annual pay rates and increases within each personnel file and those pay rates should be communicated to the payroll department to ensure the changes are made within the payroll software. The payroll register should be reviewed before payroll is processed and paid. Additionally, the School District should review all expenditures to ensure the expense is allowable and monitor budget to actual more closely. The School District should ensure the budget used for this comparison agrees to the approved grant budget. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-003
Finding 2023-003, 2022-001: Allowable Activities - Payroll Documentation and Reconciliation Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: Unknown Context / Criteria: The School District determines salary and hourly rates based on contractual agreements and other approved rates and charges these expenses to grants in accordance with approved grant agreements. The School District’s payroll processing should maintain internal controls sufficient to pay employees at agreed amounts, ensure timely changes to agreed amounts, and that amounts are charged to the correct grants in compliance with approved budgets. Condition: During our payroll testing we noted that 13 payments to employees charged to Title I and 10 payments to employees charged to ESSER were not paid based on approved rates. It was also noted that 3 employees charged to ESSER were not charged to the correct expense accounts based on their position changes. Additionally, it was noted that a bonus charged to the Title I grant was unallowable. Cause / Effect: The School District did not maintain sufficient procedures to ensure changes in pay rates were communicated to the appropriate departments for payroll processing. Employees could have been over or under-paid as a result. Additionally, the School District did not maintain sufficient procedures to ensure all expenses charged to the grant were allowable based on the approved budget. Recommendation: We recommend the School District document annual pay rates and increases within each personnel file and those pay rates should be communicated to the payroll department to ensure the changes are made within the payroll software. The payroll register should be reviewed before payroll is processed and paid. Additionally, the School District should review all expenditures to ensure the expense is allowable and monitor budget to actual more closely. The School District should ensure the budget used for this comparison agrees to the approved grant budget. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-003
Finding 2023-003, 2022-001: Allowable Activities - Payroll Documentation and Reconciliation Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: Unknown Context / Criteria: The School District determines salary and hourly rates based on contractual agreements and other approved rates and charges these expenses to grants in accordance with approved grant agreements. The School District’s payroll processing should maintain internal controls sufficient to pay employees at agreed amounts, ensure timely changes to agreed amounts, and that amounts are charged to the correct grants in compliance with approved budgets. Condition: During our payroll testing we noted that 13 payments to employees charged to Title I and 10 payments to employees charged to ESSER were not paid based on approved rates. It was also noted that 3 employees charged to ESSER were not charged to the correct expense accounts based on their position changes. Additionally, it was noted that a bonus charged to the Title I grant was unallowable. Cause / Effect: The School District did not maintain sufficient procedures to ensure changes in pay rates were communicated to the appropriate departments for payroll processing. Employees could have been over or under-paid as a result. Additionally, the School District did not maintain sufficient procedures to ensure all expenses charged to the grant were allowable based on the approved budget. Recommendation: We recommend the School District document annual pay rates and increases within each personnel file and those pay rates should be communicated to the payroll department to ensure the changes are made within the payroll software. The payroll register should be reviewed before payroll is processed and paid. Additionally, the School District should review all expenditures to ensure the expense is allowable and monitor budget to actual more closely. The School District should ensure the budget used for this comparison agrees to the approved grant budget. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-003
Finding 2023-003, 2022-001: Allowable Activities - Payroll Documentation and Reconciliation Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: Unknown Context / Criteria: The School District determines salary and hourly rates based on contractual agreements and other approved rates and charges these expenses to grants in accordance with approved grant agreements. The School District’s payroll processing should maintain internal controls sufficient to pay employees at agreed amounts, ensure timely changes to agreed amounts, and that amounts are charged to the correct grants in compliance with approved budgets. Condition: During our payroll testing we noted that 13 payments to employees charged to Title I and 10 payments to employees charged to ESSER were not paid based on approved rates. It was also noted that 3 employees charged to ESSER were not charged to the correct expense accounts based on their position changes. Additionally, it was noted that a bonus charged to the Title I grant was unallowable. Cause / Effect: The School District did not maintain sufficient procedures to ensure changes in pay rates were communicated to the appropriate departments for payroll processing. Employees could have been over or under-paid as a result. Additionally, the School District did not maintain sufficient procedures to ensure all expenses charged to the grant were allowable based on the approved budget. Recommendation: We recommend the School District document annual pay rates and increases within each personnel file and those pay rates should be communicated to the payroll department to ensure the changes are made within the payroll software. The payroll register should be reviewed before payroll is processed and paid. Additionally, the School District should review all expenditures to ensure the expense is allowable and monitor budget to actual more closely. The School District should ensure the budget used for this comparison agrees to the approved grant budget. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-004
Finding 2023-004: Allowable Activities - Journal Entries and Expenditure Documentation Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: Unknown Context / Criteria: Journal entries should be supported by all other elements required by Uniform Guidance and the School District’s internal controls such as invoices, purchase orders, and approvals. Additionally, the journal entry should be in accordance with the requirements of the award such as, be for non-duplicative costs, appropriate for the account used and be necessary and allowable. Condition: During our disbursement testing we noted 13 journal entries for Education Stabilization Fund and 6 journal entries for Title I that lacked specific invoices with the above-mentioned documentation. Sufficient reconciliations and/or invoices were not provided. Cause / Effect: The School District posted certain expenditures based on budget or up-to-allowable budget. Additionally, expenditures were posted to funding sources and moved by journal entry to another funding source. The School District should maintain sufficient documentation (including invoices) and approvals for each journal entry to ensure the underlying costs are appropriately supported, approved by management and in accordance with the awards. This will also reduce the likelihood the same invoices are not used to support journal entries for two different funding sources which could cause the School District to request reimbursement for unsupported expenditures. Recommendation: We recommend management review each purchase to ensure it is supported by proper documentation and is properly approved prior to payment. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-004
Finding 2023-004: Allowable Activities - Journal Entries and Expenditure Documentation Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: Unknown Context / Criteria: Journal entries should be supported by all other elements required by Uniform Guidance and the School District’s internal controls such as invoices, purchase orders, and approvals. Additionally, the journal entry should be in accordance with the requirements of the award such as, be for non-duplicative costs, appropriate for the account used and be necessary and allowable. Condition: During our disbursement testing we noted 13 journal entries for Education Stabilization Fund and 6 journal entries for Title I that lacked specific invoices with the above-mentioned documentation. Sufficient reconciliations and/or invoices were not provided. Cause / Effect: The School District posted certain expenditures based on budget or up-to-allowable budget. Additionally, expenditures were posted to funding sources and moved by journal entry to another funding source. The School District should maintain sufficient documentation (including invoices) and approvals for each journal entry to ensure the underlying costs are appropriately supported, approved by management and in accordance with the awards. This will also reduce the likelihood the same invoices are not used to support journal entries for two different funding sources which could cause the School District to request reimbursement for unsupported expenditures. Recommendation: We recommend management review each purchase to ensure it is supported by proper documentation and is properly approved prior to payment. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-004
Finding 2023-004: Allowable Activities - Journal Entries and Expenditure Documentation Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: Unknown Context / Criteria: Journal entries should be supported by all other elements required by Uniform Guidance and the School District’s internal controls such as invoices, purchase orders, and approvals. Additionally, the journal entry should be in accordance with the requirements of the award such as, be for non-duplicative costs, appropriate for the account used and be necessary and allowable. Condition: During our disbursement testing we noted 13 journal entries for Education Stabilization Fund and 6 journal entries for Title I that lacked specific invoices with the above-mentioned documentation. Sufficient reconciliations and/or invoices were not provided. Cause / Effect: The School District posted certain expenditures based on budget or up-to-allowable budget. Additionally, expenditures were posted to funding sources and moved by journal entry to another funding source. The School District should maintain sufficient documentation (including invoices) and approvals for each journal entry to ensure the underlying costs are appropriately supported, approved by management and in accordance with the awards. This will also reduce the likelihood the same invoices are not used to support journal entries for two different funding sources which could cause the School District to request reimbursement for unsupported expenditures. Recommendation: We recommend management review each purchase to ensure it is supported by proper documentation and is properly approved prior to payment. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-004
Finding 2023-004: Allowable Activities - Journal Entries and Expenditure Documentation Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: Unknown Context / Criteria: Journal entries should be supported by all other elements required by Uniform Guidance and the School District’s internal controls such as invoices, purchase orders, and approvals. Additionally, the journal entry should be in accordance with the requirements of the award such as, be for non-duplicative costs, appropriate for the account used and be necessary and allowable. Condition: During our disbursement testing we noted 13 journal entries for Education Stabilization Fund and 6 journal entries for Title I that lacked specific invoices with the above-mentioned documentation. Sufficient reconciliations and/or invoices were not provided. Cause / Effect: The School District posted certain expenditures based on budget or up-to-allowable budget. Additionally, expenditures were posted to funding sources and moved by journal entry to another funding source. The School District should maintain sufficient documentation (including invoices) and approvals for each journal entry to ensure the underlying costs are appropriately supported, approved by management and in accordance with the awards. This will also reduce the likelihood the same invoices are not used to support journal entries for two different funding sources which could cause the School District to request reimbursement for unsupported expenditures. Recommendation: We recommend management review each purchase to ensure it is supported by proper documentation and is properly approved prior to payment. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-002
Finding 2023-002, 2022-002: Reporting - Chart of Accounts Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: None Context / Criteria: Transactions need to be recorded based on the Michigan School Accounting Manual. The manual has the appropriate account classification with regard to account code dimensions (fund, function, major class, and object code). Condition: During our review of revenue and expenditures, we noted transactions are not being recorded to the appropriate revenue and expense accounts based on the Michigan School Accounting Manual for function, major class and object code. These inconsistencies could have affected the filing of Federal Expenditure Reports and caused budget-to-actual differences that could have been undetected by management. Cause / Effect: The School District did not have adequate controls in place to ensure transactions were being recorded to the proper accounts based on function, major class, and object code. The lack of consistency caused unnecessary variations between the accounting records and required reporting for final expenditure reports. Recommendation: We recommend the School District review the Michigan School Accounting Manual and follow the guidelines for recording transaction with appropriate account classifications. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-002
Finding 2023-002, 2022-002: Reporting - Chart of Accounts Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: None Context / Criteria: Transactions need to be recorded based on the Michigan School Accounting Manual. The manual has the appropriate account classification with regard to account code dimensions (fund, function, major class, and object code). Condition: During our review of revenue and expenditures, we noted transactions are not being recorded to the appropriate revenue and expense accounts based on the Michigan School Accounting Manual for function, major class and object code. These inconsistencies could have affected the filing of Federal Expenditure Reports and caused budget-to-actual differences that could have been undetected by management. Cause / Effect: The School District did not have adequate controls in place to ensure transactions were being recorded to the proper accounts based on function, major class, and object code. The lack of consistency caused unnecessary variations between the accounting records and required reporting for final expenditure reports. Recommendation: We recommend the School District review the Michigan School Accounting Manual and follow the guidelines for recording transaction with appropriate account classifications. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-002
Finding 2023-002, 2022-002: Reporting - Chart of Accounts Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: None Context / Criteria: Transactions need to be recorded based on the Michigan School Accounting Manual. The manual has the appropriate account classification with regard to account code dimensions (fund, function, major class, and object code). Condition: During our review of revenue and expenditures, we noted transactions are not being recorded to the appropriate revenue and expense accounts based on the Michigan School Accounting Manual for function, major class and object code. These inconsistencies could have affected the filing of Federal Expenditure Reports and caused budget-to-actual differences that could have been undetected by management. Cause / Effect: The School District did not have adequate controls in place to ensure transactions were being recorded to the proper accounts based on function, major class, and object code. The lack of consistency caused unnecessary variations between the accounting records and required reporting for final expenditure reports. Recommendation: We recommend the School District review the Michigan School Accounting Manual and follow the guidelines for recording transaction with appropriate account classifications. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-002
Finding 2023-002, 2022-002: Reporting - Chart of Accounts Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: None Context / Criteria: Transactions need to be recorded based on the Michigan School Accounting Manual. The manual has the appropriate account classification with regard to account code dimensions (fund, function, major class, and object code). Condition: During our review of revenue and expenditures, we noted transactions are not being recorded to the appropriate revenue and expense accounts based on the Michigan School Accounting Manual for function, major class and object code. These inconsistencies could have affected the filing of Federal Expenditure Reports and caused budget-to-actual differences that could have been undetected by management. Cause / Effect: The School District did not have adequate controls in place to ensure transactions were being recorded to the proper accounts based on function, major class, and object code. The lack of consistency caused unnecessary variations between the accounting records and required reporting for final expenditure reports. Recommendation: We recommend the School District review the Michigan School Accounting Manual and follow the guidelines for recording transaction with appropriate account classifications. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-003
Finding 2023-003, 2022-001: Allowable Activities - Payroll Documentation and Reconciliation Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: Unknown Context / Criteria: The School District determines salary and hourly rates based on contractual agreements and other approved rates and charges these expenses to grants in accordance with approved grant agreements. The School District’s payroll processing should maintain internal controls sufficient to pay employees at agreed amounts, ensure timely changes to agreed amounts, and that amounts are charged to the correct grants in compliance with approved budgets. Condition: During our payroll testing we noted that 13 payments to employees charged to Title I and 10 payments to employees charged to ESSER were not paid based on approved rates. It was also noted that 3 employees charged to ESSER were not charged to the correct expense accounts based on their position changes. Additionally, it was noted that a bonus charged to the Title I grant was unallowable. Cause / Effect: The School District did not maintain sufficient procedures to ensure changes in pay rates were communicated to the appropriate departments for payroll processing. Employees could have been over or under-paid as a result. Additionally, the School District did not maintain sufficient procedures to ensure all expenses charged to the grant were allowable based on the approved budget. Recommendation: We recommend the School District document annual pay rates and increases within each personnel file and those pay rates should be communicated to the payroll department to ensure the changes are made within the payroll software. The payroll register should be reviewed before payroll is processed and paid. Additionally, the School District should review all expenditures to ensure the expense is allowable and monitor budget to actual more closely. The School District should ensure the budget used for this comparison agrees to the approved grant budget. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-003
Finding 2023-003, 2022-001: Allowable Activities - Payroll Documentation and Reconciliation Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: Unknown Context / Criteria: The School District determines salary and hourly rates based on contractual agreements and other approved rates and charges these expenses to grants in accordance with approved grant agreements. The School District’s payroll processing should maintain internal controls sufficient to pay employees at agreed amounts, ensure timely changes to agreed amounts, and that amounts are charged to the correct grants in compliance with approved budgets. Condition: During our payroll testing we noted that 13 payments to employees charged to Title I and 10 payments to employees charged to ESSER were not paid based on approved rates. It was also noted that 3 employees charged to ESSER were not charged to the correct expense accounts based on their position changes. Additionally, it was noted that a bonus charged to the Title I grant was unallowable. Cause / Effect: The School District did not maintain sufficient procedures to ensure changes in pay rates were communicated to the appropriate departments for payroll processing. Employees could have been over or under-paid as a result. Additionally, the School District did not maintain sufficient procedures to ensure all expenses charged to the grant were allowable based on the approved budget. Recommendation: We recommend the School District document annual pay rates and increases within each personnel file and those pay rates should be communicated to the payroll department to ensure the changes are made within the payroll software. The payroll register should be reviewed before payroll is processed and paid. Additionally, the School District should review all expenditures to ensure the expense is allowable and monitor budget to actual more closely. The School District should ensure the budget used for this comparison agrees to the approved grant budget. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-003
Finding 2023-003, 2022-001: Allowable Activities - Payroll Documentation and Reconciliation Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: Unknown Context / Criteria: The School District determines salary and hourly rates based on contractual agreements and other approved rates and charges these expenses to grants in accordance with approved grant agreements. The School District’s payroll processing should maintain internal controls sufficient to pay employees at agreed amounts, ensure timely changes to agreed amounts, and that amounts are charged to the correct grants in compliance with approved budgets. Condition: During our payroll testing we noted that 13 payments to employees charged to Title I and 10 payments to employees charged to ESSER were not paid based on approved rates. It was also noted that 3 employees charged to ESSER were not charged to the correct expense accounts based on their position changes. Additionally, it was noted that a bonus charged to the Title I grant was unallowable. Cause / Effect: The School District did not maintain sufficient procedures to ensure changes in pay rates were communicated to the appropriate departments for payroll processing. Employees could have been over or under-paid as a result. Additionally, the School District did not maintain sufficient procedures to ensure all expenses charged to the grant were allowable based on the approved budget. Recommendation: We recommend the School District document annual pay rates and increases within each personnel file and those pay rates should be communicated to the payroll department to ensure the changes are made within the payroll software. The payroll register should be reviewed before payroll is processed and paid. Additionally, the School District should review all expenditures to ensure the expense is allowable and monitor budget to actual more closely. The School District should ensure the budget used for this comparison agrees to the approved grant budget. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-003
Finding 2023-003, 2022-001: Allowable Activities - Payroll Documentation and Reconciliation Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: Unknown Context / Criteria: The School District determines salary and hourly rates based on contractual agreements and other approved rates and charges these expenses to grants in accordance with approved grant agreements. The School District’s payroll processing should maintain internal controls sufficient to pay employees at agreed amounts, ensure timely changes to agreed amounts, and that amounts are charged to the correct grants in compliance with approved budgets. Condition: During our payroll testing we noted that 13 payments to employees charged to Title I and 10 payments to employees charged to ESSER were not paid based on approved rates. It was also noted that 3 employees charged to ESSER were not charged to the correct expense accounts based on their position changes. Additionally, it was noted that a bonus charged to the Title I grant was unallowable. Cause / Effect: The School District did not maintain sufficient procedures to ensure changes in pay rates were communicated to the appropriate departments for payroll processing. Employees could have been over or under-paid as a result. Additionally, the School District did not maintain sufficient procedures to ensure all expenses charged to the grant were allowable based on the approved budget. Recommendation: We recommend the School District document annual pay rates and increases within each personnel file and those pay rates should be communicated to the payroll department to ensure the changes are made within the payroll software. The payroll register should be reviewed before payroll is processed and paid. Additionally, the School District should review all expenditures to ensure the expense is allowable and monitor budget to actual more closely. The School District should ensure the budget used for this comparison agrees to the approved grant budget. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-004
Finding 2023-004: Allowable Activities - Journal Entries and Expenditure Documentation Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: Unknown Context / Criteria: Journal entries should be supported by all other elements required by Uniform Guidance and the School District’s internal controls such as invoices, purchase orders, and approvals. Additionally, the journal entry should be in accordance with the requirements of the award such as, be for non-duplicative costs, appropriate for the account used and be necessary and allowable. Condition: During our disbursement testing we noted 13 journal entries for Education Stabilization Fund and 6 journal entries for Title I that lacked specific invoices with the above-mentioned documentation. Sufficient reconciliations and/or invoices were not provided. Cause / Effect: The School District posted certain expenditures based on budget or up-to-allowable budget. Additionally, expenditures were posted to funding sources and moved by journal entry to another funding source. The School District should maintain sufficient documentation (including invoices) and approvals for each journal entry to ensure the underlying costs are appropriately supported, approved by management and in accordance with the awards. This will also reduce the likelihood the same invoices are not used to support journal entries for two different funding sources which could cause the School District to request reimbursement for unsupported expenditures. Recommendation: We recommend management review each purchase to ensure it is supported by proper documentation and is properly approved prior to payment. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-004
Finding 2023-004: Allowable Activities - Journal Entries and Expenditure Documentation Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: Unknown Context / Criteria: Journal entries should be supported by all other elements required by Uniform Guidance and the School District’s internal controls such as invoices, purchase orders, and approvals. Additionally, the journal entry should be in accordance with the requirements of the award such as, be for non-duplicative costs, appropriate for the account used and be necessary and allowable. Condition: During our disbursement testing we noted 13 journal entries for Education Stabilization Fund and 6 journal entries for Title I that lacked specific invoices with the above-mentioned documentation. Sufficient reconciliations and/or invoices were not provided. Cause / Effect: The School District posted certain expenditures based on budget or up-to-allowable budget. Additionally, expenditures were posted to funding sources and moved by journal entry to another funding source. The School District should maintain sufficient documentation (including invoices) and approvals for each journal entry to ensure the underlying costs are appropriately supported, approved by management and in accordance with the awards. This will also reduce the likelihood the same invoices are not used to support journal entries for two different funding sources which could cause the School District to request reimbursement for unsupported expenditures. Recommendation: We recommend management review each purchase to ensure it is supported by proper documentation and is properly approved prior to payment. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-004
Finding 2023-004: Allowable Activities - Journal Entries and Expenditure Documentation Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: Unknown Context / Criteria: Journal entries should be supported by all other elements required by Uniform Guidance and the School District’s internal controls such as invoices, purchase orders, and approvals. Additionally, the journal entry should be in accordance with the requirements of the award such as, be for non-duplicative costs, appropriate for the account used and be necessary and allowable. Condition: During our disbursement testing we noted 13 journal entries for Education Stabilization Fund and 6 journal entries for Title I that lacked specific invoices with the above-mentioned documentation. Sufficient reconciliations and/or invoices were not provided. Cause / Effect: The School District posted certain expenditures based on budget or up-to-allowable budget. Additionally, expenditures were posted to funding sources and moved by journal entry to another funding source. The School District should maintain sufficient documentation (including invoices) and approvals for each journal entry to ensure the underlying costs are appropriately supported, approved by management and in accordance with the awards. This will also reduce the likelihood the same invoices are not used to support journal entries for two different funding sources which could cause the School District to request reimbursement for unsupported expenditures. Recommendation: We recommend management review each purchase to ensure it is supported by proper documentation and is properly approved prior to payment. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2023-004
Finding 2023-004: Allowable Activities - Journal Entries and Expenditure Documentation Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: Unknown Context / Criteria: Journal entries should be supported by all other elements required by Uniform Guidance and the School District’s internal controls such as invoices, purchase orders, and approvals. Additionally, the journal entry should be in accordance with the requirements of the award such as, be for non-duplicative costs, appropriate for the account used and be necessary and allowable. Condition: During our disbursement testing we noted 13 journal entries for Education Stabilization Fund and 6 journal entries for Title I that lacked specific invoices with the above-mentioned documentation. Sufficient reconciliations and/or invoices were not provided. Cause / Effect: The School District posted certain expenditures based on budget or up-to-allowable budget. Additionally, expenditures were posted to funding sources and moved by journal entry to another funding source. The School District should maintain sufficient documentation (including invoices) and approvals for each journal entry to ensure the underlying costs are appropriately supported, approved by management and in accordance with the awards. This will also reduce the likelihood the same invoices are not used to support journal entries for two different funding sources which could cause the School District to request reimbursement for unsupported expenditures. Recommendation: We recommend management review each purchase to ensure it is supported by proper documentation and is properly approved prior to payment. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.