Audit 26899

2 CFR ? 3474 gives regulatory effect to the Department of Education for 2 CFR ? 200.430, which provides, in part, compensation for personal services includes all remuneration, paid currently or accrued, for services of employees rendered during the period of performance under the Federal award, including but not necessarily limited to wages and salaries. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non- Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. 2 CFR ? 200.303 requires a non-Federal entity receiving federal awards to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. During our testing of the Education Stabilization Fund grant program, we noted the internal controls over allowable costs and activities of payroll expenditures charged to the grant were not designed effectively to detect errors in rates paid. Our test detected that two out of eight employee paychecks charged to the grant were based on rates that did not agree with the approved pay rates. These two employees were overpaid by a total of $399 (see Finding 2022-003). The Educational Service Center should implement a control process that verifies wages charged to federal programs agree to approved pay rates. This will help to ensure the Educational Service Center is in compliance with Federal grant requirements for allowable costs. Failure to do so could result in future questioned costs and loss of federal grant funding.

2 CFR ? 3474 gives regulatory effect to the Department of Education for 2 CFR ? 200.430, which provides, in part, compensation for personal services includes all remuneration, paid currently or accrued, for services of employees rendered during the period of performance under the Federal award, including but not necessarily limited to wages and salaries. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non- Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. 2 CFR ? 200.303 requires a non-Federal entity receiving federal awards to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. During our testing of the Education Stabilization Fund grant program, we noted the internal controls over allowable costs and activities of payroll expenditures charged to the grant were not designed effectively to detect errors in rates paid. Our test detected that two out of eight employee paychecks charged to the grant were based on rates that did not agree with the approved pay rates. These two employees were overpaid by a total of $399 (see Finding 2022-003). The Educational Service Center should implement a control process that verifies wages charged to federal programs agree to approved pay rates. This will help to ensure the Educational Service Center is in compliance with Federal grant requirements for allowable costs. Failure to do so could result in future questioned costs and loss of federal grant funding.

2 CFR ? 3474 gives regulatory effect to the Department of Education for 2 CFR ? 200.430, which provides, in part, compensation for personal services includes all remuneration, paid currently or accrued, for services of employees rendered during the period of performance under the Federal award, including but not necessarily limited to wages and salaries. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non- Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. 2 CFR ? 200.303 requires a non-Federal entity receiving federal awards to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. During our testing of the Education Stabilization Fund grant program, we noted the internal controls over allowable costs and activities of payroll expenditures charged to the grant were not designed effectively to detect errors in rates paid. Our test detected that two out of eight employee paychecks charged to the grant were based on rates that did not agree with the approved pay rates. These two employees were overpaid by a total of $399 (see Finding 2022-003). The Educational Service Center should implement a control process that verifies wages charged to federal programs agree to approved pay rates. This will help to ensure the Educational Service Center is in compliance with Federal grant requirements for allowable costs. Failure to do so could result in future questioned costs and loss of federal grant funding.

2 CFR ? 3474 gives regulatory effect to the Department of Education for 2 CFR ? 200.430, which provides, in part, compensation for personal services includes all remuneration, paid currently or accrued, for services of employees rendered during the period of performance under the Federal award, including but not necessarily limited to wages and salaries. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non- Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. 2 CFR ? 200.303 requires a non-Federal entity receiving federal awards to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. During our testing of the Education Stabilization Fund grant program, we noted the internal controls over allowable costs and activities of payroll expenditures charged to the grant were not designed effectively to detect errors in rates paid. Our test detected that two out of eight employee paychecks charged to the grant were based on rates that did not agree with the approved pay rates. These two employees were overpaid by a total of $399 (see Finding 2022-003). The Educational Service Center should implement a control process that verifies wages charged to federal programs agree to approved pay rates. This will help to ensure the Educational Service Center is in compliance with Federal grant requirements for allowable costs. Failure to do so could result in future questioned costs and loss of federal grant funding.