Audit 294777

Activities Allowed or Unallowed, and Allowable Costs and Cost Principles for Education Stabilization Fund Federal program: ALN 84.425U&D Education Stabilization Fund Federal agency: U.S. Department of Education Pass-through entity: Colorado Department of Education Criteria: A non-federal grant recipient should set reasonable budgets for programs to minimize incentives to miscode expenses. The recipient should compare budgeted and actual allowable costs and investigate variances where applicable. Condition: While the Organization created a budget for overall activities, they did not input the budget into their accounting system or create an outside tool to track actual grant expenditures with the budget. Cause: Controls to ensure budgets are created and utilized are not properly designed or operating effectively. Effect: The District did not identify grant expenditures until after year end. Questioned costs: None noted. Activities Allowed or Unallowed, and Allowable Costs and Cost Principles for Education Stabilization Fund (Continued) Context: Testing was performed on a population size of 31. Based on our risk assessment we did tested the entire population rather than using statistical sampling. Based on our testing none of the 31 items were compared to the budget in the general ledger software. Recommendation: Management should implement procedures that include a creation of a budget for each grant award and track expenses against the budget. Additionally, we recommend that the District retain a third party firm to provide budgeting assistance. Views of responsible officials and planned corrective action: Management agrees with this finding and is working on implementing a budget to actual reporting process as staffing allows.

Reporting for Education Stabilization Fund Federal program: ALN 84.425U&D Education Stabilization Fund Federal agency: U.S. Department of Education Pass-through entity: Colorado Department of Education Criteria: As an LEA, the LEA is required to submit certain annual financial reports to the SEA on an annual basis. Condition: While the Organization submitted the required annual financial reports, these reports did not agree to the under. Cause: Controls to ensure annual financial reports are reconciled to the underlying accounting data do not exist. Effect: The District misreported the amount of funds expended to the SEA for fiscal year 2023. Questioned costs: None noted. Context: Testing was performed over the total population of required reports. Statistical sampling was not used. Recommendation: Management should implement procedures to reconcile annual financial reports to the underlying accounting data. Additionally, we recommend that the District retain a third party firm to reconcile such reports. Views of responsible officials and planned corrective action: Management agrees with this finding and is working on implementing an annual financial report reconciliation process as staffing allows.

Activities Allowed or Unallowed, and Allowable Costs and Cost Principles for Education Stabilization Fund Federal program: ALN 84.425U&D Education Stabilization Fund Federal agency: U.S. Department of Education Pass-through entity: Colorado Department of Education Criteria: A non-federal grant recipient should set reasonable budgets for programs to minimize incentives to miscode expenses. The recipient should compare budgeted and actual allowable costs and investigate variances where applicable. Condition: While the Organization created a budget for overall activities, they did not input the budget into their accounting system or create an outside tool to track actual grant expenditures with the budget. Cause: Controls to ensure budgets are created and utilized are not properly designed or operating effectively. Effect: The District did not identify grant expenditures until after year end. Questioned costs: None noted. Activities Allowed or Unallowed, and Allowable Costs and Cost Principles for Education Stabilization Fund (Continued) Context: Testing was performed on a population size of 31. Based on our risk assessment we did tested the entire population rather than using statistical sampling. Based on our testing none of the 31 items were compared to the budget in the general ledger software. Recommendation: Management should implement procedures that include a creation of a budget for each grant award and track expenses against the budget. Additionally, we recommend that the District retain a third party firm to provide budgeting assistance. Views of responsible officials and planned corrective action: Management agrees with this finding and is working on implementing a budget to actual reporting process as staffing allows.

Reporting for Education Stabilization Fund Federal program: ALN 84.425U&D Education Stabilization Fund Federal agency: U.S. Department of Education Pass-through entity: Colorado Department of Education Criteria: As an LEA, the LEA is required to submit certain annual financial reports to the SEA on an annual basis. Condition: While the Organization submitted the required annual financial reports, these reports did not agree to the under. Cause: Controls to ensure annual financial reports are reconciled to the underlying accounting data do not exist. Effect: The District misreported the amount of funds expended to the SEA for fiscal year 2023. Questioned costs: None noted. Context: Testing was performed over the total population of required reports. Statistical sampling was not used. Recommendation: Management should implement procedures to reconcile annual financial reports to the underlying accounting data. Additionally, we recommend that the District retain a third party firm to reconcile such reports. Views of responsible officials and planned corrective action: Management agrees with this finding and is working on implementing an annual financial report reconciliation process as staffing allows.

Activities Allowed or Unallowed, and Allowable Costs and Cost Principles for Education Stabilization Fund Federal program: ALN 84.425U&D Education Stabilization Fund Federal agency: U.S. Department of Education Pass-through entity: Colorado Department of Education Criteria: A non-federal grant recipient should set reasonable budgets for programs to minimize incentives to miscode expenses. The recipient should compare budgeted and actual allowable costs and investigate variances where applicable. Condition: While the Organization created a budget for overall activities, they did not input the budget into their accounting system or create an outside tool to track actual grant expenditures with the budget. Cause: Controls to ensure budgets are created and utilized are not properly designed or operating effectively. Effect: The District did not identify grant expenditures until after year end. Questioned costs: None noted. Activities Allowed or Unallowed, and Allowable Costs and Cost Principles for Education Stabilization Fund (Continued) Context: Testing was performed on a population size of 31. Based on our risk assessment we did tested the entire population rather than using statistical sampling. Based on our testing none of the 31 items were compared to the budget in the general ledger software. Recommendation: Management should implement procedures that include a creation of a budget for each grant award and track expenses against the budget. Additionally, we recommend that the District retain a third party firm to provide budgeting assistance. Views of responsible officials and planned corrective action: Management agrees with this finding and is working on implementing a budget to actual reporting process as staffing allows.

Reporting for Education Stabilization Fund Federal program: ALN 84.425U&D Education Stabilization Fund Federal agency: U.S. Department of Education Pass-through entity: Colorado Department of Education Criteria: As an LEA, the LEA is required to submit certain annual financial reports to the SEA on an annual basis. Condition: While the Organization submitted the required annual financial reports, these reports did not agree to the under. Cause: Controls to ensure annual financial reports are reconciled to the underlying accounting data do not exist. Effect: The District misreported the amount of funds expended to the SEA for fiscal year 2023. Questioned costs: None noted. Context: Testing was performed over the total population of required reports. Statistical sampling was not used. Recommendation: Management should implement procedures to reconcile annual financial reports to the underlying accounting data. Additionally, we recommend that the District retain a third party firm to reconcile such reports. Views of responsible officials and planned corrective action: Management agrees with this finding and is working on implementing an annual financial report reconciliation process as staffing allows.

Activities Allowed or Unallowed, and Allowable Costs and Cost Principles for Education Stabilization Fund Federal program: ALN 84.425U&D Education Stabilization Fund Federal agency: U.S. Department of Education Pass-through entity: Colorado Department of Education Criteria: A non-federal grant recipient should set reasonable budgets for programs to minimize incentives to miscode expenses. The recipient should compare budgeted and actual allowable costs and investigate variances where applicable. Condition: While the Organization created a budget for overall activities, they did not input the budget into their accounting system or create an outside tool to track actual grant expenditures with the budget. Cause: Controls to ensure budgets are created and utilized are not properly designed or operating effectively. Effect: The District did not identify grant expenditures until after year end. Questioned costs: None noted. Activities Allowed or Unallowed, and Allowable Costs and Cost Principles for Education Stabilization Fund (Continued) Context: Testing was performed on a population size of 31. Based on our risk assessment we did tested the entire population rather than using statistical sampling. Based on our testing none of the 31 items were compared to the budget in the general ledger software. Recommendation: Management should implement procedures that include a creation of a budget for each grant award and track expenses against the budget. Additionally, we recommend that the District retain a third party firm to provide budgeting assistance. Views of responsible officials and planned corrective action: Management agrees with this finding and is working on implementing a budget to actual reporting process as staffing allows.

Reporting for Education Stabilization Fund Federal program: ALN 84.425U&D Education Stabilization Fund Federal agency: U.S. Department of Education Pass-through entity: Colorado Department of Education Criteria: As an LEA, the LEA is required to submit certain annual financial reports to the SEA on an annual basis. Condition: While the Organization submitted the required annual financial reports, these reports did not agree to the under. Cause: Controls to ensure annual financial reports are reconciled to the underlying accounting data do not exist. Effect: The District misreported the amount of funds expended to the SEA for fiscal year 2023. Questioned costs: None noted. Context: Testing was performed over the total population of required reports. Statistical sampling was not used. Recommendation: Management should implement procedures to reconcile annual financial reports to the underlying accounting data. Additionally, we recommend that the District retain a third party firm to reconcile such reports. Views of responsible officials and planned corrective action: Management agrees with this finding and is working on implementing an annual financial report reconciliation process as staffing allows.