Audit 297044

U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES - AL NUMBER 84.010A PASS THROUGH NUMBER 5204 AUDIT PERIOD - YEAR END JUNE 30, 2023 2023-001. Allowable Cost/Cost Principles Criteria or specific requirement: Office of Management and Budget (OMB) 2 CFR Part 200, subpart E - Cost Principles establish principles for determining the allowable cost incurred by the District under Federal awards. Such costs are to be necessary and reasonable for the performance of the Federal award. Condition: Unallowable costs paid from the Title I program totaling $2,060 were detected for the audit year. These costs were comprised of $1,304 for field trips that were not included in the approved budget, and $756 in salary payments that should have been recorded in the District's general fund. Cause: Lack of internal control and management oversight over program expenditures. Effect or potential effect: Unallowable costs of $2,060 were paid from the Title I program. Questioned costs: The amount of questioned costs was $2,060. Context: An examination of Title I program non-payroll expenditures totaling $34,570 (15 checks) from a population of $436,956 (144 checks). One of the fifteen checks examined included unallowable costs. An examination of Title I payroll expenditures for 4 employees ($113,992) from a population of 39 employees ($606.334). Our sample was statistically valid sample. Identification as a repeat finding: No Recommendation: The District should contact the Arkansas Department of Education for resolution regarding this matter and implement proper controls over program expenditures. Views of responsible officials: DESE will be contacted to ensure the correct process is used to move the unallowable costs totaling $2,060 to the Operating Fund. To correct the payroll issue of charging unallowable costs, the payroll clerk will run reports, quarterly, to verify all payroll charges to any federal fund are appropriate, as well as getting the Business Manager and Federal Programs Coordinator’s approval. To correct the fieldtrip being unbudgeted the Federal Programs Coordinator will receive a list of any proposed fieldtrips schools are planning to use Federal money for and budget them accordingly. In addition, all parties approving requisitions will ensure correct coding is used for all Title I purchases.

U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES - AL NUMBER 84.010A PASS THROUGH NUMBER 5204 AUDIT PERIOD - YEAR END JUNE 30, 2023 2023-002. Reporting Criteria or specific requirement: The District is required to budget Title I expenditures and submit such information to the Arkansas Division of Elementary and Secondary Education (DESE). Actual expenditures may not exceed the budget amounts for specific categories by more than 10 percent without prior approval from the DESE and submission of of budget amendments or adjustements. Condition: Title I School Improvement Grant expenditures for function 2212 (Instruction and Curriculum Development) and Title I expenditures for functions 1550 (Early Childhood Education) and 5500 (Indirect Cost) exceeded the budgeted amounts by $738, $6,246 and $8,059, respectively, more than the 10 percent variance allowed. Cause: The District failed to properly monitor expenditures against the approved budget. Effect or potential effect: The District did not submit applicable budget amendments or adjustments to DESE approval for the Title I program resulting in actual expenditures exceeding budgeted amounts. Context: Comparision of budget expenditures to actual expenditures as reported on the annual financial report. Identification as a repeat finding: No Recommendation: The District should implement procuedures to ensure expenditures are properly monitored and budgets are amended as necessary and consult with DESE for further gudiance regarding this matter. Views of responsible officials:DESE will be contacted to ensure proper procedure is followed going forward. The Federal Program Coordinator will provide a date to all involved parties with a cutoff date for any expenses that were not originally budgeted, to amend the budget, to stay within the guidelines provided by DESE. After that point, no more expenses will be approved that were not budgeted. After the cutoff, the Business Manager will also assist in monitoring the approved budget for payroll expenses or journal entries that may change the total expenses and need a final amendment to the budget submitted. When the final rates for indirect costs are posted, a budget amendment will be done at the time to ensure the anticipated indirect cost will be within budget.

U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES - AL NUMBER 84.010A PASS THROUGH NUMBER 5204 AUDIT PERIOD - YEAR END JUNE 30, 2023 2023-001. Allowable Cost/Cost Principles Criteria or specific requirement: Office of Management and Budget (OMB) 2 CFR Part 200, subpart E - Cost Principles establish principles for determining the allowable cost incurred by the District under Federal awards. Such costs are to be necessary and reasonable for the performance of the Federal award. Condition: Unallowable costs paid from the Title I program totaling $2,060 were detected for the audit year. These costs were comprised of $1,304 for field trips that were not included in the approved budget, and $756 in salary payments that should have been recorded in the District's general fund. Cause: Lack of internal control and management oversight over program expenditures. Effect or potential effect: Unallowable costs of $2,060 were paid from the Title I program. Questioned costs: The amount of questioned costs was $2,060. Context: An examination of Title I program non-payroll expenditures totaling $34,570 (15 checks) from a population of $436,956 (144 checks). One of the fifteen checks examined included unallowable costs. An examination of Title I payroll expenditures for 4 employees ($113,992) from a population of 39 employees ($606.334). Our sample was statistically valid sample. Identification as a repeat finding: No Recommendation: The District should contact the Arkansas Department of Education for resolution regarding this matter and implement proper controls over program expenditures. Views of responsible officials: DESE will be contacted to ensure the correct process is used to move the unallowable costs totaling $2,060 to the Operating Fund. To correct the payroll issue of charging unallowable costs, the payroll clerk will run reports, quarterly, to verify all payroll charges to any federal fund are appropriate, as well as getting the Business Manager and Federal Programs Coordinator’s approval. To correct the fieldtrip being unbudgeted the Federal Programs Coordinator will receive a list of any proposed fieldtrips schools are planning to use Federal money for and budget them accordingly. In addition, all parties approving requisitions will ensure correct coding is used for all Title I purchases.

U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES - AL NUMBER 84.010A PASS THROUGH NUMBER 5204 AUDIT PERIOD - YEAR END JUNE 30, 2023 2023-002. Reporting Criteria or specific requirement: The District is required to budget Title I expenditures and submit such information to the Arkansas Division of Elementary and Secondary Education (DESE). Actual expenditures may not exceed the budget amounts for specific categories by more than 10 percent without prior approval from the DESE and submission of of budget amendments or adjustements. Condition: Title I School Improvement Grant expenditures for function 2212 (Instruction and Curriculum Development) and Title I expenditures for functions 1550 (Early Childhood Education) and 5500 (Indirect Cost) exceeded the budgeted amounts by $738, $6,246 and $8,059, respectively, more than the 10 percent variance allowed. Cause: The District failed to properly monitor expenditures against the approved budget. Effect or potential effect: The District did not submit applicable budget amendments or adjustments to DESE approval for the Title I program resulting in actual expenditures exceeding budgeted amounts. Context: Comparision of budget expenditures to actual expenditures as reported on the annual financial report. Identification as a repeat finding: No Recommendation: The District should implement procuedures to ensure expenditures are properly monitored and budgets are amended as necessary and consult with DESE for further gudiance regarding this matter. Views of responsible officials:DESE will be contacted to ensure proper procedure is followed going forward. The Federal Program Coordinator will provide a date to all involved parties with a cutoff date for any expenses that were not originally budgeted, to amend the budget, to stay within the guidelines provided by DESE. After that point, no more expenses will be approved that were not budgeted. After the cutoff, the Business Manager will also assist in monitoring the approved budget for payroll expenses or journal entries that may change the total expenses and need a final amendment to the budget submitted. When the final rates for indirect costs are posted, a budget amendment will be done at the time to ensure the anticipated indirect cost will be within budget.