GENERAL INFORMATION: Grant Titles: National School Lunch Program, School Breakfast Program Federal Award Number and Year: 2023
Federal Agency: US Department of Agriculture Assistance Listing # 10.555 and # 10.553
Pass-through Entity number: 88
Pass-through Agency: WV Department of Education CONDITION: The Board did not ensure compliance with the guidelines required for the National School Lunch Program and School Breakfast Program (the Programs) Special Tests and Provisions requirement. CONTEXT: We were unable to confirm that non-program adults are paying for meals prepared for the National School Lunch Program and School Breakfast Program. Outstanding receivables for meals were not being pursued for collection. CRITERIA: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Appendix XI Part 4 Section Child Nutrition Cluster Section III. N. 3. states, in part, that: "A [School Food Authority] SFA is required to account for all revenues and expenditures of its non-profit school food service in accordance with State requirements. An SFA must operate its food services on a non-profit basis; all revenue generated by the school food service must be used to operate and improve its food services (7 CFR sections 210.14(a), 210.14(c), 210.19(a)(2), 215.7(d)(1), 220.2, and 220.7(e)(1)(i)." Title 7 U.S. CFR Part 210 National School Lunch Program §210.14(a) states, in part, that: "...School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under § 210.19(a) of this part." Title 126 - Procedural Rule of the West Virginia Board of Education Series 85 - Policies of Operation Manual Child Nutrition Programs (Policy 4320 §126-85-83) states in part: "83.1. Meals served to teachers, administrators, custodians and other adults, such as school patrons, elderly volunteers and Foster Grandparents Program participants, must be priced so that the adult payments in combination with income from other sources (such as state or local fringe benefits or payroll funds, or funding from voluntary agencies) are sufficient to cover the meal costs. The charge for adult meals is determined by the county board of education and approved by the WVDE in the Agreement between SFA and SA. It is recommended that the charge(s) be established at or near the county per meal costs. Adult meals are not reimbursable nor counted in the commodity allocation entitlement." "83.3. Meals served to adults not directly involved in the child nutrition program such as administrators, teachers, aides, student teachers and other persons working or visiting in the school may not be served free of charge unless the cost of the meal is reimbursed to the program from another funding source. These meals must be reported as non-program adult meals." QUESTIONED COSTS: Unknown CAUSE: The Board does not have a Food Service Collection Policy. Further, the Board is not actively pursuing past due balances for purchases of meals. EFFECT: The Board has potentially used National School Lunch Program funds to subsidize meals for adults who are not eligible to receive free or reduced meals as part of the Program. Furthermore, failure to collect funds on the outstanding receivables inhibits the ability to capitalize such funds for operating and improving its food services. REPEAT FINDING: No RECOMMENDATION: The Upshur County Board of Education should comply with the requirements of the National School Lunch Program as required by the Code of Federal Regulations. In addition, the Board should establish and follow a collection policy and attempt to collect the outstanding balances on the receivables related to the National School Lunch Program.
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Board will develop a Food Service Collection Policy and attempt to collect outstanding balances on the receivables related to the National School Lunch Program.
GENERAL INFORMATION: Grant Titles: National School Lunch Program, School Breakfast Program Federal Award Number and Year: 2023
Federal Agency: US Department of Agriculture Assistance Listing # 10.555 and # 10.553
Pass-through Entity number: 88
Pass-through Agency: WV Department of Education CONDITION: The Board did not ensure compliance with the guidelines required for the National School Lunch Program and School Breakfast Program (the Programs) Special Tests and Provisions requirement. CONTEXT: We were unable to confirm that non-program adults are paying for meals prepared for the National School Lunch Program and School Breakfast Program. Outstanding receivables for meals were not being pursued for collection. CRITERIA: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Appendix XI Part 4 Section Child Nutrition Cluster Section III. N. 3. states, in part, that: "A [School Food Authority] SFA is required to account for all revenues and expenditures of its non-profit school food service in accordance with State requirements. An SFA must operate its food services on a non-profit basis; all revenue generated by the school food service must be used to operate and improve its food services (7 CFR sections 210.14(a), 210.14(c), 210.19(a)(2), 215.7(d)(1), 220.2, and 220.7(e)(1)(i)." Title 7 U.S. CFR Part 210 National School Lunch Program §210.14(a) states, in part, that: "...School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under § 210.19(a) of this part." Title 126 - Procedural Rule of the West Virginia Board of Education Series 85 - Policies of Operation Manual Child Nutrition Programs (Policy 4320 §126-85-83) states in part: "83.1. Meals served to teachers, administrators, custodians and other adults, such as school patrons, elderly volunteers and Foster Grandparents Program participants, must be priced so that the adult payments in combination with income from other sources (such as state or local fringe benefits or payroll funds, or funding from voluntary agencies) are sufficient to cover the meal costs. The charge for adult meals is determined by the county board of education and approved by the WVDE in the Agreement between SFA and SA. It is recommended that the charge(s) be established at or near the county per meal costs. Adult meals are not reimbursable nor counted in the commodity allocation entitlement." "83.3. Meals served to adults not directly involved in the child nutrition program such as administrators, teachers, aides, student teachers and other persons working or visiting in the school may not be served free of charge unless the cost of the meal is reimbursed to the program from another funding source. These meals must be reported as non-program adult meals." QUESTIONED COSTS: Unknown CAUSE: The Board does not have a Food Service Collection Policy. Further, the Board is not actively pursuing past due balances for purchases of meals. EFFECT: The Board has potentially used National School Lunch Program funds to subsidize meals for adults who are not eligible to receive free or reduced meals as part of the Program. Furthermore, failure to collect funds on the outstanding receivables inhibits the ability to capitalize such funds for operating and improving its food services. REPEAT FINDING: No RECOMMENDATION: The Upshur County Board of Education should comply with the requirements of the National School Lunch Program as required by the Code of Federal Regulations. In addition, the Board should establish and follow a collection policy and attempt to collect the outstanding balances on the receivables related to the National School Lunch Program.
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Board will develop a Food Service Collection Policy and attempt to collect outstanding balances on the receivables related to the National School Lunch Program.
GENERAL INFORMATION: Grant Titles: National School Lunch Program, School Breakfast Program Federal Award Number and Year: 2023
Federal Agency: US Department of Agriculture Assistance Listing # 10.555 and # 10.553
Pass-through Entity number: 88
Pass-through Agency: WV Department of Education CONDITION: The Board did not ensure compliance with the guidelines required for the National School Lunch Program and School Breakfast Program (the Programs) Special Tests and Provisions requirement. CONTEXT: We were unable to confirm that non-program adults are paying for meals prepared for the National School Lunch Program and School Breakfast Program. Outstanding receivables for meals were not being pursued for collection. CRITERIA: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Appendix XI Part 4 Section Child Nutrition Cluster Section III. N. 3. states, in part, that: "A [School Food Authority] SFA is required to account for all revenues and expenditures of its non-profit school food service in accordance with State requirements. An SFA must operate its food services on a non-profit basis; all revenue generated by the school food service must be used to operate and improve its food services (7 CFR sections 210.14(a), 210.14(c), 210.19(a)(2), 215.7(d)(1), 220.2, and 220.7(e)(1)(i)." Title 7 U.S. CFR Part 210 National School Lunch Program §210.14(a) states, in part, that: "...School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under § 210.19(a) of this part." Title 126 - Procedural Rule of the West Virginia Board of Education Series 85 - Policies of Operation Manual Child Nutrition Programs (Policy 4320 §126-85-83) states in part: "83.1. Meals served to teachers, administrators, custodians and other adults, such as school patrons, elderly volunteers and Foster Grandparents Program participants, must be priced so that the adult payments in combination with income from other sources (such as state or local fringe benefits or payroll funds, or funding from voluntary agencies) are sufficient to cover the meal costs. The charge for adult meals is determined by the county board of education and approved by the WVDE in the Agreement between SFA and SA. It is recommended that the charge(s) be established at or near the county per meal costs. Adult meals are not reimbursable nor counted in the commodity allocation entitlement." "83.3. Meals served to adults not directly involved in the child nutrition program such as administrators, teachers, aides, student teachers and other persons working or visiting in the school may not be served free of charge unless the cost of the meal is reimbursed to the program from another funding source. These meals must be reported as non-program adult meals." QUESTIONED COSTS: Unknown CAUSE: The Board does not have a Food Service Collection Policy. Further, the Board is not actively pursuing past due balances for purchases of meals. EFFECT: The Board has potentially used National School Lunch Program funds to subsidize meals for adults who are not eligible to receive free or reduced meals as part of the Program. Furthermore, failure to collect funds on the outstanding receivables inhibits the ability to capitalize such funds for operating and improving its food services. REPEAT FINDING: No RECOMMENDATION: The Upshur County Board of Education should comply with the requirements of the National School Lunch Program as required by the Code of Federal Regulations. In addition, the Board should establish and follow a collection policy and attempt to collect the outstanding balances on the receivables related to the National School Lunch Program.
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Board will develop a Food Service Collection Policy and attempt to collect outstanding balances on the receivables related to the National School Lunch Program.
Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2023 Assistance Listing #: 84.010A
Federal Agency: US Department of Education
Pass-through Entity number: 41
Pass-through Agency: WV Department of Education
Grant Title: Supporting Effective Instruction State Grants (Title II) Federal Award Number and Year: 2023 Assistance Listing #: 84.367 and 84.367A
Federal Agency: US Department of Education
Pass-through Entity number: 40
Pass-through Agency: WV Department of Education
Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2023 Assistance Listing #: 84.425U
Federal Agency: US Department of Education
Pass-through Entity number: 52
Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Title II, and ESSER programs. CONTEXT: Specifically, we identified the following:
Sixty non-payroll expenditure transactions were sampled from a population of 204 for Title I Grants to Local Education Agencies, of which Fifty-seven expenditures, or 95% of the sample size, totaling $208,000, did not have Program Director approval prior to payment. Fourteen expenditures, or 23% of the sample size, totaling $144,290, in which the contract was not available for review for contracted services. Twenty-three expenditures, or 38% of the sample size, totaling $30,152, in which purchase orders were not signed. One expenditure, or 2% of the sample size, totaling $2,783, in which an itemized invoice was not available for review. Three expenditures, or 5% of the sample size, totaling $8,003, in which the expenditure was not properly coded. One expenditure, or 2% of the sample size, totaling $6,485, in which the invoice was not itemized. Eleven expenditures, or 18% of the sample size, totaling $25,811, in which the purchase order was dated after the invoice. In addition, one expenditure was $120 more than the approved purchase order. One expenditure, or 2% of the sample size, totaling $23, in which State sales tax was paid. Twenty-three expenditures, or 38% of the sample size, totaling $25,989, which were not supported with adequate documentation. Nine non-payroll expenditures were sampled from a population of 53 for the Supporting Effective Instruction State Grants program (Title II), of which Three expenditures, or 33% of the sample size, totaling $2,827, did not have Program Director approval prior to payment. Four expenditures, or 44% of the sample size, totaling $6,545, in which the purchase order was not signed. Two expenditures, or 22% of the sample size, totaling $3,195, in which the purchase order was dated after the invoice. Sixty non-payroll expenditure transactions were sampled from a population of 93 for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Fifty-four expenditures, or 90% of the sample size, totaling $3,136,290, did not have Program Director approval prior to payment. One expenditure, or 2% of the sample size, totaling $27,665, in which the expenditure was not properly coded. Nineteen expenditures, or 32% of the sample size, totaling $176,763, in which the contract was not available for review for contracted services. Twenty-one expenditures, or 35% of the sample size, totaling $814,912, in which the purchase order was not signed. One expenditure, or 2% of the sample size, totaling $6,485, in which the invoice was not itemized. Twenty-four expenditures, or 40% of the sample size, totaling $940,689, in which the purchase order was dated after the invoice. In addition, one expenditure was $12,000 more than the approved purchase order. Sixteen expenditures, totaling $81,698, that did not have any bid documentation available for review. Ten expenditures, totaling $143,731, were not included in the approved ESSER budget. Six expenditures, totaling $118,731, in which ESSER funds were used to match other federal funds. Three expenditures, totaling $32,460, for activities such as passes or tickets where there was no support to indicate who received the passes or tickets. The final cost of a construction project was $81,589 more than the original bid and also exceeded the next two highest original bids with no documentation available for review regarding change orders or approvals thereof. The Board allowed a construction project to begin knowing that there was a deficit of $107,246 and no known available funding to complete the project. In addition, we tested 20 personnel files and related payroll expenditures for the above federal programs and noted the following items: One employee was overpaid $1,775 for supplemental duties based on support available for review. Six employees did not have a proper verification of education in their file. Five employees did not have a valid employment contract in their file. Four employees were paid supplements, totaling $55,351, and did not have support in their file. Five employees did not have a valid extra-duty employment contract in their file. Four employees did not have an IRS W-4 withholding form. Ten employees did not have a WV IT-104 withholding form. Twenty employees did not have voluntary withholding forms available for review. CRITERIA:
Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." Title 34 U.S. Code of Federal Regulations (CFR) Part 75, Subpart E §75.604 states, in part, that: "A grantee shall ensure that sufficient funds are available to meet any non-Federal share of the cost of constructing the facility." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Title II, and ESSER Programs. REPEAT FINDING: No RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, All expenditures be no greater than the remaining amount on their corresponding blanket purchase orders, Each expenditure be coded in accordance with the Board of Education's chart of accounts, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures. The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented. Management of the Upshur County Board of Education should follow the guidance set forth in Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75.
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Board has developed procedures to ensure that all purchased orders are approved before orders are placed, all expenditures are properly authorized by the respective program director and supporting documentation is adequately maintained. The Board is using a requisition form in Droplet to achieve this goal. All employees authorized to make or approve purchases have been trained on purchasing procedures outlined in the Purchasing Policies and Procedures and Procedures Manual for Local Educational Agencies in the State of West Virginia by the WVDE Office of School Finance on 2/23/2024.
Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2023 Assistance Listing #: 84.010A
Federal Agency: US Department of Education
Pass-through Entity number: 41
Pass-through Agency: WV Department of Education
Grant Title: Supporting Effective Instruction State Grants (Title II) Federal Award Number and Year: 2023 Assistance Listing #: 84.367 and 84.367A
Federal Agency: US Department of Education
Pass-through Entity number: 40
Pass-through Agency: WV Department of Education
Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2023 Assistance Listing #: 84.425U
Federal Agency: US Department of Education
Pass-through Entity number: 52
Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Title II, and ESSER programs. CONTEXT: Specifically, we identified the following:
Sixty non-payroll expenditure transactions were sampled from a population of 204 for Title I Grants to Local Education Agencies, of which Fifty-seven expenditures, or 95% of the sample size, totaling $208,000, did not have Program Director approval prior to payment. Fourteen expenditures, or 23% of the sample size, totaling $144,290, in which the contract was not available for review for contracted services. Twenty-three expenditures, or 38% of the sample size, totaling $30,152, in which purchase orders were not signed. One expenditure, or 2% of the sample size, totaling $2,783, in which an itemized invoice was not available for review. Three expenditures, or 5% of the sample size, totaling $8,003, in which the expenditure was not properly coded. One expenditure, or 2% of the sample size, totaling $6,485, in which the invoice was not itemized. Eleven expenditures, or 18% of the sample size, totaling $25,811, in which the purchase order was dated after the invoice. In addition, one expenditure was $120 more than the approved purchase order. One expenditure, or 2% of the sample size, totaling $23, in which State sales tax was paid. Twenty-three expenditures, or 38% of the sample size, totaling $25,989, which were not supported with adequate documentation. Nine non-payroll expenditures were sampled from a population of 53 for the Supporting Effective Instruction State Grants program (Title II), of which Three expenditures, or 33% of the sample size, totaling $2,827, did not have Program Director approval prior to payment. Four expenditures, or 44% of the sample size, totaling $6,545, in which the purchase order was not signed. Two expenditures, or 22% of the sample size, totaling $3,195, in which the purchase order was dated after the invoice. Sixty non-payroll expenditure transactions were sampled from a population of 93 for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Fifty-four expenditures, or 90% of the sample size, totaling $3,136,290, did not have Program Director approval prior to payment. One expenditure, or 2% of the sample size, totaling $27,665, in which the expenditure was not properly coded. Nineteen expenditures, or 32% of the sample size, totaling $176,763, in which the contract was not available for review for contracted services. Twenty-one expenditures, or 35% of the sample size, totaling $814,912, in which the purchase order was not signed. One expenditure, or 2% of the sample size, totaling $6,485, in which the invoice was not itemized. Twenty-four expenditures, or 40% of the sample size, totaling $940,689, in which the purchase order was dated after the invoice. In addition, one expenditure was $12,000 more than the approved purchase order. Sixteen expenditures, totaling $81,698, that did not have any bid documentation available for review. Ten expenditures, totaling $143,731, were not included in the approved ESSER budget. Six expenditures, totaling $118,731, in which ESSER funds were used to match other federal funds. Three expenditures, totaling $32,460, for activities such as passes or tickets where there was no support to indicate who received the passes or tickets. The final cost of a construction project was $81,589 more than the original bid and also exceeded the next two highest original bids with no documentation available for review regarding change orders or approvals thereof. The Board allowed a construction project to begin knowing that there was a deficit of $107,246 and no known available funding to complete the project. In addition, we tested 20 personnel files and related payroll expenditures for the above federal programs and noted the following items: One employee was overpaid $1,775 for supplemental duties based on support available for review. Six employees did not have a proper verification of education in their file. Five employees did not have a valid employment contract in their file. Four employees were paid supplements, totaling $55,351, and did not have support in their file. Five employees did not have a valid extra-duty employment contract in their file. Four employees did not have an IRS W-4 withholding form. Ten employees did not have a WV IT-104 withholding form. Twenty employees did not have voluntary withholding forms available for review. CRITERIA:
Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." Title 34 U.S. Code of Federal Regulations (CFR) Part 75, Subpart E §75.604 states, in part, that: "A grantee shall ensure that sufficient funds are available to meet any non-Federal share of the cost of constructing the facility." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Title II, and ESSER Programs. REPEAT FINDING: No RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, All expenditures be no greater than the remaining amount on their corresponding blanket purchase orders, Each expenditure be coded in accordance with the Board of Education's chart of accounts, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures. The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented. Management of the Upshur County Board of Education should follow the guidance set forth in Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75.
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Board has developed procedures to ensure that all purchased orders are approved before orders are placed, all expenditures are properly authorized by the respective program director and supporting documentation is adequately maintained. The Board is using a requisition form in Droplet to achieve this goal. All employees authorized to make or approve purchases have been trained on purchasing procedures outlined in the Purchasing Policies and Procedures and Procedures Manual for Local Educational Agencies in the State of West Virginia by the WVDE Office of School Finance on 2/23/2024.
Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2023 Assistance Listing #: 84.010A
Federal Agency: US Department of Education
Pass-through Entity number: 41
Pass-through Agency: WV Department of Education
Grant Title: Supporting Effective Instruction State Grants (Title II) Federal Award Number and Year: 2023 Assistance Listing #: 84.367 and 84.367A
Federal Agency: US Department of Education
Pass-through Entity number: 40
Pass-through Agency: WV Department of Education
Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2023 Assistance Listing #: 84.425U
Federal Agency: US Department of Education
Pass-through Entity number: 52
Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Title II, and ESSER programs. CONTEXT: Specifically, we identified the following:
Sixty non-payroll expenditure transactions were sampled from a population of 204 for Title I Grants to Local Education Agencies, of which Fifty-seven expenditures, or 95% of the sample size, totaling $208,000, did not have Program Director approval prior to payment. Fourteen expenditures, or 23% of the sample size, totaling $144,290, in which the contract was not available for review for contracted services. Twenty-three expenditures, or 38% of the sample size, totaling $30,152, in which purchase orders were not signed. One expenditure, or 2% of the sample size, totaling $2,783, in which an itemized invoice was not available for review. Three expenditures, or 5% of the sample size, totaling $8,003, in which the expenditure was not properly coded. One expenditure, or 2% of the sample size, totaling $6,485, in which the invoice was not itemized. Eleven expenditures, or 18% of the sample size, totaling $25,811, in which the purchase order was dated after the invoice. In addition, one expenditure was $120 more than the approved purchase order. One expenditure, or 2% of the sample size, totaling $23, in which State sales tax was paid. Twenty-three expenditures, or 38% of the sample size, totaling $25,989, which were not supported with adequate documentation. Nine non-payroll expenditures were sampled from a population of 53 for the Supporting Effective Instruction State Grants program (Title II), of which Three expenditures, or 33% of the sample size, totaling $2,827, did not have Program Director approval prior to payment. Four expenditures, or 44% of the sample size, totaling $6,545, in which the purchase order was not signed. Two expenditures, or 22% of the sample size, totaling $3,195, in which the purchase order was dated after the invoice. Sixty non-payroll expenditure transactions were sampled from a population of 93 for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Fifty-four expenditures, or 90% of the sample size, totaling $3,136,290, did not have Program Director approval prior to payment. One expenditure, or 2% of the sample size, totaling $27,665, in which the expenditure was not properly coded. Nineteen expenditures, or 32% of the sample size, totaling $176,763, in which the contract was not available for review for contracted services. Twenty-one expenditures, or 35% of the sample size, totaling $814,912, in which the purchase order was not signed. One expenditure, or 2% of the sample size, totaling $6,485, in which the invoice was not itemized. Twenty-four expenditures, or 40% of the sample size, totaling $940,689, in which the purchase order was dated after the invoice. In addition, one expenditure was $12,000 more than the approved purchase order. Sixteen expenditures, totaling $81,698, that did not have any bid documentation available for review. Ten expenditures, totaling $143,731, were not included in the approved ESSER budget. Six expenditures, totaling $118,731, in which ESSER funds were used to match other federal funds. Three expenditures, totaling $32,460, for activities such as passes or tickets where there was no support to indicate who received the passes or tickets. The final cost of a construction project was $81,589 more than the original bid and also exceeded the next two highest original bids with no documentation available for review regarding change orders or approvals thereof. The Board allowed a construction project to begin knowing that there was a deficit of $107,246 and no known available funding to complete the project. In addition, we tested 20 personnel files and related payroll expenditures for the above federal programs and noted the following items: One employee was overpaid $1,775 for supplemental duties based on support available for review. Six employees did not have a proper verification of education in their file. Five employees did not have a valid employment contract in their file. Four employees were paid supplements, totaling $55,351, and did not have support in their file. Five employees did not have a valid extra-duty employment contract in their file. Four employees did not have an IRS W-4 withholding form. Ten employees did not have a WV IT-104 withholding form. Twenty employees did not have voluntary withholding forms available for review. CRITERIA:
Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." Title 34 U.S. Code of Federal Regulations (CFR) Part 75, Subpart E §75.604 states, in part, that: "A grantee shall ensure that sufficient funds are available to meet any non-Federal share of the cost of constructing the facility." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Title II, and ESSER Programs. REPEAT FINDING: No RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, All expenditures be no greater than the remaining amount on their corresponding blanket purchase orders, Each expenditure be coded in accordance with the Board of Education's chart of accounts, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures. The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented. Management of the Upshur County Board of Education should follow the guidance set forth in Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75.
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Board has developed procedures to ensure that all purchased orders are approved before orders are placed, all expenditures are properly authorized by the respective program director and supporting documentation is adequately maintained. The Board is using a requisition form in Droplet to achieve this goal. All employees authorized to make or approve purchases have been trained on purchasing procedures outlined in the Purchasing Policies and Procedures and Procedures Manual for Local Educational Agencies in the State of West Virginia by the WVDE Office of School Finance on 2/23/2024.
Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2023 Assistance Listing #: 84.010A
Federal Agency: US Department of Education
Pass-through Entity number: 41
Pass-through Agency: WV Department of Education
Grant Title: Supporting Effective Instruction State Grants (Title II) Federal Award Number and Year: 2023 Assistance Listing #: 84.367 and 84.367A
Federal Agency: US Department of Education
Pass-through Entity number: 40
Pass-through Agency: WV Department of Education
Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2023 Assistance Listing #: 84.425U
Federal Agency: US Department of Education
Pass-through Entity number: 52
Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Title II, and ESSER programs. CONTEXT: Specifically, we identified the following:
Sixty non-payroll expenditure transactions were sampled from a population of 204 for Title I Grants to Local Education Agencies, of which Fifty-seven expenditures, or 95% of the sample size, totaling $208,000, did not have Program Director approval prior to payment. Fourteen expenditures, or 23% of the sample size, totaling $144,290, in which the contract was not available for review for contracted services. Twenty-three expenditures, or 38% of the sample size, totaling $30,152, in which purchase orders were not signed. One expenditure, or 2% of the sample size, totaling $2,783, in which an itemized invoice was not available for review. Three expenditures, or 5% of the sample size, totaling $8,003, in which the expenditure was not properly coded. One expenditure, or 2% of the sample size, totaling $6,485, in which the invoice was not itemized. Eleven expenditures, or 18% of the sample size, totaling $25,811, in which the purchase order was dated after the invoice. In addition, one expenditure was $120 more than the approved purchase order. One expenditure, or 2% of the sample size, totaling $23, in which State sales tax was paid. Twenty-three expenditures, or 38% of the sample size, totaling $25,989, which were not supported with adequate documentation. Nine non-payroll expenditures were sampled from a population of 53 for the Supporting Effective Instruction State Grants program (Title II), of which Three expenditures, or 33% of the sample size, totaling $2,827, did not have Program Director approval prior to payment. Four expenditures, or 44% of the sample size, totaling $6,545, in which the purchase order was not signed. Two expenditures, or 22% of the sample size, totaling $3,195, in which the purchase order was dated after the invoice. Sixty non-payroll expenditure transactions were sampled from a population of 93 for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Fifty-four expenditures, or 90% of the sample size, totaling $3,136,290, did not have Program Director approval prior to payment. One expenditure, or 2% of the sample size, totaling $27,665, in which the expenditure was not properly coded. Nineteen expenditures, or 32% of the sample size, totaling $176,763, in which the contract was not available for review for contracted services. Twenty-one expenditures, or 35% of the sample size, totaling $814,912, in which the purchase order was not signed. One expenditure, or 2% of the sample size, totaling $6,485, in which the invoice was not itemized. Twenty-four expenditures, or 40% of the sample size, totaling $940,689, in which the purchase order was dated after the invoice. In addition, one expenditure was $12,000 more than the approved purchase order. Sixteen expenditures, totaling $81,698, that did not have any bid documentation available for review. Ten expenditures, totaling $143,731, were not included in the approved ESSER budget. Six expenditures, totaling $118,731, in which ESSER funds were used to match other federal funds. Three expenditures, totaling $32,460, for activities such as passes or tickets where there was no support to indicate who received the passes or tickets. The final cost of a construction project was $81,589 more than the original bid and also exceeded the next two highest original bids with no documentation available for review regarding change orders or approvals thereof. The Board allowed a construction project to begin knowing that there was a deficit of $107,246 and no known available funding to complete the project. In addition, we tested 20 personnel files and related payroll expenditures for the above federal programs and noted the following items: One employee was overpaid $1,775 for supplemental duties based on support available for review. Six employees did not have a proper verification of education in their file. Five employees did not have a valid employment contract in their file. Four employees were paid supplements, totaling $55,351, and did not have support in their file. Five employees did not have a valid extra-duty employment contract in their file. Four employees did not have an IRS W-4 withholding form. Ten employees did not have a WV IT-104 withholding form. Twenty employees did not have voluntary withholding forms available for review. CRITERIA:
Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." Title 34 U.S. Code of Federal Regulations (CFR) Part 75, Subpart E §75.604 states, in part, that: "A grantee shall ensure that sufficient funds are available to meet any non-Federal share of the cost of constructing the facility." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Title II, and ESSER Programs. REPEAT FINDING: No RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, All expenditures be no greater than the remaining amount on their corresponding blanket purchase orders, Each expenditure be coded in accordance with the Board of Education's chart of accounts, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures. The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented. Management of the Upshur County Board of Education should follow the guidance set forth in Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75.
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Board has developed procedures to ensure that all purchased orders are approved before orders are placed, all expenditures are properly authorized by the respective program director and supporting documentation is adequately maintained. The Board is using a requisition form in Droplet to achieve this goal. All employees authorized to make or approve purchases have been trained on purchasing procedures outlined in the Purchasing Policies and Procedures and Procedures Manual for Local Educational Agencies in the State of West Virginia by the WVDE Office of School Finance on 2/23/2024.
Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER)
Federal Award Number and Year: 2023 Assistance Listing #: 84.425U Federal Agency: US Department of Education
Pass-through Entity number: 52
Pass-through Agency: WV Department of Education
CONDITION: The Board did not ensure that equipment purchased with funds from the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) was properly tracked through an inventory list. In addition, the Board was unable to provide evidence of prior written approval for a construction project. CONTEXT: Specifically, we identified the following: Equipment purchased through a lease purchase agreement dated May 15, 2020, totaling $2,147,541, was not placed on an equipment inventory listing maintained for each school. The final lease payment of $536,829 was made during fiscal year 2023.
Additional equipment, totaling $38,475, was not placed on an equipment inventory listing maintained for each school.
The Board was unable to provide documentation of prior written approval from the West Virginia Department of Education for a HVAC construction project, totaling $1,777,483. CRITERIA: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Appendix XI Part 4 Section 84.425-ESF Section 1 - Elementary and Secondary Education states, in part, that: "F. Equipment/Real Property Management Any purchases with ESF funds in this category are subject to applicable inventory control, log maintenance, and disposition requirements consistent with Part 3, Section F, "Equipment /Real Property Management" of the 2023 Compliance Supplement. Auditors should determine whether governors, SEAs, and/or subrecipients received prior approval for capital expenditures for equipment acquisition or improvements to land, buildings, or equipment. (1) For capital equipment or improvements to land, buildings, or equipment that were purchased with grant funds, the governor or SEA must receive prior approval from ED. (2) For capital equipment or improvements to land, buildings, or equipment that were purchased with grant funds, the governor or SEA pass-through agency must provide prior approval to subrecipients." Title 2 U.S. Code of Federal Regulations (CFR) Part 200.439 Equipment and other capital expenditures, states, in part, that: "(b) (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. "(b) (2) Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5,000 or more have the prior written approval of the Federal awarding agency or pass-through entity. Title 2 U.S. Code of Federal Regulations (CFR) Part 200.313 Equipment states, in part, that: "... (d)(1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated." Title 7 CFR Section 3015.169 states, in part, that: "Recipient procedures for managing equipment shall, as a minimum, meet the following requirements (including replacement equipment) until such actions as transfer, replacement or disposal takes place: (a) Property records shall be maintained accurately. (Subpart D of this part contains retention and access requirements for these records.) The records shall include for each item of equipment the following: (1) A description of the equipment including manufacturer's serial numbers. (2) An identification number, such as the manufacturer's serial number. (3) Identification of the grant under which the recipient acquired the equipment. (4) The information needed to calculate the Federal share of the equipment (see § 3015.172). (5) Acquisition date and unit acquisition cost. (6) Location, use and condition of the equipment and the date the information was reported. (7) All pertinent information on the ultimate transfer, replacement, or disposal of the equipment. ... (b) Every two years, at a minimum, a physical inventory shall be conducted and the results reconciled with the property records to verify the existence, current utilization, and continued need for the equipment. Any discrepancies between quantities determined by the physical inspection and those shown in the accounting records shall be investigated to determine the causes of the differences." QUESTIONED COSTS: Unknown CAUSE: The Board did not have controls that would ensure inventory is properly tracked in accordance with all requirements of the ESSER program. Additionally, controls were not in place to track purchases of equipment. Also, the Board did not have controls in place to ensure that proper written approval was obtained in advance of starting a construction project. EFFECT: The Board did not properly track all equipment on an inventory list. Additionally, documentation was not available to verify compliance with requirements for approval of capital expenditures. This issue contributed to the disclaimer of opinion for the ESSER program. REPEAT FINDING: No RECOMMENDATION: The Upshur County Board of Education should establish and follow policies and procedures that will ensure compliance with requirements of the United States Department of Education's equipment management requirements and the requirements applicable to the ESSER program. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Board will establish procedures that will ensure compliance with requirements of the United States Department of Education's equipment management requirements applicable to the ESSER program.
GENERAL INFORMATION: Grant Titles: National School Lunch Program, School Breakfast Program Federal Award Number and Year: 2023
Federal Agency: US Department of Agriculture Assistance Listing # 10.555 and # 10.553
Pass-through Entity number: 88
Pass-through Agency: WV Department of Education CONDITION: The Board did not ensure compliance with the guidelines required for the National School Lunch Program and School Breakfast Program (the Programs) Special Tests and Provisions requirement. CONTEXT: We were unable to confirm that non-program adults are paying for meals prepared for the National School Lunch Program and School Breakfast Program. Outstanding receivables for meals were not being pursued for collection. CRITERIA: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Appendix XI Part 4 Section Child Nutrition Cluster Section III. N. 3. states, in part, that: "A [School Food Authority] SFA is required to account for all revenues and expenditures of its non-profit school food service in accordance with State requirements. An SFA must operate its food services on a non-profit basis; all revenue generated by the school food service must be used to operate and improve its food services (7 CFR sections 210.14(a), 210.14(c), 210.19(a)(2), 215.7(d)(1), 220.2, and 220.7(e)(1)(i)." Title 7 U.S. CFR Part 210 National School Lunch Program §210.14(a) states, in part, that: "...School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under § 210.19(a) of this part." Title 126 - Procedural Rule of the West Virginia Board of Education Series 85 - Policies of Operation Manual Child Nutrition Programs (Policy 4320 §126-85-83) states in part: "83.1. Meals served to teachers, administrators, custodians and other adults, such as school patrons, elderly volunteers and Foster Grandparents Program participants, must be priced so that the adult payments in combination with income from other sources (such as state or local fringe benefits or payroll funds, or funding from voluntary agencies) are sufficient to cover the meal costs. The charge for adult meals is determined by the county board of education and approved by the WVDE in the Agreement between SFA and SA. It is recommended that the charge(s) be established at or near the county per meal costs. Adult meals are not reimbursable nor counted in the commodity allocation entitlement." "83.3. Meals served to adults not directly involved in the child nutrition program such as administrators, teachers, aides, student teachers and other persons working or visiting in the school may not be served free of charge unless the cost of the meal is reimbursed to the program from another funding source. These meals must be reported as non-program adult meals." QUESTIONED COSTS: Unknown CAUSE: The Board does not have a Food Service Collection Policy. Further, the Board is not actively pursuing past due balances for purchases of meals. EFFECT: The Board has potentially used National School Lunch Program funds to subsidize meals for adults who are not eligible to receive free or reduced meals as part of the Program. Furthermore, failure to collect funds on the outstanding receivables inhibits the ability to capitalize such funds for operating and improving its food services. REPEAT FINDING: No RECOMMENDATION: The Upshur County Board of Education should comply with the requirements of the National School Lunch Program as required by the Code of Federal Regulations. In addition, the Board should establish and follow a collection policy and attempt to collect the outstanding balances on the receivables related to the National School Lunch Program.
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Board will develop a Food Service Collection Policy and attempt to collect outstanding balances on the receivables related to the National School Lunch Program.
GENERAL INFORMATION: Grant Titles: National School Lunch Program, School Breakfast Program Federal Award Number and Year: 2023
Federal Agency: US Department of Agriculture Assistance Listing # 10.555 and # 10.553
Pass-through Entity number: 88
Pass-through Agency: WV Department of Education CONDITION: The Board did not ensure compliance with the guidelines required for the National School Lunch Program and School Breakfast Program (the Programs) Special Tests and Provisions requirement. CONTEXT: We were unable to confirm that non-program adults are paying for meals prepared for the National School Lunch Program and School Breakfast Program. Outstanding receivables for meals were not being pursued for collection. CRITERIA: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Appendix XI Part 4 Section Child Nutrition Cluster Section III. N. 3. states, in part, that: "A [School Food Authority] SFA is required to account for all revenues and expenditures of its non-profit school food service in accordance with State requirements. An SFA must operate its food services on a non-profit basis; all revenue generated by the school food service must be used to operate and improve its food services (7 CFR sections 210.14(a), 210.14(c), 210.19(a)(2), 215.7(d)(1), 220.2, and 220.7(e)(1)(i)." Title 7 U.S. CFR Part 210 National School Lunch Program §210.14(a) states, in part, that: "...School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under § 210.19(a) of this part." Title 126 - Procedural Rule of the West Virginia Board of Education Series 85 - Policies of Operation Manual Child Nutrition Programs (Policy 4320 §126-85-83) states in part: "83.1. Meals served to teachers, administrators, custodians and other adults, such as school patrons, elderly volunteers and Foster Grandparents Program participants, must be priced so that the adult payments in combination with income from other sources (such as state or local fringe benefits or payroll funds, or funding from voluntary agencies) are sufficient to cover the meal costs. The charge for adult meals is determined by the county board of education and approved by the WVDE in the Agreement between SFA and SA. It is recommended that the charge(s) be established at or near the county per meal costs. Adult meals are not reimbursable nor counted in the commodity allocation entitlement." "83.3. Meals served to adults not directly involved in the child nutrition program such as administrators, teachers, aides, student teachers and other persons working or visiting in the school may not be served free of charge unless the cost of the meal is reimbursed to the program from another funding source. These meals must be reported as non-program adult meals." QUESTIONED COSTS: Unknown CAUSE: The Board does not have a Food Service Collection Policy. Further, the Board is not actively pursuing past due balances for purchases of meals. EFFECT: The Board has potentially used National School Lunch Program funds to subsidize meals for adults who are not eligible to receive free or reduced meals as part of the Program. Furthermore, failure to collect funds on the outstanding receivables inhibits the ability to capitalize such funds for operating and improving its food services. REPEAT FINDING: No RECOMMENDATION: The Upshur County Board of Education should comply with the requirements of the National School Lunch Program as required by the Code of Federal Regulations. In addition, the Board should establish and follow a collection policy and attempt to collect the outstanding balances on the receivables related to the National School Lunch Program.
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Board will develop a Food Service Collection Policy and attempt to collect outstanding balances on the receivables related to the National School Lunch Program.
GENERAL INFORMATION: Grant Titles: National School Lunch Program, School Breakfast Program Federal Award Number and Year: 2023
Federal Agency: US Department of Agriculture Assistance Listing # 10.555 and # 10.553
Pass-through Entity number: 88
Pass-through Agency: WV Department of Education CONDITION: The Board did not ensure compliance with the guidelines required for the National School Lunch Program and School Breakfast Program (the Programs) Special Tests and Provisions requirement. CONTEXT: We were unable to confirm that non-program adults are paying for meals prepared for the National School Lunch Program and School Breakfast Program. Outstanding receivables for meals were not being pursued for collection. CRITERIA: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Appendix XI Part 4 Section Child Nutrition Cluster Section III. N. 3. states, in part, that: "A [School Food Authority] SFA is required to account for all revenues and expenditures of its non-profit school food service in accordance with State requirements. An SFA must operate its food services on a non-profit basis; all revenue generated by the school food service must be used to operate and improve its food services (7 CFR sections 210.14(a), 210.14(c), 210.19(a)(2), 215.7(d)(1), 220.2, and 220.7(e)(1)(i)." Title 7 U.S. CFR Part 210 National School Lunch Program §210.14(a) states, in part, that: "...School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under § 210.19(a) of this part." Title 126 - Procedural Rule of the West Virginia Board of Education Series 85 - Policies of Operation Manual Child Nutrition Programs (Policy 4320 §126-85-83) states in part: "83.1. Meals served to teachers, administrators, custodians and other adults, such as school patrons, elderly volunteers and Foster Grandparents Program participants, must be priced so that the adult payments in combination with income from other sources (such as state or local fringe benefits or payroll funds, or funding from voluntary agencies) are sufficient to cover the meal costs. The charge for adult meals is determined by the county board of education and approved by the WVDE in the Agreement between SFA and SA. It is recommended that the charge(s) be established at or near the county per meal costs. Adult meals are not reimbursable nor counted in the commodity allocation entitlement." "83.3. Meals served to adults not directly involved in the child nutrition program such as administrators, teachers, aides, student teachers and other persons working or visiting in the school may not be served free of charge unless the cost of the meal is reimbursed to the program from another funding source. These meals must be reported as non-program adult meals." QUESTIONED COSTS: Unknown CAUSE: The Board does not have a Food Service Collection Policy. Further, the Board is not actively pursuing past due balances for purchases of meals. EFFECT: The Board has potentially used National School Lunch Program funds to subsidize meals for adults who are not eligible to receive free or reduced meals as part of the Program. Furthermore, failure to collect funds on the outstanding receivables inhibits the ability to capitalize such funds for operating and improving its food services. REPEAT FINDING: No RECOMMENDATION: The Upshur County Board of Education should comply with the requirements of the National School Lunch Program as required by the Code of Federal Regulations. In addition, the Board should establish and follow a collection policy and attempt to collect the outstanding balances on the receivables related to the National School Lunch Program.
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Board will develop a Food Service Collection Policy and attempt to collect outstanding balances on the receivables related to the National School Lunch Program.
Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2023 Assistance Listing #: 84.010A
Federal Agency: US Department of Education
Pass-through Entity number: 41
Pass-through Agency: WV Department of Education
Grant Title: Supporting Effective Instruction State Grants (Title II) Federal Award Number and Year: 2023 Assistance Listing #: 84.367 and 84.367A
Federal Agency: US Department of Education
Pass-through Entity number: 40
Pass-through Agency: WV Department of Education
Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2023 Assistance Listing #: 84.425U
Federal Agency: US Department of Education
Pass-through Entity number: 52
Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Title II, and ESSER programs. CONTEXT: Specifically, we identified the following:
Sixty non-payroll expenditure transactions were sampled from a population of 204 for Title I Grants to Local Education Agencies, of which Fifty-seven expenditures, or 95% of the sample size, totaling $208,000, did not have Program Director approval prior to payment. Fourteen expenditures, or 23% of the sample size, totaling $144,290, in which the contract was not available for review for contracted services. Twenty-three expenditures, or 38% of the sample size, totaling $30,152, in which purchase orders were not signed. One expenditure, or 2% of the sample size, totaling $2,783, in which an itemized invoice was not available for review. Three expenditures, or 5% of the sample size, totaling $8,003, in which the expenditure was not properly coded. One expenditure, or 2% of the sample size, totaling $6,485, in which the invoice was not itemized. Eleven expenditures, or 18% of the sample size, totaling $25,811, in which the purchase order was dated after the invoice. In addition, one expenditure was $120 more than the approved purchase order. One expenditure, or 2% of the sample size, totaling $23, in which State sales tax was paid. Twenty-three expenditures, or 38% of the sample size, totaling $25,989, which were not supported with adequate documentation. Nine non-payroll expenditures were sampled from a population of 53 for the Supporting Effective Instruction State Grants program (Title II), of which Three expenditures, or 33% of the sample size, totaling $2,827, did not have Program Director approval prior to payment. Four expenditures, or 44% of the sample size, totaling $6,545, in which the purchase order was not signed. Two expenditures, or 22% of the sample size, totaling $3,195, in which the purchase order was dated after the invoice. Sixty non-payroll expenditure transactions were sampled from a population of 93 for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Fifty-four expenditures, or 90% of the sample size, totaling $3,136,290, did not have Program Director approval prior to payment. One expenditure, or 2% of the sample size, totaling $27,665, in which the expenditure was not properly coded. Nineteen expenditures, or 32% of the sample size, totaling $176,763, in which the contract was not available for review for contracted services. Twenty-one expenditures, or 35% of the sample size, totaling $814,912, in which the purchase order was not signed. One expenditure, or 2% of the sample size, totaling $6,485, in which the invoice was not itemized. Twenty-four expenditures, or 40% of the sample size, totaling $940,689, in which the purchase order was dated after the invoice. In addition, one expenditure was $12,000 more than the approved purchase order. Sixteen expenditures, totaling $81,698, that did not have any bid documentation available for review. Ten expenditures, totaling $143,731, were not included in the approved ESSER budget. Six expenditures, totaling $118,731, in which ESSER funds were used to match other federal funds. Three expenditures, totaling $32,460, for activities such as passes or tickets where there was no support to indicate who received the passes or tickets. The final cost of a construction project was $81,589 more than the original bid and also exceeded the next two highest original bids with no documentation available for review regarding change orders or approvals thereof. The Board allowed a construction project to begin knowing that there was a deficit of $107,246 and no known available funding to complete the project. In addition, we tested 20 personnel files and related payroll expenditures for the above federal programs and noted the following items: One employee was overpaid $1,775 for supplemental duties based on support available for review. Six employees did not have a proper verification of education in their file. Five employees did not have a valid employment contract in their file. Four employees were paid supplements, totaling $55,351, and did not have support in their file. Five employees did not have a valid extra-duty employment contract in their file. Four employees did not have an IRS W-4 withholding form. Ten employees did not have a WV IT-104 withholding form. Twenty employees did not have voluntary withholding forms available for review. CRITERIA:
Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." Title 34 U.S. Code of Federal Regulations (CFR) Part 75, Subpart E §75.604 states, in part, that: "A grantee shall ensure that sufficient funds are available to meet any non-Federal share of the cost of constructing the facility." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Title II, and ESSER Programs. REPEAT FINDING: No RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, All expenditures be no greater than the remaining amount on their corresponding blanket purchase orders, Each expenditure be coded in accordance with the Board of Education's chart of accounts, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures. The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented. Management of the Upshur County Board of Education should follow the guidance set forth in Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75.
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Board has developed procedures to ensure that all purchased orders are approved before orders are placed, all expenditures are properly authorized by the respective program director and supporting documentation is adequately maintained. The Board is using a requisition form in Droplet to achieve this goal. All employees authorized to make or approve purchases have been trained on purchasing procedures outlined in the Purchasing Policies and Procedures and Procedures Manual for Local Educational Agencies in the State of West Virginia by the WVDE Office of School Finance on 2/23/2024.
Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2023 Assistance Listing #: 84.010A
Federal Agency: US Department of Education
Pass-through Entity number: 41
Pass-through Agency: WV Department of Education
Grant Title: Supporting Effective Instruction State Grants (Title II) Federal Award Number and Year: 2023 Assistance Listing #: 84.367 and 84.367A
Federal Agency: US Department of Education
Pass-through Entity number: 40
Pass-through Agency: WV Department of Education
Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2023 Assistance Listing #: 84.425U
Federal Agency: US Department of Education
Pass-through Entity number: 52
Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Title II, and ESSER programs. CONTEXT: Specifically, we identified the following:
Sixty non-payroll expenditure transactions were sampled from a population of 204 for Title I Grants to Local Education Agencies, of which Fifty-seven expenditures, or 95% of the sample size, totaling $208,000, did not have Program Director approval prior to payment. Fourteen expenditures, or 23% of the sample size, totaling $144,290, in which the contract was not available for review for contracted services. Twenty-three expenditures, or 38% of the sample size, totaling $30,152, in which purchase orders were not signed. One expenditure, or 2% of the sample size, totaling $2,783, in which an itemized invoice was not available for review. Three expenditures, or 5% of the sample size, totaling $8,003, in which the expenditure was not properly coded. One expenditure, or 2% of the sample size, totaling $6,485, in which the invoice was not itemized. Eleven expenditures, or 18% of the sample size, totaling $25,811, in which the purchase order was dated after the invoice. In addition, one expenditure was $120 more than the approved purchase order. One expenditure, or 2% of the sample size, totaling $23, in which State sales tax was paid. Twenty-three expenditures, or 38% of the sample size, totaling $25,989, which were not supported with adequate documentation. Nine non-payroll expenditures were sampled from a population of 53 for the Supporting Effective Instruction State Grants program (Title II), of which Three expenditures, or 33% of the sample size, totaling $2,827, did not have Program Director approval prior to payment. Four expenditures, or 44% of the sample size, totaling $6,545, in which the purchase order was not signed. Two expenditures, or 22% of the sample size, totaling $3,195, in which the purchase order was dated after the invoice. Sixty non-payroll expenditure transactions were sampled from a population of 93 for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Fifty-four expenditures, or 90% of the sample size, totaling $3,136,290, did not have Program Director approval prior to payment. One expenditure, or 2% of the sample size, totaling $27,665, in which the expenditure was not properly coded. Nineteen expenditures, or 32% of the sample size, totaling $176,763, in which the contract was not available for review for contracted services. Twenty-one expenditures, or 35% of the sample size, totaling $814,912, in which the purchase order was not signed. One expenditure, or 2% of the sample size, totaling $6,485, in which the invoice was not itemized. Twenty-four expenditures, or 40% of the sample size, totaling $940,689, in which the purchase order was dated after the invoice. In addition, one expenditure was $12,000 more than the approved purchase order. Sixteen expenditures, totaling $81,698, that did not have any bid documentation available for review. Ten expenditures, totaling $143,731, were not included in the approved ESSER budget. Six expenditures, totaling $118,731, in which ESSER funds were used to match other federal funds. Three expenditures, totaling $32,460, for activities such as passes or tickets where there was no support to indicate who received the passes or tickets. The final cost of a construction project was $81,589 more than the original bid and also exceeded the next two highest original bids with no documentation available for review regarding change orders or approvals thereof. The Board allowed a construction project to begin knowing that there was a deficit of $107,246 and no known available funding to complete the project. In addition, we tested 20 personnel files and related payroll expenditures for the above federal programs and noted the following items: One employee was overpaid $1,775 for supplemental duties based on support available for review. Six employees did not have a proper verification of education in their file. Five employees did not have a valid employment contract in their file. Four employees were paid supplements, totaling $55,351, and did not have support in their file. Five employees did not have a valid extra-duty employment contract in their file. Four employees did not have an IRS W-4 withholding form. Ten employees did not have a WV IT-104 withholding form. Twenty employees did not have voluntary withholding forms available for review. CRITERIA:
Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." Title 34 U.S. Code of Federal Regulations (CFR) Part 75, Subpart E §75.604 states, in part, that: "A grantee shall ensure that sufficient funds are available to meet any non-Federal share of the cost of constructing the facility." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Title II, and ESSER Programs. REPEAT FINDING: No RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, All expenditures be no greater than the remaining amount on their corresponding blanket purchase orders, Each expenditure be coded in accordance with the Board of Education's chart of accounts, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures. The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented. Management of the Upshur County Board of Education should follow the guidance set forth in Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75.
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Board has developed procedures to ensure that all purchased orders are approved before orders are placed, all expenditures are properly authorized by the respective program director and supporting documentation is adequately maintained. The Board is using a requisition form in Droplet to achieve this goal. All employees authorized to make or approve purchases have been trained on purchasing procedures outlined in the Purchasing Policies and Procedures and Procedures Manual for Local Educational Agencies in the State of West Virginia by the WVDE Office of School Finance on 2/23/2024.
Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2023 Assistance Listing #: 84.010A
Federal Agency: US Department of Education
Pass-through Entity number: 41
Pass-through Agency: WV Department of Education
Grant Title: Supporting Effective Instruction State Grants (Title II) Federal Award Number and Year: 2023 Assistance Listing #: 84.367 and 84.367A
Federal Agency: US Department of Education
Pass-through Entity number: 40
Pass-through Agency: WV Department of Education
Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2023 Assistance Listing #: 84.425U
Federal Agency: US Department of Education
Pass-through Entity number: 52
Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Title II, and ESSER programs. CONTEXT: Specifically, we identified the following:
Sixty non-payroll expenditure transactions were sampled from a population of 204 for Title I Grants to Local Education Agencies, of which Fifty-seven expenditures, or 95% of the sample size, totaling $208,000, did not have Program Director approval prior to payment. Fourteen expenditures, or 23% of the sample size, totaling $144,290, in which the contract was not available for review for contracted services. Twenty-three expenditures, or 38% of the sample size, totaling $30,152, in which purchase orders were not signed. One expenditure, or 2% of the sample size, totaling $2,783, in which an itemized invoice was not available for review. Three expenditures, or 5% of the sample size, totaling $8,003, in which the expenditure was not properly coded. One expenditure, or 2% of the sample size, totaling $6,485, in which the invoice was not itemized. Eleven expenditures, or 18% of the sample size, totaling $25,811, in which the purchase order was dated after the invoice. In addition, one expenditure was $120 more than the approved purchase order. One expenditure, or 2% of the sample size, totaling $23, in which State sales tax was paid. Twenty-three expenditures, or 38% of the sample size, totaling $25,989, which were not supported with adequate documentation. Nine non-payroll expenditures were sampled from a population of 53 for the Supporting Effective Instruction State Grants program (Title II), of which Three expenditures, or 33% of the sample size, totaling $2,827, did not have Program Director approval prior to payment. Four expenditures, or 44% of the sample size, totaling $6,545, in which the purchase order was not signed. Two expenditures, or 22% of the sample size, totaling $3,195, in which the purchase order was dated after the invoice. Sixty non-payroll expenditure transactions were sampled from a population of 93 for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Fifty-four expenditures, or 90% of the sample size, totaling $3,136,290, did not have Program Director approval prior to payment. One expenditure, or 2% of the sample size, totaling $27,665, in which the expenditure was not properly coded. Nineteen expenditures, or 32% of the sample size, totaling $176,763, in which the contract was not available for review for contracted services. Twenty-one expenditures, or 35% of the sample size, totaling $814,912, in which the purchase order was not signed. One expenditure, or 2% of the sample size, totaling $6,485, in which the invoice was not itemized. Twenty-four expenditures, or 40% of the sample size, totaling $940,689, in which the purchase order was dated after the invoice. In addition, one expenditure was $12,000 more than the approved purchase order. Sixteen expenditures, totaling $81,698, that did not have any bid documentation available for review. Ten expenditures, totaling $143,731, were not included in the approved ESSER budget. Six expenditures, totaling $118,731, in which ESSER funds were used to match other federal funds. Three expenditures, totaling $32,460, for activities such as passes or tickets where there was no support to indicate who received the passes or tickets. The final cost of a construction project was $81,589 more than the original bid and also exceeded the next two highest original bids with no documentation available for review regarding change orders or approvals thereof. The Board allowed a construction project to begin knowing that there was a deficit of $107,246 and no known available funding to complete the project. In addition, we tested 20 personnel files and related payroll expenditures for the above federal programs and noted the following items: One employee was overpaid $1,775 for supplemental duties based on support available for review. Six employees did not have a proper verification of education in their file. Five employees did not have a valid employment contract in their file. Four employees were paid supplements, totaling $55,351, and did not have support in their file. Five employees did not have a valid extra-duty employment contract in their file. Four employees did not have an IRS W-4 withholding form. Ten employees did not have a WV IT-104 withholding form. Twenty employees did not have voluntary withholding forms available for review. CRITERIA:
Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." Title 34 U.S. Code of Federal Regulations (CFR) Part 75, Subpart E §75.604 states, in part, that: "A grantee shall ensure that sufficient funds are available to meet any non-Federal share of the cost of constructing the facility." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Title II, and ESSER Programs. REPEAT FINDING: No RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, All expenditures be no greater than the remaining amount on their corresponding blanket purchase orders, Each expenditure be coded in accordance with the Board of Education's chart of accounts, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures. The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented. Management of the Upshur County Board of Education should follow the guidance set forth in Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75.
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Board has developed procedures to ensure that all purchased orders are approved before orders are placed, all expenditures are properly authorized by the respective program director and supporting documentation is adequately maintained. The Board is using a requisition form in Droplet to achieve this goal. All employees authorized to make or approve purchases have been trained on purchasing procedures outlined in the Purchasing Policies and Procedures and Procedures Manual for Local Educational Agencies in the State of West Virginia by the WVDE Office of School Finance on 2/23/2024.
Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2023 Assistance Listing #: 84.010A
Federal Agency: US Department of Education
Pass-through Entity number: 41
Pass-through Agency: WV Department of Education
Grant Title: Supporting Effective Instruction State Grants (Title II) Federal Award Number and Year: 2023 Assistance Listing #: 84.367 and 84.367A
Federal Agency: US Department of Education
Pass-through Entity number: 40
Pass-through Agency: WV Department of Education
Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2023 Assistance Listing #: 84.425U
Federal Agency: US Department of Education
Pass-through Entity number: 52
Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Title II, and ESSER programs. CONTEXT: Specifically, we identified the following:
Sixty non-payroll expenditure transactions were sampled from a population of 204 for Title I Grants to Local Education Agencies, of which Fifty-seven expenditures, or 95% of the sample size, totaling $208,000, did not have Program Director approval prior to payment. Fourteen expenditures, or 23% of the sample size, totaling $144,290, in which the contract was not available for review for contracted services. Twenty-three expenditures, or 38% of the sample size, totaling $30,152, in which purchase orders were not signed. One expenditure, or 2% of the sample size, totaling $2,783, in which an itemized invoice was not available for review. Three expenditures, or 5% of the sample size, totaling $8,003, in which the expenditure was not properly coded. One expenditure, or 2% of the sample size, totaling $6,485, in which the invoice was not itemized. Eleven expenditures, or 18% of the sample size, totaling $25,811, in which the purchase order was dated after the invoice. In addition, one expenditure was $120 more than the approved purchase order. One expenditure, or 2% of the sample size, totaling $23, in which State sales tax was paid. Twenty-three expenditures, or 38% of the sample size, totaling $25,989, which were not supported with adequate documentation. Nine non-payroll expenditures were sampled from a population of 53 for the Supporting Effective Instruction State Grants program (Title II), of which Three expenditures, or 33% of the sample size, totaling $2,827, did not have Program Director approval prior to payment. Four expenditures, or 44% of the sample size, totaling $6,545, in which the purchase order was not signed. Two expenditures, or 22% of the sample size, totaling $3,195, in which the purchase order was dated after the invoice. Sixty non-payroll expenditure transactions were sampled from a population of 93 for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Fifty-four expenditures, or 90% of the sample size, totaling $3,136,290, did not have Program Director approval prior to payment. One expenditure, or 2% of the sample size, totaling $27,665, in which the expenditure was not properly coded. Nineteen expenditures, or 32% of the sample size, totaling $176,763, in which the contract was not available for review for contracted services. Twenty-one expenditures, or 35% of the sample size, totaling $814,912, in which the purchase order was not signed. One expenditure, or 2% of the sample size, totaling $6,485, in which the invoice was not itemized. Twenty-four expenditures, or 40% of the sample size, totaling $940,689, in which the purchase order was dated after the invoice. In addition, one expenditure was $12,000 more than the approved purchase order. Sixteen expenditures, totaling $81,698, that did not have any bid documentation available for review. Ten expenditures, totaling $143,731, were not included in the approved ESSER budget. Six expenditures, totaling $118,731, in which ESSER funds were used to match other federal funds. Three expenditures, totaling $32,460, for activities such as passes or tickets where there was no support to indicate who received the passes or tickets. The final cost of a construction project was $81,589 more than the original bid and also exceeded the next two highest original bids with no documentation available for review regarding change orders or approvals thereof. The Board allowed a construction project to begin knowing that there was a deficit of $107,246 and no known available funding to complete the project. In addition, we tested 20 personnel files and related payroll expenditures for the above federal programs and noted the following items: One employee was overpaid $1,775 for supplemental duties based on support available for review. Six employees did not have a proper verification of education in their file. Five employees did not have a valid employment contract in their file. Four employees were paid supplements, totaling $55,351, and did not have support in their file. Five employees did not have a valid extra-duty employment contract in their file. Four employees did not have an IRS W-4 withholding form. Ten employees did not have a WV IT-104 withholding form. Twenty employees did not have voluntary withholding forms available for review. CRITERIA:
Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." Title 34 U.S. Code of Federal Regulations (CFR) Part 75, Subpart E §75.604 states, in part, that: "A grantee shall ensure that sufficient funds are available to meet any non-Federal share of the cost of constructing the facility." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Title II, and ESSER Programs. REPEAT FINDING: No RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, All expenditures be no greater than the remaining amount on their corresponding blanket purchase orders, Each expenditure be coded in accordance with the Board of Education's chart of accounts, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures. The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented. Management of the Upshur County Board of Education should follow the guidance set forth in Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75.
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Board has developed procedures to ensure that all purchased orders are approved before orders are placed, all expenditures are properly authorized by the respective program director and supporting documentation is adequately maintained. The Board is using a requisition form in Droplet to achieve this goal. All employees authorized to make or approve purchases have been trained on purchasing procedures outlined in the Purchasing Policies and Procedures and Procedures Manual for Local Educational Agencies in the State of West Virginia by the WVDE Office of School Finance on 2/23/2024.
Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER)
Federal Award Number and Year: 2023 Assistance Listing #: 84.425U Federal Agency: US Department of Education
Pass-through Entity number: 52
Pass-through Agency: WV Department of Education
CONDITION: The Board did not ensure that equipment purchased with funds from the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) was properly tracked through an inventory list. In addition, the Board was unable to provide evidence of prior written approval for a construction project. CONTEXT: Specifically, we identified the following: Equipment purchased through a lease purchase agreement dated May 15, 2020, totaling $2,147,541, was not placed on an equipment inventory listing maintained for each school. The final lease payment of $536,829 was made during fiscal year 2023.
Additional equipment, totaling $38,475, was not placed on an equipment inventory listing maintained for each school.
The Board was unable to provide documentation of prior written approval from the West Virginia Department of Education for a HVAC construction project, totaling $1,777,483. CRITERIA: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Appendix XI Part 4 Section 84.425-ESF Section 1 - Elementary and Secondary Education states, in part, that: "F. Equipment/Real Property Management Any purchases with ESF funds in this category are subject to applicable inventory control, log maintenance, and disposition requirements consistent with Part 3, Section F, "Equipment /Real Property Management" of the 2023 Compliance Supplement. Auditors should determine whether governors, SEAs, and/or subrecipients received prior approval for capital expenditures for equipment acquisition or improvements to land, buildings, or equipment. (1) For capital equipment or improvements to land, buildings, or equipment that were purchased with grant funds, the governor or SEA must receive prior approval from ED. (2) For capital equipment or improvements to land, buildings, or equipment that were purchased with grant funds, the governor or SEA pass-through agency must provide prior approval to subrecipients." Title 2 U.S. Code of Federal Regulations (CFR) Part 200.439 Equipment and other capital expenditures, states, in part, that: "(b) (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. "(b) (2) Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5,000 or more have the prior written approval of the Federal awarding agency or pass-through entity. Title 2 U.S. Code of Federal Regulations (CFR) Part 200.313 Equipment states, in part, that: "... (d)(1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated." Title 7 CFR Section 3015.169 states, in part, that: "Recipient procedures for managing equipment shall, as a minimum, meet the following requirements (including replacement equipment) until such actions as transfer, replacement or disposal takes place: (a) Property records shall be maintained accurately. (Subpart D of this part contains retention and access requirements for these records.) The records shall include for each item of equipment the following: (1) A description of the equipment including manufacturer's serial numbers. (2) An identification number, such as the manufacturer's serial number. (3) Identification of the grant under which the recipient acquired the equipment. (4) The information needed to calculate the Federal share of the equipment (see § 3015.172). (5) Acquisition date and unit acquisition cost. (6) Location, use and condition of the equipment and the date the information was reported. (7) All pertinent information on the ultimate transfer, replacement, or disposal of the equipment. ... (b) Every two years, at a minimum, a physical inventory shall be conducted and the results reconciled with the property records to verify the existence, current utilization, and continued need for the equipment. Any discrepancies between quantities determined by the physical inspection and those shown in the accounting records shall be investigated to determine the causes of the differences." QUESTIONED COSTS: Unknown CAUSE: The Board did not have controls that would ensure inventory is properly tracked in accordance with all requirements of the ESSER program. Additionally, controls were not in place to track purchases of equipment. Also, the Board did not have controls in place to ensure that proper written approval was obtained in advance of starting a construction project. EFFECT: The Board did not properly track all equipment on an inventory list. Additionally, documentation was not available to verify compliance with requirements for approval of capital expenditures. This issue contributed to the disclaimer of opinion for the ESSER program. REPEAT FINDING: No RECOMMENDATION: The Upshur County Board of Education should establish and follow policies and procedures that will ensure compliance with requirements of the United States Department of Education's equipment management requirements and the requirements applicable to the ESSER program. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Board will establish procedures that will ensure compliance with requirements of the United States Department of Education's equipment management requirements applicable to the ESSER program.