Audit 316515

Finding 2022-001 – Unallowable Expenditures Federal Programs: U.S. Department of Education  ALN 84.425D and 84.425U - COVID-19 - Education Stabilization Fund (ESF)  ALN 84.010 - Title I Grants to Local Educational Agencies (Title I) Criteria: Section 18003(d) of the CARES Act, section 313(3) of the CRRSA Act and section 2001 (e) of the ARP act provide guidance on allowable uses of ESF funds. The applicable compliance supplement section for ALN 84.010 provides guidance on allowable uses of Title I funds. Condition: During the audit of allowable cost related to the ESF program, it was noted that management improperly assessed the allowability of four expenditures that occurred during 2022. Portions of these expenses were also funded by Title I. These expenditures were deemed to be unallowable due to the fact that the billed services were not actually delivered to the Organization. Context: During our testing of allowable costs related to the ESF Program, we selected a sample of 60 expenditures in which 4 expenditures were noted to be unallowable per the grant guidance. We further evaluated the remaining population, along with the results of an investigation performed by an external consultant at management’s request, which identified the total of unallowable expenditures to be $939,800. This total amount falls into the following categories:  $630,000 was related to ESF funding expenditures incurred prior to June 30, 2022  $210,000 was related to ESF funding expenditures incurred subsequent to June 30, 2022.  $49,800 was related to Title I funding expenditures incurred prior to June 30, 2022  $50,000 was related non-federal funding sources Effect: The improper assessment of unallowable expenditures lead to an improper recording and claiming of federal funding. Cause: The above condition appears to be a result of a lack of internal controls surrounding the assessment of vendors and ensuring that services identified on invoices were being provided and received. Questioned Cost: $840,000 - ALN 84.425D and 84.425U $49,800 - ALN 84.010 Repeat Finding: N/A Recommendation: We recommend that management modify their internal control procedures surrounding the process of selecting and adding new vendors, as well as the processing of invoices for payment. Steps should be in place to verify that the services included on invoices were actually received by the Organization. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Finding 2022-001 – Unallowable Expenditures Federal Programs: U.S. Department of Education  ALN 84.425D and 84.425U - COVID-19 - Education Stabilization Fund (ESF)  ALN 84.010 - Title I Grants to Local Educational Agencies (Title I) Criteria: Section 18003(d) of the CARES Act, section 313(3) of the CRRSA Act and section 2001 (e) of the ARP act provide guidance on allowable uses of ESF funds. The applicable compliance supplement section for ALN 84.010 provides guidance on allowable uses of Title I funds. Condition: During the audit of allowable cost related to the ESF program, it was noted that management improperly assessed the allowability of four expenditures that occurred during 2022. Portions of these expenses were also funded by Title I. These expenditures were deemed to be unallowable due to the fact that the billed services were not actually delivered to the Organization. Context: During our testing of allowable costs related to the ESF Program, we selected a sample of 60 expenditures in which 4 expenditures were noted to be unallowable per the grant guidance. We further evaluated the remaining population, along with the results of an investigation performed by an external consultant at management’s request, which identified the total of unallowable expenditures to be $939,800. This total amount falls into the following categories:  $630,000 was related to ESF funding expenditures incurred prior to June 30, 2022  $210,000 was related to ESF funding expenditures incurred subsequent to June 30, 2022.  $49,800 was related to Title I funding expenditures incurred prior to June 30, 2022  $50,000 was related non-federal funding sources Effect: The improper assessment of unallowable expenditures lead to an improper recording and claiming of federal funding. Cause: The above condition appears to be a result of a lack of internal controls surrounding the assessment of vendors and ensuring that services identified on invoices were being provided and received. Questioned Cost: $840,000 - ALN 84.425D and 84.425U $49,800 - ALN 84.010 Repeat Finding: N/A Recommendation: We recommend that management modify their internal control procedures surrounding the process of selecting and adding new vendors, as well as the processing of invoices for payment. Steps should be in place to verify that the services included on invoices were actually received by the Organization. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Finding 2022-001 – Unallowable Expenditures Federal Programs: U.S. Department of Education  ALN 84.425D and 84.425U - COVID-19 - Education Stabilization Fund (ESF)  ALN 84.010 - Title I Grants to Local Educational Agencies (Title I) Criteria: Section 18003(d) of the CARES Act, section 313(3) of the CRRSA Act and section 2001 (e) of the ARP act provide guidance on allowable uses of ESF funds. The applicable compliance supplement section for ALN 84.010 provides guidance on allowable uses of Title I funds. Condition: During the audit of allowable cost related to the ESF program, it was noted that management improperly assessed the allowability of four expenditures that occurred during 2022. Portions of these expenses were also funded by Title I. These expenditures were deemed to be unallowable due to the fact that the billed services were not actually delivered to the Organization. Context: During our testing of allowable costs related to the ESF Program, we selected a sample of 60 expenditures in which 4 expenditures were noted to be unallowable per the grant guidance. We further evaluated the remaining population, along with the results of an investigation performed by an external consultant at management’s request, which identified the total of unallowable expenditures to be $939,800. This total amount falls into the following categories:  $630,000 was related to ESF funding expenditures incurred prior to June 30, 2022  $210,000 was related to ESF funding expenditures incurred subsequent to June 30, 2022.  $49,800 was related to Title I funding expenditures incurred prior to June 30, 2022  $50,000 was related non-federal funding sources Effect: The improper assessment of unallowable expenditures lead to an improper recording and claiming of federal funding. Cause: The above condition appears to be a result of a lack of internal controls surrounding the assessment of vendors and ensuring that services identified on invoices were being provided and received. Questioned Cost: $840,000 - ALN 84.425D and 84.425U $49,800 - ALN 84.010 Repeat Finding: N/A Recommendation: We recommend that management modify their internal control procedures surrounding the process of selecting and adding new vendors, as well as the processing of invoices for payment. Steps should be in place to verify that the services included on invoices were actually received by the Organization. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Finding 2022-001 – Unallowable Expenditures Federal Programs: U.S. Department of Education  ALN 84.425D and 84.425U - COVID-19 - Education Stabilization Fund (ESF)  ALN 84.010 - Title I Grants to Local Educational Agencies (Title I) Criteria: Section 18003(d) of the CARES Act, section 313(3) of the CRRSA Act and section 2001 (e) of the ARP act provide guidance on allowable uses of ESF funds. The applicable compliance supplement section for ALN 84.010 provides guidance on allowable uses of Title I funds. Condition: During the audit of allowable cost related to the ESF program, it was noted that management improperly assessed the allowability of four expenditures that occurred during 2022. Portions of these expenses were also funded by Title I. These expenditures were deemed to be unallowable due to the fact that the billed services were not actually delivered to the Organization. Context: During our testing of allowable costs related to the ESF Program, we selected a sample of 60 expenditures in which 4 expenditures were noted to be unallowable per the grant guidance. We further evaluated the remaining population, along with the results of an investigation performed by an external consultant at management’s request, which identified the total of unallowable expenditures to be $939,800. This total amount falls into the following categories:  $630,000 was related to ESF funding expenditures incurred prior to June 30, 2022  $210,000 was related to ESF funding expenditures incurred subsequent to June 30, 2022.  $49,800 was related to Title I funding expenditures incurred prior to June 30, 2022  $50,000 was related non-federal funding sources Effect: The improper assessment of unallowable expenditures lead to an improper recording and claiming of federal funding. Cause: The above condition appears to be a result of a lack of internal controls surrounding the assessment of vendors and ensuring that services identified on invoices were being provided and received. Questioned Cost: $840,000 - ALN 84.425D and 84.425U $49,800 - ALN 84.010 Repeat Finding: N/A Recommendation: We recommend that management modify their internal control procedures surrounding the process of selecting and adding new vendors, as well as the processing of invoices for payment. Steps should be in place to verify that the services included on invoices were actually received by the Organization. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Finding 2022-001 – Unallowable Expenditures Federal Programs: U.S. Department of Education  ALN 84.425D and 84.425U - COVID-19 - Education Stabilization Fund (ESF)  ALN 84.010 - Title I Grants to Local Educational Agencies (Title I) Criteria: Section 18003(d) of the CARES Act, section 313(3) of the CRRSA Act and section 2001 (e) of the ARP act provide guidance on allowable uses of ESF funds. The applicable compliance supplement section for ALN 84.010 provides guidance on allowable uses of Title I funds. Condition: During the audit of allowable cost related to the ESF program, it was noted that management improperly assessed the allowability of four expenditures that occurred during 2022. Portions of these expenses were also funded by Title I. These expenditures were deemed to be unallowable due to the fact that the billed services were not actually delivered to the Organization. Context: During our testing of allowable costs related to the ESF Program, we selected a sample of 60 expenditures in which 4 expenditures were noted to be unallowable per the grant guidance. We further evaluated the remaining population, along with the results of an investigation performed by an external consultant at management’s request, which identified the total of unallowable expenditures to be $939,800. This total amount falls into the following categories:  $630,000 was related to ESF funding expenditures incurred prior to June 30, 2022  $210,000 was related to ESF funding expenditures incurred subsequent to June 30, 2022.  $49,800 was related to Title I funding expenditures incurred prior to June 30, 2022  $50,000 was related non-federal funding sources Effect: The improper assessment of unallowable expenditures lead to an improper recording and claiming of federal funding. Cause: The above condition appears to be a result of a lack of internal controls surrounding the assessment of vendors and ensuring that services identified on invoices were being provided and received. Questioned Cost: $840,000 - ALN 84.425D and 84.425U $49,800 - ALN 84.010 Repeat Finding: N/A Recommendation: We recommend that management modify their internal control procedures surrounding the process of selecting and adding new vendors, as well as the processing of invoices for payment. Steps should be in place to verify that the services included on invoices were actually received by the Organization. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Finding 2022-001 – Unallowable Expenditures Federal Programs: U.S. Department of Education  ALN 84.425D and 84.425U - COVID-19 - Education Stabilization Fund (ESF)  ALN 84.010 - Title I Grants to Local Educational Agencies (Title I) Criteria: Section 18003(d) of the CARES Act, section 313(3) of the CRRSA Act and section 2001 (e) of the ARP act provide guidance on allowable uses of ESF funds. The applicable compliance supplement section for ALN 84.010 provides guidance on allowable uses of Title I funds. Condition: During the audit of allowable cost related to the ESF program, it was noted that management improperly assessed the allowability of four expenditures that occurred during 2022. Portions of these expenses were also funded by Title I. These expenditures were deemed to be unallowable due to the fact that the billed services were not actually delivered to the Organization. Context: During our testing of allowable costs related to the ESF Program, we selected a sample of 60 expenditures in which 4 expenditures were noted to be unallowable per the grant guidance. We further evaluated the remaining population, along with the results of an investigation performed by an external consultant at management’s request, which identified the total of unallowable expenditures to be $939,800. This total amount falls into the following categories:  $630,000 was related to ESF funding expenditures incurred prior to June 30, 2022  $210,000 was related to ESF funding expenditures incurred subsequent to June 30, 2022.  $49,800 was related to Title I funding expenditures incurred prior to June 30, 2022  $50,000 was related non-federal funding sources Effect: The improper assessment of unallowable expenditures lead to an improper recording and claiming of federal funding. Cause: The above condition appears to be a result of a lack of internal controls surrounding the assessment of vendors and ensuring that services identified on invoices were being provided and received. Questioned Cost: $840,000 - ALN 84.425D and 84.425U $49,800 - ALN 84.010 Repeat Finding: N/A Recommendation: We recommend that management modify their internal control procedures surrounding the process of selecting and adding new vendors, as well as the processing of invoices for payment. Steps should be in place to verify that the services included on invoices were actually received by the Organization. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.