FINDING 2021-002 – Lack of Written Policies for Federal Grants (Repeated from Prior Year Findings 20-003, 19-004, 18-003 and 17-002)
Federal Program: Individuals with Disabilities Education Act (IDEA) Improvement Grant - Part D
Project No: 20-4631-RN and 21-4631-RN
Federal Assistance
Listing Number: 84.323A
Passed Through: Illinois State Board of Education
Federal Agency: U.S. Department of Education
Criteria/Specific Requirement:
The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), contained in 2 CFR Part 200, became effective for all federal award programs administered by the Regional Office of Education #47 that were issued on or after December 26, 2014. Specifically, the Uniform Guidance (2 CFR 200.302(b)(7)) requires the Regional Office to have written procedures related to cash management and for determining the allowability of costs in accordance with Subpart E – Cost Principles of the Uniform Guidance and the terms and conditions of the federal award.
Condition:
As of April 2021, Regional Office developed, but did not implement written procedures concerning cash management, the determination of allowability of costs in accordance with Subpart E – Cost Principles of the Uniform Guidance and the terms and conditions of the federal award. For the period of July 2020 through March 2021 the Regional Office utilized informal procedures in which each purchase made or cost allocated to the IDEA – Improvement Grant - Part D was reviewed for allowability by an individual with knowledge of the budget, allowable costs and activities, and the cash management requirements. The allowability determinations were based on the amounts included in the budgets for the IDEA – Improvement Grant - Part D approved by, and the grant periods set by, the Illinois State Board of Education.
Questioned Costs:
None
Context:
The Regional Office of Education #47 expended $1,919,044 of federal awards in total during fiscal year 2021, including $978,533 for the IDEA –Improvement Grant - Part D.
Effect:
Not having written procedures for the full period under review concerning cash management and cost principles increases the risk that grant payments will not be requested on the reimbursement basis and unallowable costs will be allocated to federal award programs.
Cause:
Regional Office management indicated they developed the written procedures late into the fiscal year, and were unable to fully implement the Uniform Guidance during the full fiscal year.
Recommendation:
We recommend the Regional Office implement written procedures to comply with the requirements related to cash management for determining the allowability of costs in accordance with Subpart E –Cost Principles of the Uniform Guidance and the terms and conditions of the federal award.
Management’s Response:
Effective April 2021, the Regional Office has developed written policies and procedures related to the Uniform Guidance.
FINDING 2021-003 - Subrecipient Monitoring (Repeated from Prior Year Findings 20-004, 19-005, 18-004, and 17-003)
Federal Program: Individuals with Disabilities Education Act (IDEA) Improvement Grant - Part D Project No: 20-4631-RN and 21-4631-RN
Federal Assistance
Listing Number: 84.323A
Passed Through: Illinois State Board of Education
Federal Agency: U.S. Department of Education
Criteria/Specific Requirement:
A. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) require the Regional Office to ensure any subrecipient monitoring using federal funds be consistent with the standards set forth in the Uniform Guidance at 2 CFR 200.332.
B. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 Internal Controls states the following: “The non-Federal entity must:
Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.”
Condition:
The ROE does not have effective internal controls over subrecipient monitoring. Furthermore, ROE #47 was not properly monitoring subrecipients in accordance with the Uniform Guidance standards. During audit testing procedures it was determined that ROE #47:
Number of Subrecipients
a. Did not evaluate the risk of noncompliance with Federal statutes, regulations,
and the terms and conditions of the subaward. 2 of 2
b. Did not conduct subrecipient monitoring procedures. 2 of 2
c. Did not determine whether the subrecipient met the 2 CFR 200 Subpart F Audit
requirements criteria for a single audit. 2 of 2
Questioned Costs:
None
Context:
The Regional Office of Education #47 expended a total of $1,919,044 of federal awards in fiscal year 2021, of which $879,747 in IDEA –Improvement Grant –Part D were passed-through to subrecipients.
Effect:
The Regional Office of Education #47 is not in compliance with Title 2 of the Code of Federal Regulations (CFR) Part 200.332 as it relates to subrecipient monitoring requirements. Additionally, the effect of noncompliance can result in questioned costs.
Cause:
The Regional Office of Education #47 experienced staff turnover and did not formally document policies and procedures that provide controls and structures to ensure all of its subrecipient monitoring accountabilities are conducted and complied with.
Recommendation:
We recommend that the Regional Office of Education #47 establish and maintain effective internal control over federal awards to ensure subrecipients are properly monitored as required by 2 CFR 200.332. This includes:
a. Evaluating the risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the
subaward;
b. Conducting subrecipient monitoring procedures; and
c. Determining whether the subrecipient met the requirement criteria of 2 CFR 200 Subpart F Audit requirements
for a single audit.
Management’s Response:
Management agrees with this finding.
FINDING 2021-002 – Lack of Written Policies for Federal Grants (Repeated from Prior Year Findings 20-003, 19-004, 18-003 and 17-002)
Federal Program: Individuals with Disabilities Education Act (IDEA) Improvement Grant - Part D
Project No: 20-4631-RN and 21-4631-RN
Federal Assistance
Listing Number: 84.323A
Passed Through: Illinois State Board of Education
Federal Agency: U.S. Department of Education
Criteria/Specific Requirement:
The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), contained in 2 CFR Part 200, became effective for all federal award programs administered by the Regional Office of Education #47 that were issued on or after December 26, 2014. Specifically, the Uniform Guidance (2 CFR 200.302(b)(7)) requires the Regional Office to have written procedures related to cash management and for determining the allowability of costs in accordance with Subpart E – Cost Principles of the Uniform Guidance and the terms and conditions of the federal award.
Condition:
As of April 2021, Regional Office developed, but did not implement written procedures concerning cash management, the determination of allowability of costs in accordance with Subpart E – Cost Principles of the Uniform Guidance and the terms and conditions of the federal award. For the period of July 2020 through March 2021 the Regional Office utilized informal procedures in which each purchase made or cost allocated to the IDEA – Improvement Grant - Part D was reviewed for allowability by an individual with knowledge of the budget, allowable costs and activities, and the cash management requirements. The allowability determinations were based on the amounts included in the budgets for the IDEA – Improvement Grant - Part D approved by, and the grant periods set by, the Illinois State Board of Education.
Questioned Costs:
None
Context:
The Regional Office of Education #47 expended $1,919,044 of federal awards in total during fiscal year 2021, including $978,533 for the IDEA –Improvement Grant - Part D.
Effect:
Not having written procedures for the full period under review concerning cash management and cost principles increases the risk that grant payments will not be requested on the reimbursement basis and unallowable costs will be allocated to federal award programs.
Cause:
Regional Office management indicated they developed the written procedures late into the fiscal year, and were unable to fully implement the Uniform Guidance during the full fiscal year.
Recommendation:
We recommend the Regional Office implement written procedures to comply with the requirements related to cash management for determining the allowability of costs in accordance with Subpart E –Cost Principles of the Uniform Guidance and the terms and conditions of the federal award.
Management’s Response:
Effective April 2021, the Regional Office has developed written policies and procedures related to the Uniform Guidance.
FINDING 2021-003 - Subrecipient Monitoring (Repeated from Prior Year Findings 20-004, 19-005, 18-004, and 17-003)
Federal Program: Individuals with Disabilities Education Act (IDEA) Improvement Grant - Part D Project No: 20-4631-RN and 21-4631-RN
Federal Assistance
Listing Number: 84.323A
Passed Through: Illinois State Board of Education
Federal Agency: U.S. Department of Education
Criteria/Specific Requirement:
A. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) require the Regional Office to ensure any subrecipient monitoring using federal funds be consistent with the standards set forth in the Uniform Guidance at 2 CFR 200.332.
B. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 Internal Controls states the following: “The non-Federal entity must:
Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.”
Condition:
The ROE does not have effective internal controls over subrecipient monitoring. Furthermore, ROE #47 was not properly monitoring subrecipients in accordance with the Uniform Guidance standards. During audit testing procedures it was determined that ROE #47:
Number of Subrecipients
a. Did not evaluate the risk of noncompliance with Federal statutes, regulations,
and the terms and conditions of the subaward. 2 of 2
b. Did not conduct subrecipient monitoring procedures. 2 of 2
c. Did not determine whether the subrecipient met the 2 CFR 200 Subpart F Audit
requirements criteria for a single audit. 2 of 2
Questioned Costs:
None
Context:
The Regional Office of Education #47 expended a total of $1,919,044 of federal awards in fiscal year 2021, of which $879,747 in IDEA –Improvement Grant –Part D were passed-through to subrecipients.
Effect:
The Regional Office of Education #47 is not in compliance with Title 2 of the Code of Federal Regulations (CFR) Part 200.332 as it relates to subrecipient monitoring requirements. Additionally, the effect of noncompliance can result in questioned costs.
Cause:
The Regional Office of Education #47 experienced staff turnover and did not formally document policies and procedures that provide controls and structures to ensure all of its subrecipient monitoring accountabilities are conducted and complied with.
Recommendation:
We recommend that the Regional Office of Education #47 establish and maintain effective internal control over federal awards to ensure subrecipients are properly monitored as required by 2 CFR 200.332. This includes:
a. Evaluating the risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the
subaward;
b. Conducting subrecipient monitoring procedures; and
c. Determining whether the subrecipient met the requirement criteria of 2 CFR 200 Subpart F Audit requirements
for a single audit.
Management’s Response:
Management agrees with this finding.