Audit 322700

Finding 2023-001 Material Weakness: Allowable Costs/Costs Principles – Compliance and Control Finding ALN 84.287 – Twenty-First Century Community Learning Centers Federal Agency: U.S. Department of Education Pass-Through Entity: Missouri Department of Education Fiscal Year: For the year ended December 31, 2023 Criteria or Specific Requirement: 2 CFR section 200.430(i)(1) requires charges to federal awards for salaries and wages be based on records that accurately reflect the work performed. Condition: We noted through procedures performed that allocated salaries and wages as well as related employee benefits and payroll taxes were based on an estimated percentage of time to be devoted to the grant-funded programs as opposed to actual hours worked, resulting in a potential over-allocation or under-allocation of expenditures. Cause: Internal controls over compliance put in place by management were not designed effectively to ensure a review of allocated versus actual hours work by the federal grant was performed and that proof of such reviews was documented and retained. Effect: The possibility exists that noncompliance with federal requirements related to allowable costs and allowable activities could go undetected as there is no review or true up process for actual hours worked related to the program. Questioned Costs: In a sample of 40 expenditures, total known question costs found totaled $46,571. Likely questioned costs exceed $25,000. Context: Of the sample of 40 individual costs charged to the grant, 12 were allocated salary costs and related employee benefits and payroll taxes of full-time, salaried employees. For these 12 payroll related items, allocated costs were based on the estimated percentage of time expected to be devoted by each employee to the grant-funded program. Unleashing Potential did not maintain documentation to support the actual time and effort of each employee charged to the grant. Identification as a Repeat Finding: 2022-001 Recommendation: For employees working on grant-funded programs, management should develop a time-keeping process to track and verify that the amount of time charged to the grant is accurate and based on the employee’s time spent working on the grant. Documented review and approval of this time allocation by the employee’s supervisor should be maintained. Views of Responsible Officials: Management will implement procedures to assure that all costs charged to the 21st Century program are reviewed by a competent individual, and those reviews will be documented.

Finding 2023-001 Material Weakness: Allowable Costs/Costs Principles – Compliance and Control Finding ALN 84.287 – Twenty-First Century Community Learning Centers Federal Agency: U.S. Department of Education Pass-Through Entity: Missouri Department of Education Fiscal Year: For the year ended December 31, 2023 Criteria or Specific Requirement: 2 CFR section 200.430(i)(1) requires charges to federal awards for salaries and wages be based on records that accurately reflect the work performed. Condition: We noted through procedures performed that allocated salaries and wages as well as related employee benefits and payroll taxes were based on an estimated percentage of time to be devoted to the grant-funded programs as opposed to actual hours worked, resulting in a potential over-allocation or under-allocation of expenditures. Cause: Internal controls over compliance put in place by management were not designed effectively to ensure a review of allocated versus actual hours work by the federal grant was performed and that proof of such reviews was documented and retained. Effect: The possibility exists that noncompliance with federal requirements related to allowable costs and allowable activities could go undetected as there is no review or true up process for actual hours worked related to the program. Questioned Costs: In a sample of 40 expenditures, total known question costs found totaled $46,571. Likely questioned costs exceed $25,000. Context: Of the sample of 40 individual costs charged to the grant, 12 were allocated salary costs and related employee benefits and payroll taxes of full-time, salaried employees. For these 12 payroll related items, allocated costs were based on the estimated percentage of time expected to be devoted by each employee to the grant-funded program. Unleashing Potential did not maintain documentation to support the actual time and effort of each employee charged to the grant. Identification as a Repeat Finding: 2022-001 Recommendation: For employees working on grant-funded programs, management should develop a time-keeping process to track and verify that the amount of time charged to the grant is accurate and based on the employee’s time spent working on the grant. Documented review and approval of this time allocation by the employee’s supervisor should be maintained. Views of Responsible Officials: Management will implement procedures to assure that all costs charged to the 21st Century program are reviewed by a competent individual, and those reviews will be documented.