Audit 331883

Condition: The District did not amend grant budgets with the grantor agency prior to spending and did not take into account prior fiscal year spending before spending in the current fiscal year and filing reimbursement claims. The District did not consider prior year spending by budget category incurred and reported on the schedule of federal awards (SEFA) in fiscal years 2022 and 2023. As such they posted additional similarly eligible, but different categorical, expenses in fiscal 2024 to their general ledger. From a cumulative approach, audit adjustments of ($1,029) for ARP HCY I, ($344,956) for ESSERS III, and ($98,081) for Title I were required in fiscal 2024 to properly state the remaining expenditures of the multi-year grants on the fiscal 2024 SEFA. After the required adjustments, cumulatively, ARP HCY I overspent supplies by $6,820 and ESSERS III overspent purchased services by $400,947 and supplies by $169,517. A similar finding for overspending on budgets was noted in fiscal 2023. The District also did not take into consideration the prior year spending when submitting reimbursement claims in fiscal 2024 for ESSERS III and Title I so the claims submitted did not match the actual spending as incurred and reported by the District, in succession, over the multi-year period. ARP Homeless Children and Youth HCY I ALN #84.425W The closeout reimbursement request has not yet been filed by the District so the fiscal 2023 expenditures may still be claimed once they have amended the grant budget. Elementary and Secondary School Emergency Relief Fund III ALN #84.425U The closeout reimbursement request has been filed and since the claims for reimbursements did substantially agree for both grant total and by grant budget line, the grantor agency fully paid for the reimbursements submitted. Title I – Support for Improvement ALN #84.010A The closeout reimbursement request had been submitted, but is still pending. Criteria: The District is responsible for having a system of controls to ensure compliance with budget requirements of the grantor agency and for monitoring of expenditures against approved budgets and total grant amounts. The District is also responsible for monitoring that expenditures claimed for reimbursement for multi-year grants agree to the expenditures that were reported in the general ledgers as they were incurred over multiple fiscal years. Cause: The District did not have a control process to summarize grants expended over multiple fiscal years against original budgets. Grant budgets were not amended to represent prior spending reported, so they did not correctly represent the remainder of spending by budget line. As such, the District believed their spending was within allowed budgets. The District was also working with the grantor agency on both current year reporting and remaining reimbursement claims, but the focus was on total eligible expenses, not on fiscal year reporting. The ESSERS III reimbursement claims for grant totals have been fully paid by the granting agency. Effect: Federal expenditures for disallowed activities could occur if budgets are not approved in advance and spent accordingly. Federal expenditures may also be disallowed if they do not agree with the amounts reported in the fiscal year. Recommendation: The District should implement controls to prevent obligation or spending that would cause the categorical budget to be exceeded without first securing an approved budget amendment. The District should implement controls to monitor that only costs to be claimed on federal grants are being coded to those functions. Further, the District should implement controls to monitor that the costs claimed for reimbursement agree to the fiscal year that were reported on the financial statements.

Condition: The District did not amend grant budgets with the grantor agency prior to spending and did not take into account prior fiscal year spending before spending in the current fiscal year and filing reimbursement claims. The District did not consider prior year spending by budget category incurred and reported on the schedule of federal awards (SEFA) in fiscal years 2022 and 2023. As such they posted additional similarly eligible, but different categorical, expenses in fiscal 2024 to their general ledger. From a cumulative approach, audit adjustments of ($1,029) for ARP HCY I, ($344,956) for ESSERS III, and ($98,081) for Title I were required in fiscal 2024 to properly state the remaining expenditures of the multi-year grants on the fiscal 2024 SEFA. After the required adjustments, cumulatively, ARP HCY I overspent supplies by $6,820 and ESSERS III overspent purchased services by $400,947 and supplies by $169,517. A similar finding for overspending on budgets was noted in fiscal 2023. The District also did not take into consideration the prior year spending when submitting reimbursement claims in fiscal 2024 for ESSERS III and Title I so the claims submitted did not match the actual spending as incurred and reported by the District, in succession, over the multi-year period. ARP Homeless Children and Youth HCY I ALN #84.425W The closeout reimbursement request has not yet been filed by the District so the fiscal 2023 expenditures may still be claimed once they have amended the grant budget. Elementary and Secondary School Emergency Relief Fund III ALN #84.425U The closeout reimbursement request has been filed and since the claims for reimbursements did substantially agree for both grant total and by grant budget line, the grantor agency fully paid for the reimbursements submitted. Title I – Support for Improvement ALN #84.010A The closeout reimbursement request had been submitted, but is still pending. Criteria: The District is responsible for having a system of controls to ensure compliance with budget requirements of the grantor agency and for monitoring of expenditures against approved budgets and total grant amounts. The District is also responsible for monitoring that expenditures claimed for reimbursement for multi-year grants agree to the expenditures that were reported in the general ledgers as they were incurred over multiple fiscal years. Cause: The District did not have a control process to summarize grants expended over multiple fiscal years against original budgets. Grant budgets were not amended to represent prior spending reported, so they did not correctly represent the remainder of spending by budget line. As such, the District believed their spending was within allowed budgets. The District was also working with the grantor agency on both current year reporting and remaining reimbursement claims, but the focus was on total eligible expenses, not on fiscal year reporting. The ESSERS III reimbursement claims for grant totals have been fully paid by the granting agency. Effect: Federal expenditures for disallowed activities could occur if budgets are not approved in advance and spent accordingly. Federal expenditures may also be disallowed if they do not agree with the amounts reported in the fiscal year. Recommendation: The District should implement controls to prevent obligation or spending that would cause the categorical budget to be exceeded without first securing an approved budget amendment. The District should implement controls to monitor that only costs to be claimed on federal grants are being coded to those functions. Further, the District should implement controls to monitor that the costs claimed for reimbursement agree to the fiscal year that were reported on the financial statements.