Audit 336370

FINDING #2024-001: ALLOWABLE COSTS/COST PRINCIPLES – TIME AND EFFORT REPORTING (50000) Assistance Listing Number and Title: 84.07, 84.027A ‐ Special Education Cluster Federal Grantor Name: U.S. Department of Education; Passed through California Department of Education Criteria: Per Title 2, Code of Federal Regulations, Part 200, Subpart E, Section 200.430(i)(1)(vii), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. A semi-annual certification may be completed if 100% of an employee’s time if charged to one Federal award. Condition: The District did not have sufficient controls in place to ensure that employees who were charged to IDEA programs completed time accounting documentation in accordance with federal requirements. The District was not able to provide time accounting documentation for three (3) employees tested over the Fall 2023 period. Context: A significant amount of the federal expenditures related to these programs are derived from payroll costs. While the salaries appear to be reasonable and necessary for the program objectives, the District did not provide the required supporting documentation as outlined in the Title 2, Code of Federal Regulations, Part 200, Subpart E, Section 200.430 (i)(1)(vii). Further, there does not appear to be adequate policies and procedures necessary to support that the District has controls over compliance objectives. Cause: The condition identified appears to have materialized due to the District’s lack of established procedures to ensure compliance with the requirements under Title 2, Code of Federal Regulations, Part 200, Subpart E, Section 200.430 (i)(1)(vii). Effect: The District has not complied with the requirements identified in Title 2, Code of Federal Regulations, Part 200, Subpart E, Section 200.430 (i)(1)(vii). Questioned Costs: This finding represents a significant deficiency in internal control over federal compliance. However, there were no questioned costs associated with this finding as we did not identify any unallowable expenditures as a result of the finding. Repeat Finding: This is a repeat finding of Finding #2023-002. Recommendation: The District should review the requirements stated in Title 2, Code of Federal Regulations, Part 200, Subpart E, Section 200.430 (i)(1)(vii) and implement a procedure to address the control deficiency currently identified with the District’s time accounting documentation as it relates to employees working on single or multiple activities or cost objectives. Views of Responsible Officials: See Corrective Action Plan on following page.

FINDING #2024-001: ALLOWABLE COSTS/COST PRINCIPLES – TIME AND EFFORT REPORTING (50000) Assistance Listing Number and Title: 84.07, 84.027A ‐ Special Education Cluster Federal Grantor Name: U.S. Department of Education; Passed through California Department of Education Criteria: Per Title 2, Code of Federal Regulations, Part 200, Subpart E, Section 200.430(i)(1)(vii), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. A semi-annual certification may be completed if 100% of an employee’s time if charged to one Federal award. Condition: The District did not have sufficient controls in place to ensure that employees who were charged to IDEA programs completed time accounting documentation in accordance with federal requirements. The District was not able to provide time accounting documentation for three (3) employees tested over the Fall 2023 period. Context: A significant amount of the federal expenditures related to these programs are derived from payroll costs. While the salaries appear to be reasonable and necessary for the program objectives, the District did not provide the required supporting documentation as outlined in the Title 2, Code of Federal Regulations, Part 200, Subpart E, Section 200.430 (i)(1)(vii). Further, there does not appear to be adequate policies and procedures necessary to support that the District has controls over compliance objectives. Cause: The condition identified appears to have materialized due to the District’s lack of established procedures to ensure compliance with the requirements under Title 2, Code of Federal Regulations, Part 200, Subpart E, Section 200.430 (i)(1)(vii). Effect: The District has not complied with the requirements identified in Title 2, Code of Federal Regulations, Part 200, Subpart E, Section 200.430 (i)(1)(vii). Questioned Costs: This finding represents a significant deficiency in internal control over federal compliance. However, there were no questioned costs associated with this finding as we did not identify any unallowable expenditures as a result of the finding. Repeat Finding: This is a repeat finding of Finding #2023-002. Recommendation: The District should review the requirements stated in Title 2, Code of Federal Regulations, Part 200, Subpart E, Section 200.430 (i)(1)(vii) and implement a procedure to address the control deficiency currently identified with the District’s time accounting documentation as it relates to employees working on single or multiple activities or cost objectives. Views of Responsible Officials: See Corrective Action Plan on following page.