FA 2023-001 Improve Controls over Financial Reporting
Compliance Requirement: Reporting
Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance
Federal Awarding Agency: U.S. Department of Education
Pass-Through Entity: Georgia Department of Education
AL Number and Title: 84.010 – Title I Grants to Local Educational Agencies
Federal Award Number: S010A210010-21A (Year: 2022), S010A220010 (Year: 2023)
Questioned Costs: None Identified
Description:
The School District did not file accurate completion reports for Title I Grants to Local Educational Agencies program.
Background Information:
The Georgia Department of Education (GaDOE) requires the School District to submit a completion report by October 30 after the 15-month period of performance associated with the Title I Grants to Local Educational Agencies (Title I) program ends. These completion reports are filed through the Grants Application section of the MyGaDOE webportal and reflect budgeted and actual expenditure information for the Title I program for the reporting period. If the total expenditures reflected on the completion report are more than the Title I program funds received by the School District for the grant period, a DE-0147 – Request for Reimbursement of Monthly Cash Disbursements will be automatically generated and the additional funds due to the School District will be disbursed appropriately. Conversely, if the total funds received for the grant period exceed the total expenditures reflected on the completion report, the Grants Application will prompt the School District to enter a check number for the required refund of excess funds drawn down. Therefore, it is imperative that completion reports are filed by the School District in an accurate and timely manner.
Criteria:
As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls.
Provisions included in the Uniform Guidance, Section 200.302(a) state in part that “the non-Federal entity’s financial management systems must… be sufficient to permit the preparation of reports required by general and program-specific terms and conditions.” In addition, provisions included in the Uniform Guidance, Section 200.302(b)(2) state in part that the non-federal entity’s financial management system must provide for “accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements.”
Condition:
A review of the School District’s accounting records and the completion reports related to the Title I program revealed the following deficiencies:
1. The Title I-A, Improving the Academic Achievement of the Disadvantaged completion report for the period July 1, 2022 through June 30, 2023 was under reported by $79,636.
2. The Title I-A, Improving the Academic Achievement of the Disadvantaged completion report for the period July 1, 2023 through September 30, 2023 was over reported by $390.
3. The Title I-A, School Improvement completion report for the period July 1, 2022 through
June 30, 2023 was under reported by $4,571.
4. The Title I-A, School Improvement completion report for the period July 1, 2023 through September 30, 2023 was under reported by $32.
Cause:
Due to high turnover within the School District finance department and lack of strong procedures and
controls, the School District had a deficiency in oversight of federal programs and reviews.
Effect:
The School District was not in compliance with the Uniform Guidance and GaDOE guidance. Failure to accurately report federal award expenditures through the completion report process could lead to the filing of DE-0147 reimbursement requests with GaDOE that do not support actual expenditures. Therefore, the School District may obtain more or less federal funding than they were eligible to receive.
Recommendation:
The School District should establish procedures to ensure that completion reports submitted to GaDOE are supported by the accounting records and reimbursement requests are prepared based upon actual expenditures incurred. In addition, management should develop and implement a monitoring process to ensure that control procedures are being followed.
Views of Responsible Officials:
We concur with this finding.
FA 2023-001 Improve Controls over Financial Reporting
Compliance Requirement: Reporting
Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance
Federal Awarding Agency: U.S. Department of Education
Pass-Through Entity: Georgia Department of Education
AL Number and Title: 84.010 – Title I Grants to Local Educational Agencies
Federal Award Number: S010A210010-21A (Year: 2022), S010A220010 (Year: 2023)
Questioned Costs: None Identified
Description:
The School District did not file accurate completion reports for Title I Grants to Local Educational Agencies program.
Background Information:
The Georgia Department of Education (GaDOE) requires the School District to submit a completion report by October 30 after the 15-month period of performance associated with the Title I Grants to Local Educational Agencies (Title I) program ends. These completion reports are filed through the Grants Application section of the MyGaDOE webportal and reflect budgeted and actual expenditure information for the Title I program for the reporting period. If the total expenditures reflected on the completion report are more than the Title I program funds received by the School District for the grant period, a DE-0147 – Request for Reimbursement of Monthly Cash Disbursements will be automatically generated and the additional funds due to the School District will be disbursed appropriately. Conversely, if the total funds received for the grant period exceed the total expenditures reflected on the completion report, the Grants Application will prompt the School District to enter a check number for the required refund of excess funds drawn down. Therefore, it is imperative that completion reports are filed by the School District in an accurate and timely manner.
Criteria:
As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls.
Provisions included in the Uniform Guidance, Section 200.302(a) state in part that “the non-Federal entity’s financial management systems must… be sufficient to permit the preparation of reports required by general and program-specific terms and conditions.” In addition, provisions included in the Uniform Guidance, Section 200.302(b)(2) state in part that the non-federal entity’s financial management system must provide for “accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements.”
Condition:
A review of the School District’s accounting records and the completion reports related to the Title I program revealed the following deficiencies:
1. The Title I-A, Improving the Academic Achievement of the Disadvantaged completion report for the period July 1, 2022 through June 30, 2023 was under reported by $79,636.
2. The Title I-A, Improving the Academic Achievement of the Disadvantaged completion report for the period July 1, 2023 through September 30, 2023 was over reported by $390.
3. The Title I-A, School Improvement completion report for the period July 1, 2022 through
June 30, 2023 was under reported by $4,571.
4. The Title I-A, School Improvement completion report for the period July 1, 2023 through September 30, 2023 was under reported by $32.
Cause:
Due to high turnover within the School District finance department and lack of strong procedures and
controls, the School District had a deficiency in oversight of federal programs and reviews.
Effect:
The School District was not in compliance with the Uniform Guidance and GaDOE guidance. Failure to accurately report federal award expenditures through the completion report process could lead to the filing of DE-0147 reimbursement requests with GaDOE that do not support actual expenditures. Therefore, the School District may obtain more or less federal funding than they were eligible to receive.
Recommendation:
The School District should establish procedures to ensure that completion reports submitted to GaDOE are supported by the accounting records and reimbursement requests are prepared based upon actual expenditures incurred. In addition, management should develop and implement a monitoring process to ensure that control procedures are being followed.
Views of Responsible Officials:
We concur with this finding.
FA 2023-002 Strengthen Budgetary Controls over Expenditures
Compliance Requirement: Activities Allowed or Unallowed
Allowable Costs/Cost Principles
Internal Control Impact: Significant Deficiency
Compliance Impact: Nonmaterial Noncompliance
Federal Awarding Agency: U.S. Department of Education
Pass-Through Entity: Georgia Department of Education
AL Number and Title: COVID-19 – 84.425U – American Rescue Plan Elementary
and Secondary School Emergency Relief Fund
Federal Award Number: S425U210012 (Year: 2021)
Questioned Costs: $7,360
Description:
A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund
program revealed instances in which expenditures had not been properly approved by the pass-through
entity.
Background:
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak.
Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation.
ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $1,743,621 were expended and reported on the Crawford County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2023.
Criteria:
As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards
in compliance with federal statutes, regulations, and the terms and conditions of the federal awards
pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance),
Section 200.303 – Internal Controls.
Additionally, provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting
Allowability of Costs state that “costs must meet the following general criteria in order to be allowable
under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and
be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in
these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with
policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…”
Furthermore, to assist school districts in improving their financial management systems and associated
compliance over federal programs, GaDOE published the Financial Management for Georgia Local
Units of Administration (FMGLUA) manual. The FMGLUA manual requires that LEAs submit a
budget as part of each federal program’s Consolidated Application process. The program budget
reflects details regarding the manner in which each school district intends to expend the program
funds. The Consolidated Application, including the budget, for each program must be reviewed and
approved by GaDOE personnel before the LEA is authorized to expend program funds. Amendments to
the budget are to be submitted to and approved by GaDOE when a school district intends to spend
funds in a manner not initially reported.
Lastly, LEA personnel must also provide program-specific assurances related to the ESSER program
within the Consolidated Application system. These assurances are reflected in the Uniform Guidance,
Section 200.415 – Required Certifications, and include provisions that require LEAs “to assure that
expenditures are proper and in accordance with the terms and conditions of the Federal award and
approved project budgets...”
Condition:
A sample of 25 nonpersonal services expenditures was randomly selected for testing using a non-statistical sampling approach. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. It was noted that prior approval was not obtained from GaDOE for one expenditure totaling $7,360 as this expenditure was not reflected in the approved budget or subsequent amendments within the Consolidated Application system, as required.
Questioned Costs:
Upon testing a sample of $262,816 in nonpersonal services expenditures, known questioned cost
of $7,360 was identified for the expenditure not properly approved through the Consolidated
Application process. Using the population being sampled, which totaled $1,133,086, we project the likely questioned costs to be approximately $31,731.
Cause:
Due to oversight, management was unaware that the expenditure was not approved on the GaDOE Consolidated Application.
Effect:
The School District is not in compliance with the Uniform Guidance or GaDOE guidance related to the
ESSER program. Failure to accurately develop and amend budget information through the
Consolidated Application process and verify compliance with applicable policies and regulations prior
to the expenditure of federal program funds may expose the School District to unnecessary financial
strains and shortages as GaDOE may require the School District to return funds associated with
unapproved and unallowable expenditures.
Recommendation:
The School District should revise current internal control procedures related to the ESSER program.
Where vulnerable, the School District should develop and/or modify its policies and procedures to
ensure that potential expenditures are approved through the Consolidated Application process and
deemed to be allowable before spending federal funds. In addition, management should develop and
implement a monitoring process to ensure that control procedures are being followed.
Views of Responsible Officials:
We concur with this finding.
FA 2023-003 Improve Controls over Cash Management
Compliance Requirement: Cash Management
Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance
Federal Awarding Agency: U.S. Department of Education
Pass-Through Entity: Georgia Department of Education
AL Number and Title: COVID-19 – 84.425U – American Rescue Plan Elementary
and Secondary School Emergency Relief Fund
Federal Award Number: S425U210012 (Year: 2021)
Questioned Costs: None Identified
Description:
The School District made cash drawdowns in excess of immediate cash needs for the Elementary and Secondary School Emergency Relief Fund program.
Background Information:
The School District may request Elementary and Secondary Emergency Relief (ESSER) Fund program funds from the Georgia Department of Education (GaDOE) once per month. GaDOE requires the School District to submit DE-0147 – Requests for Reimbursement of Monthly Cash Disbursements through the Grants Accounting Online Reporting System to receive program funds. When a DE-0147 request is submitted and approved, the funds are typically disbursed to the School District through an electronic payment process the next week. The School District submitted DE-0147 requests to receive a total of $3,636,320 in ESSER funds from GaDOE during the fiscal year under review.
Criteria:
As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls.
Provisions included in the Uniform Guidance Section 200.305(b) state that “For non-Federal entities other than states, payment methods must minimize the time elapsing between the transfer of funds…the pass-through entity and the disbursement by the non-Federal entity.” In addition, the Uniform Guidance Section 200.302(b)(6) requires the entity to develop written cash management procedures.
Condition:
A review of all cash drawdowns and disbursements related to the ESSER program was performed to determine if any excessive cash balances were maintained during the fiscal year under review. Cash balances in excess of program materiality were maintained for the ESSER program for 37 days. Additionally, it was noted that the School District did not have appropriate internal controls in place over the cash drawdown process.
Cause:
In discussing this issue with the School District, they indicated that the lack of review of federal grants
resulted in excess cash drawdown requests.
Effect:
The School District was not in compliance with the Uniform Guidance and GaDOE guidance. In addition, the School District could potentially accrue an interest liability that would be owed back to the federal government. Furthermore, when the School District cannot meet the requirement to minimize the time elapsing between the transfer of funds and disbursement of those funds, provisions included in the Uniform Guidance allow GaDOE to change the method by which the School District is transferred funds and delay the School District’s receipt of these funds. This may include a requirement by GaDOE to submit invoices prior to being reimbursed for program expenditures.
Recommendation:
The School District should establish procedures to accurately forecast the cash needs of the ESSER program and minimize the time elapsing between the transfer of funds from GaDOE and the disbursement of such funds by the School District. In addition, these procedures should be documented in writing in accordance with the Uniform Guidance Section 200.302(b)(6). Furthermore, management should develop and implement a monitoring process to ensure that these procedures are followed.
Views of Responsible Officials:
We concur with this finding.
FA 2023-001 Improve Controls over Financial Reporting
Compliance Requirement: Reporting
Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance
Federal Awarding Agency: U.S. Department of Education
Pass-Through Entity: Georgia Department of Education
AL Number and Title: 84.010 – Title I Grants to Local Educational Agencies
Federal Award Number: S010A210010-21A (Year: 2022), S010A220010 (Year: 2023)
Questioned Costs: None Identified
Description:
The School District did not file accurate completion reports for Title I Grants to Local Educational Agencies program.
Background Information:
The Georgia Department of Education (GaDOE) requires the School District to submit a completion report by October 30 after the 15-month period of performance associated with the Title I Grants to Local Educational Agencies (Title I) program ends. These completion reports are filed through the Grants Application section of the MyGaDOE webportal and reflect budgeted and actual expenditure information for the Title I program for the reporting period. If the total expenditures reflected on the completion report are more than the Title I program funds received by the School District for the grant period, a DE-0147 – Request for Reimbursement of Monthly Cash Disbursements will be automatically generated and the additional funds due to the School District will be disbursed appropriately. Conversely, if the total funds received for the grant period exceed the total expenditures reflected on the completion report, the Grants Application will prompt the School District to enter a check number for the required refund of excess funds drawn down. Therefore, it is imperative that completion reports are filed by the School District in an accurate and timely manner.
Criteria:
As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls.
Provisions included in the Uniform Guidance, Section 200.302(a) state in part that “the non-Federal entity’s financial management systems must… be sufficient to permit the preparation of reports required by general and program-specific terms and conditions.” In addition, provisions included in the Uniform Guidance, Section 200.302(b)(2) state in part that the non-federal entity’s financial management system must provide for “accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements.”
Condition:
A review of the School District’s accounting records and the completion reports related to the Title I program revealed the following deficiencies:
1. The Title I-A, Improving the Academic Achievement of the Disadvantaged completion report for the period July 1, 2022 through June 30, 2023 was under reported by $79,636.
2. The Title I-A, Improving the Academic Achievement of the Disadvantaged completion report for the period July 1, 2023 through September 30, 2023 was over reported by $390.
3. The Title I-A, School Improvement completion report for the period July 1, 2022 through
June 30, 2023 was under reported by $4,571.
4. The Title I-A, School Improvement completion report for the period July 1, 2023 through September 30, 2023 was under reported by $32.
Cause:
Due to high turnover within the School District finance department and lack of strong procedures and
controls, the School District had a deficiency in oversight of federal programs and reviews.
Effect:
The School District was not in compliance with the Uniform Guidance and GaDOE guidance. Failure to accurately report federal award expenditures through the completion report process could lead to the filing of DE-0147 reimbursement requests with GaDOE that do not support actual expenditures. Therefore, the School District may obtain more or less federal funding than they were eligible to receive.
Recommendation:
The School District should establish procedures to ensure that completion reports submitted to GaDOE are supported by the accounting records and reimbursement requests are prepared based upon actual expenditures incurred. In addition, management should develop and implement a monitoring process to ensure that control procedures are being followed.
Views of Responsible Officials:
We concur with this finding.
FA 2023-001 Improve Controls over Financial Reporting
Compliance Requirement: Reporting
Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance
Federal Awarding Agency: U.S. Department of Education
Pass-Through Entity: Georgia Department of Education
AL Number and Title: 84.010 – Title I Grants to Local Educational Agencies
Federal Award Number: S010A210010-21A (Year: 2022), S010A220010 (Year: 2023)
Questioned Costs: None Identified
Description:
The School District did not file accurate completion reports for Title I Grants to Local Educational Agencies program.
Background Information:
The Georgia Department of Education (GaDOE) requires the School District to submit a completion report by October 30 after the 15-month period of performance associated with the Title I Grants to Local Educational Agencies (Title I) program ends. These completion reports are filed through the Grants Application section of the MyGaDOE webportal and reflect budgeted and actual expenditure information for the Title I program for the reporting period. If the total expenditures reflected on the completion report are more than the Title I program funds received by the School District for the grant period, a DE-0147 – Request for Reimbursement of Monthly Cash Disbursements will be automatically generated and the additional funds due to the School District will be disbursed appropriately. Conversely, if the total funds received for the grant period exceed the total expenditures reflected on the completion report, the Grants Application will prompt the School District to enter a check number for the required refund of excess funds drawn down. Therefore, it is imperative that completion reports are filed by the School District in an accurate and timely manner.
Criteria:
As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls.
Provisions included in the Uniform Guidance, Section 200.302(a) state in part that “the non-Federal entity’s financial management systems must… be sufficient to permit the preparation of reports required by general and program-specific terms and conditions.” In addition, provisions included in the Uniform Guidance, Section 200.302(b)(2) state in part that the non-federal entity’s financial management system must provide for “accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements.”
Condition:
A review of the School District’s accounting records and the completion reports related to the Title I program revealed the following deficiencies:
1. The Title I-A, Improving the Academic Achievement of the Disadvantaged completion report for the period July 1, 2022 through June 30, 2023 was under reported by $79,636.
2. The Title I-A, Improving the Academic Achievement of the Disadvantaged completion report for the period July 1, 2023 through September 30, 2023 was over reported by $390.
3. The Title I-A, School Improvement completion report for the period July 1, 2022 through
June 30, 2023 was under reported by $4,571.
4. The Title I-A, School Improvement completion report for the period July 1, 2023 through September 30, 2023 was under reported by $32.
Cause:
Due to high turnover within the School District finance department and lack of strong procedures and
controls, the School District had a deficiency in oversight of federal programs and reviews.
Effect:
The School District was not in compliance with the Uniform Guidance and GaDOE guidance. Failure to accurately report federal award expenditures through the completion report process could lead to the filing of DE-0147 reimbursement requests with GaDOE that do not support actual expenditures. Therefore, the School District may obtain more or less federal funding than they were eligible to receive.
Recommendation:
The School District should establish procedures to ensure that completion reports submitted to GaDOE are supported by the accounting records and reimbursement requests are prepared based upon actual expenditures incurred. In addition, management should develop and implement a monitoring process to ensure that control procedures are being followed.
Views of Responsible Officials:
We concur with this finding.
FA 2023-002 Strengthen Budgetary Controls over Expenditures
Compliance Requirement: Activities Allowed or Unallowed
Allowable Costs/Cost Principles
Internal Control Impact: Significant Deficiency
Compliance Impact: Nonmaterial Noncompliance
Federal Awarding Agency: U.S. Department of Education
Pass-Through Entity: Georgia Department of Education
AL Number and Title: COVID-19 – 84.425U – American Rescue Plan Elementary
and Secondary School Emergency Relief Fund
Federal Award Number: S425U210012 (Year: 2021)
Questioned Costs: $7,360
Description:
A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund
program revealed instances in which expenditures had not been properly approved by the pass-through
entity.
Background:
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak.
Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation.
ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $1,743,621 were expended and reported on the Crawford County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2023.
Criteria:
As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards
in compliance with federal statutes, regulations, and the terms and conditions of the federal awards
pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance),
Section 200.303 – Internal Controls.
Additionally, provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting
Allowability of Costs state that “costs must meet the following general criteria in order to be allowable
under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and
be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in
these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with
policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…”
Furthermore, to assist school districts in improving their financial management systems and associated
compliance over federal programs, GaDOE published the Financial Management for Georgia Local
Units of Administration (FMGLUA) manual. The FMGLUA manual requires that LEAs submit a
budget as part of each federal program’s Consolidated Application process. The program budget
reflects details regarding the manner in which each school district intends to expend the program
funds. The Consolidated Application, including the budget, for each program must be reviewed and
approved by GaDOE personnel before the LEA is authorized to expend program funds. Amendments to
the budget are to be submitted to and approved by GaDOE when a school district intends to spend
funds in a manner not initially reported.
Lastly, LEA personnel must also provide program-specific assurances related to the ESSER program
within the Consolidated Application system. These assurances are reflected in the Uniform Guidance,
Section 200.415 – Required Certifications, and include provisions that require LEAs “to assure that
expenditures are proper and in accordance with the terms and conditions of the Federal award and
approved project budgets...”
Condition:
A sample of 25 nonpersonal services expenditures was randomly selected for testing using a non-statistical sampling approach. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. It was noted that prior approval was not obtained from GaDOE for one expenditure totaling $7,360 as this expenditure was not reflected in the approved budget or subsequent amendments within the Consolidated Application system, as required.
Questioned Costs:
Upon testing a sample of $262,816 in nonpersonal services expenditures, known questioned cost
of $7,360 was identified for the expenditure not properly approved through the Consolidated
Application process. Using the population being sampled, which totaled $1,133,086, we project the likely questioned costs to be approximately $31,731.
Cause:
Due to oversight, management was unaware that the expenditure was not approved on the GaDOE Consolidated Application.
Effect:
The School District is not in compliance with the Uniform Guidance or GaDOE guidance related to the
ESSER program. Failure to accurately develop and amend budget information through the
Consolidated Application process and verify compliance with applicable policies and regulations prior
to the expenditure of federal program funds may expose the School District to unnecessary financial
strains and shortages as GaDOE may require the School District to return funds associated with
unapproved and unallowable expenditures.
Recommendation:
The School District should revise current internal control procedures related to the ESSER program.
Where vulnerable, the School District should develop and/or modify its policies and procedures to
ensure that potential expenditures are approved through the Consolidated Application process and
deemed to be allowable before spending federal funds. In addition, management should develop and
implement a monitoring process to ensure that control procedures are being followed.
Views of Responsible Officials:
We concur with this finding.
FA 2023-003 Improve Controls over Cash Management
Compliance Requirement: Cash Management
Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance
Federal Awarding Agency: U.S. Department of Education
Pass-Through Entity: Georgia Department of Education
AL Number and Title: COVID-19 – 84.425U – American Rescue Plan Elementary
and Secondary School Emergency Relief Fund
Federal Award Number: S425U210012 (Year: 2021)
Questioned Costs: None Identified
Description:
The School District made cash drawdowns in excess of immediate cash needs for the Elementary and Secondary School Emergency Relief Fund program.
Background Information:
The School District may request Elementary and Secondary Emergency Relief (ESSER) Fund program funds from the Georgia Department of Education (GaDOE) once per month. GaDOE requires the School District to submit DE-0147 – Requests for Reimbursement of Monthly Cash Disbursements through the Grants Accounting Online Reporting System to receive program funds. When a DE-0147 request is submitted and approved, the funds are typically disbursed to the School District through an electronic payment process the next week. The School District submitted DE-0147 requests to receive a total of $3,636,320 in ESSER funds from GaDOE during the fiscal year under review.
Criteria:
As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls.
Provisions included in the Uniform Guidance Section 200.305(b) state that “For non-Federal entities other than states, payment methods must minimize the time elapsing between the transfer of funds…the pass-through entity and the disbursement by the non-Federal entity.” In addition, the Uniform Guidance Section 200.302(b)(6) requires the entity to develop written cash management procedures.
Condition:
A review of all cash drawdowns and disbursements related to the ESSER program was performed to determine if any excessive cash balances were maintained during the fiscal year under review. Cash balances in excess of program materiality were maintained for the ESSER program for 37 days. Additionally, it was noted that the School District did not have appropriate internal controls in place over the cash drawdown process.
Cause:
In discussing this issue with the School District, they indicated that the lack of review of federal grants
resulted in excess cash drawdown requests.
Effect:
The School District was not in compliance with the Uniform Guidance and GaDOE guidance. In addition, the School District could potentially accrue an interest liability that would be owed back to the federal government. Furthermore, when the School District cannot meet the requirement to minimize the time elapsing between the transfer of funds and disbursement of those funds, provisions included in the Uniform Guidance allow GaDOE to change the method by which the School District is transferred funds and delay the School District’s receipt of these funds. This may include a requirement by GaDOE to submit invoices prior to being reimbursed for program expenditures.
Recommendation:
The School District should establish procedures to accurately forecast the cash needs of the ESSER program and minimize the time elapsing between the transfer of funds from GaDOE and the disbursement of such funds by the School District. In addition, these procedures should be documented in writing in accordance with the Uniform Guidance Section 200.302(b)(6). Furthermore, management should develop and implement a monitoring process to ensure that these procedures are followed.
Views of Responsible Officials:
We concur with this finding.