FA 2024-001 Internal Controls over Wage Rate Requirements
Compliance Requirement: Special Tests and Provisions
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: 2022)
Questioned Costs: None Identified
Description:
A review of construction-related expenditures charged to the Elementary and Secondary School Emergency Relief Fund program revealed that the School District’s internal control procedures were not operating to ensure that Wage Rate Requirements were followed appropriately.
Background Information:
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 American Rescue Plan Elementary and Secondary School Emergency Relief 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 $4,308,075.07 were expended and reported on the Meriwether County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024.
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, the Uniform Guidance, Appendix II to Part 200 – Contract Provisions for Non-Federal Entity Contracts Under Federal Awards, Part D addresses Davis-Bacon Act requirements and states, in part, “When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor.”
Specifically, 29 CFR, Section 5.5 – Contract Provisions and Related Matters requires that these construction contracts contain certain clauses, including minimum wage rate requirements and the submission of certified payrolls. Provisions included in 29 CFR, Section 5.5(a)(3)(ii) state, in part, that “(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls… (B) Each payroll submitted shall be accompanied by a “Statement of Compliance,” signed by the contractor or subcontractor.”
Condition:
Our review of expenditures charged to the ESSER program revealed that the School District entered into construction contracts in excess of $2,000; however, appropriate provisions were not included in the contracts to ensure that Wage Rate Requirements were met by the contractors. In addition, while it was later noted that the appropriate wage rate was paid to all laborers, the School District did not ensure that the contractor submitted the required certified payrolls, which includes a copy of payroll disbursements and a statement of compliance with Wage Rate Requirements, at least weekly during the construction period.
Cause:
The School District did not appropriately communicate the wage rate requirements to ensure certified payrolls were obtained weekly for each week in which work was performed.
Effect:
The School District is not in compliance with the Uniform Guidance or ED guidance related to the ESSER program. Failure to ensure that appropriate provisions are included in contracts associated with construction financed in part or in whole with federal funds may expose the School District to unnecessary financial strains and shortages as ED or GaDOE may require the School District to return funds associated with these construction expenditures.
Recommendation:
The School District should develop policies and procedures to ensure that all construction contracts financed by federal financial assistance reflect appropriate provisions associated with Wage Rate Requirements and that certified payrolls are obtained from contractors as necessary. Furthermore, management should develop and implement a monitoring process to ensure that controls are operating appropriately.
Views of Responsible Officials:
We concur with this finding
FA 2024-002 Improve Internal Control Activities
Compliance Requirements: Activities Allowed or Unallowed
Allowable Costs/Cost Principles
Period of Performance
Procurement and Suspension and Debarment
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 Numbers and Titles: 84.027 – Special Education Grants to States
84.173 – Special Education Preschool Grants
COVID-19 – 84.027 – American Rescue Plan – Special Education Grants to States
COVID-19 – 84.173 – American Rescue Plan – Special Education Preschool Grants
Federal Award Numbers: H027A220073 (Year: 2023), H027A230073 (Year: 2024),
H173A220081 (Year: 2023), H173A230081 (Year: 2024), H027X210073 (Year: 2022), H173X210081 (Year: 2022)
Questioned Costs: None Identified
Description:
A review of expenditures recorded in and related to the Special Education Cluster revealed that the School District’s internal control procedures were not designed appropriately to ensure that appropriate reviews and approvals occurred.
Background Information:
The Special Education Cluster (SEC), which is comprised of the Special Education Grants to States (IDEA, Part B) and Special Education Preschool Grants (IDEA Preschool) programs, was authorized under the Individuals with Disabilities Education Act (IDEA). SEC funding is available to ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepares them for further education, employment, and independent living; ensure that the rights of children with disabilities and their parents are protected; assist states, localities, educational service agencies, and federal agencies to provide for the education of all children with disabilities; and assess and ensure the effectiveness of efforts to educate children with disabilities.
SEC 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 local educational agencies (LEAs) and overseeing the expenditure of funds by LEAs. SEC funds totaling $993,921.19 were expended and reported on the Meriwether County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024.
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.
Condition:
Internal controls over various compliance requirements associated with SEC were reviewed by the auditors. During our testing, it was determined the School District’s internal controls were not properly designed as it was discovered that the SEC Bookkeeper was using a stamp of the Program Director’s signature for approval of payment in the Director’s absence.
Cause:
The deficiency resulted from a lack of awareness that the existence of a stamp bearing the Director's signature could compromise separation of duties controls.
Effect:
The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to adequately review expenditures for allowability exposes the School District to unnecessary risk of error and misuse of federal funds.
Recommendation:
The School District should review current internal control procedures related to the SEC programs. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect appropriate evidence of review for associated compliance requirements. Furthermore, management should develop and implement a monitoring process to ensure that controls are operating appropriately.
Views of Responsible Officials:
We concur with this finding. Appropriate review and approval procedures have been consistently followed throughout the expenditure approval process. The use of a signature stamp did not compromise the Director’s thorough review and authorization of expenditures. Under the established process, the Bookkeeper initiates approval by sending a detailed email to the Director. The signature stamp was applied only after the Director responded with explicit approval. Additionally, a printed copy of the Director’s email approval was attached to the corresponding invoice, which the Accounts Payable Clerk verified prior to processing payment. This procedure has been in place and closely monitored to ensure compliance. A sample of this process was provided as evidence to the reviewing auditor during the review.
Auditor’s Concluding Remarks:
The use of a signature stamp constitutes a significant control weakness and raises concerns regarding the integrity and authenticity of transaction approvals. This practice does not provide an adequate audit trail related to the expenditure approval process and increases the risk of unauthorized approvals and fraudulent transactions. We reaffirm our finding and will review the status of the finding during our next audit.
FA 2024-002 Improve Internal Control Activities
Compliance Requirements: Activities Allowed or Unallowed
Allowable Costs/Cost Principles
Period of Performance
Procurement and Suspension and Debarment
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 Numbers and Titles: 84.027 – Special Education Grants to States
84.173 – Special Education Preschool Grants
COVID-19 – 84.027 – American Rescue Plan – Special Education Grants to States
COVID-19 – 84.173 – American Rescue Plan – Special Education Preschool Grants
Federal Award Numbers: H027A220073 (Year: 2023), H027A230073 (Year: 2024),
H173A220081 (Year: 2023), H173A230081 (Year: 2024), H027X210073 (Year: 2022), H173X210081 (Year: 2022)
Questioned Costs: None Identified
Description:
A review of expenditures recorded in and related to the Special Education Cluster revealed that the School District’s internal control procedures were not designed appropriately to ensure that appropriate reviews and approvals occurred.
Background Information:
The Special Education Cluster (SEC), which is comprised of the Special Education Grants to States (IDEA, Part B) and Special Education Preschool Grants (IDEA Preschool) programs, was authorized under the Individuals with Disabilities Education Act (IDEA). SEC funding is available to ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepares them for further education, employment, and independent living; ensure that the rights of children with disabilities and their parents are protected; assist states, localities, educational service agencies, and federal agencies to provide for the education of all children with disabilities; and assess and ensure the effectiveness of efforts to educate children with disabilities.
SEC 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 local educational agencies (LEAs) and overseeing the expenditure of funds by LEAs. SEC funds totaling $993,921.19 were expended and reported on the Meriwether County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024.
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.
Condition:
Internal controls over various compliance requirements associated with SEC were reviewed by the auditors. During our testing, it was determined the School District’s internal controls were not properly designed as it was discovered that the SEC Bookkeeper was using a stamp of the Program Director’s signature for approval of payment in the Director’s absence.
Cause:
The deficiency resulted from a lack of awareness that the existence of a stamp bearing the Director's signature could compromise separation of duties controls.
Effect:
The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to adequately review expenditures for allowability exposes the School District to unnecessary risk of error and misuse of federal funds.
Recommendation:
The School District should review current internal control procedures related to the SEC programs. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect appropriate evidence of review for associated compliance requirements. Furthermore, management should develop and implement a monitoring process to ensure that controls are operating appropriately.
Views of Responsible Officials:
We concur with this finding. Appropriate review and approval procedures have been consistently followed throughout the expenditure approval process. The use of a signature stamp did not compromise the Director’s thorough review and authorization of expenditures. Under the established process, the Bookkeeper initiates approval by sending a detailed email to the Director. The signature stamp was applied only after the Director responded with explicit approval. Additionally, a printed copy of the Director’s email approval was attached to the corresponding invoice, which the Accounts Payable Clerk verified prior to processing payment. This procedure has been in place and closely monitored to ensure compliance. A sample of this process was provided as evidence to the reviewing auditor during the review.
Auditor’s Concluding Remarks:
The use of a signature stamp constitutes a significant control weakness and raises concerns regarding the integrity and authenticity of transaction approvals. This practice does not provide an adequate audit trail related to the expenditure approval process and increases the risk of unauthorized approvals and fraudulent transactions. We reaffirm our finding and will review the status of the finding during our next audit.
FA 2024-002 Improve Internal Control Activities
Compliance Requirements: Activities Allowed or Unallowed
Allowable Costs/Cost Principles
Period of Performance
Procurement and Suspension and Debarment
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 Numbers and Titles: 84.027 – Special Education Grants to States
84.173 – Special Education Preschool Grants
COVID-19 – 84.027 – American Rescue Plan – Special Education Grants to States
COVID-19 – 84.173 – American Rescue Plan – Special Education Preschool Grants
Federal Award Numbers: H027A220073 (Year: 2023), H027A230073 (Year: 2024),
H173A220081 (Year: 2023), H173A230081 (Year: 2024), H027X210073 (Year: 2022), H173X210081 (Year: 2022)
Questioned Costs: None Identified
Description:
A review of expenditures recorded in and related to the Special Education Cluster revealed that the School District’s internal control procedures were not designed appropriately to ensure that appropriate reviews and approvals occurred.
Background Information:
The Special Education Cluster (SEC), which is comprised of the Special Education Grants to States (IDEA, Part B) and Special Education Preschool Grants (IDEA Preschool) programs, was authorized under the Individuals with Disabilities Education Act (IDEA). SEC funding is available to ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepares them for further education, employment, and independent living; ensure that the rights of children with disabilities and their parents are protected; assist states, localities, educational service agencies, and federal agencies to provide for the education of all children with disabilities; and assess and ensure the effectiveness of efforts to educate children with disabilities.
SEC 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 local educational agencies (LEAs) and overseeing the expenditure of funds by LEAs. SEC funds totaling $993,921.19 were expended and reported on the Meriwether County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024.
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.
Condition:
Internal controls over various compliance requirements associated with SEC were reviewed by the auditors. During our testing, it was determined the School District’s internal controls were not properly designed as it was discovered that the SEC Bookkeeper was using a stamp of the Program Director’s signature for approval of payment in the Director’s absence.
Cause:
The deficiency resulted from a lack of awareness that the existence of a stamp bearing the Director's signature could compromise separation of duties controls.
Effect:
The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to adequately review expenditures for allowability exposes the School District to unnecessary risk of error and misuse of federal funds.
Recommendation:
The School District should review current internal control procedures related to the SEC programs. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect appropriate evidence of review for associated compliance requirements. Furthermore, management should develop and implement a monitoring process to ensure that controls are operating appropriately.
Views of Responsible Officials:
We concur with this finding. Appropriate review and approval procedures have been consistently followed throughout the expenditure approval process. The use of a signature stamp did not compromise the Director’s thorough review and authorization of expenditures. Under the established process, the Bookkeeper initiates approval by sending a detailed email to the Director. The signature stamp was applied only after the Director responded with explicit approval. Additionally, a printed copy of the Director’s email approval was attached to the corresponding invoice, which the Accounts Payable Clerk verified prior to processing payment. This procedure has been in place and closely monitored to ensure compliance. A sample of this process was provided as evidence to the reviewing auditor during the review.
Auditor’s Concluding Remarks:
The use of a signature stamp constitutes a significant control weakness and raises concerns regarding the integrity and authenticity of transaction approvals. This practice does not provide an adequate audit trail related to the expenditure approval process and increases the risk of unauthorized approvals and fraudulent transactions. We reaffirm our finding and will review the status of the finding during our next audit.
FA 2024-002 Improve Internal Control Activities
Compliance Requirements: Activities Allowed or Unallowed
Allowable Costs/Cost Principles
Period of Performance
Procurement and Suspension and Debarment
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 Numbers and Titles: 84.027 – Special Education Grants to States
84.173 – Special Education Preschool Grants
COVID-19 – 84.027 – American Rescue Plan – Special Education Grants to States
COVID-19 – 84.173 – American Rescue Plan – Special Education Preschool Grants
Federal Award Numbers: H027A220073 (Year: 2023), H027A230073 (Year: 2024),
H173A220081 (Year: 2023), H173A230081 (Year: 2024), H027X210073 (Year: 2022), H173X210081 (Year: 2022)
Questioned Costs: None Identified
Description:
A review of expenditures recorded in and related to the Special Education Cluster revealed that the School District’s internal control procedures were not designed appropriately to ensure that appropriate reviews and approvals occurred.
Background Information:
The Special Education Cluster (SEC), which is comprised of the Special Education Grants to States (IDEA, Part B) and Special Education Preschool Grants (IDEA Preschool) programs, was authorized under the Individuals with Disabilities Education Act (IDEA). SEC funding is available to ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepares them for further education, employment, and independent living; ensure that the rights of children with disabilities and their parents are protected; assist states, localities, educational service agencies, and federal agencies to provide for the education of all children with disabilities; and assess and ensure the effectiveness of efforts to educate children with disabilities.
SEC 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 local educational agencies (LEAs) and overseeing the expenditure of funds by LEAs. SEC funds totaling $993,921.19 were expended and reported on the Meriwether County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024.
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.
Condition:
Internal controls over various compliance requirements associated with SEC were reviewed by the auditors. During our testing, it was determined the School District’s internal controls were not properly designed as it was discovered that the SEC Bookkeeper was using a stamp of the Program Director’s signature for approval of payment in the Director’s absence.
Cause:
The deficiency resulted from a lack of awareness that the existence of a stamp bearing the Director's signature could compromise separation of duties controls.
Effect:
The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to adequately review expenditures for allowability exposes the School District to unnecessary risk of error and misuse of federal funds.
Recommendation:
The School District should review current internal control procedures related to the SEC programs. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect appropriate evidence of review for associated compliance requirements. Furthermore, management should develop and implement a monitoring process to ensure that controls are operating appropriately.
Views of Responsible Officials:
We concur with this finding. Appropriate review and approval procedures have been consistently followed throughout the expenditure approval process. The use of a signature stamp did not compromise the Director’s thorough review and authorization of expenditures. Under the established process, the Bookkeeper initiates approval by sending a detailed email to the Director. The signature stamp was applied only after the Director responded with explicit approval. Additionally, a printed copy of the Director’s email approval was attached to the corresponding invoice, which the Accounts Payable Clerk verified prior to processing payment. This procedure has been in place and closely monitored to ensure compliance. A sample of this process was provided as evidence to the reviewing auditor during the review.
Auditor’s Concluding Remarks:
The use of a signature stamp constitutes a significant control weakness and raises concerns regarding the integrity and authenticity of transaction approvals. This practice does not provide an adequate audit trail related to the expenditure approval process and increases the risk of unauthorized approvals and fraudulent transactions. We reaffirm our finding and will review the status of the finding during our next audit.
FA 2024-002 Improve Internal Control Activities
Compliance Requirements: Activities Allowed or Unallowed
Allowable Costs/Cost Principles
Period of Performance
Procurement and Suspension and Debarment
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 Numbers and Titles: 84.027 – Special Education Grants to States
84.173 – Special Education Preschool Grants
COVID-19 – 84.027 – American Rescue Plan – Special Education Grants to States
COVID-19 – 84.173 – American Rescue Plan – Special Education Preschool Grants
Federal Award Numbers: H027A220073 (Year: 2023), H027A230073 (Year: 2024),
H173A220081 (Year: 2023), H173A230081 (Year: 2024), H027X210073 (Year: 2022), H173X210081 (Year: 2022)
Questioned Costs: None Identified
Description:
A review of expenditures recorded in and related to the Special Education Cluster revealed that the School District’s internal control procedures were not designed appropriately to ensure that appropriate reviews and approvals occurred.
Background Information:
The Special Education Cluster (SEC), which is comprised of the Special Education Grants to States (IDEA, Part B) and Special Education Preschool Grants (IDEA Preschool) programs, was authorized under the Individuals with Disabilities Education Act (IDEA). SEC funding is available to ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepares them for further education, employment, and independent living; ensure that the rights of children with disabilities and their parents are protected; assist states, localities, educational service agencies, and federal agencies to provide for the education of all children with disabilities; and assess and ensure the effectiveness of efforts to educate children with disabilities.
SEC 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 local educational agencies (LEAs) and overseeing the expenditure of funds by LEAs. SEC funds totaling $993,921.19 were expended and reported on the Meriwether County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024.
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.
Condition:
Internal controls over various compliance requirements associated with SEC were reviewed by the auditors. During our testing, it was determined the School District’s internal controls were not properly designed as it was discovered that the SEC Bookkeeper was using a stamp of the Program Director’s signature for approval of payment in the Director’s absence.
Cause:
The deficiency resulted from a lack of awareness that the existence of a stamp bearing the Director's signature could compromise separation of duties controls.
Effect:
The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to adequately review expenditures for allowability exposes the School District to unnecessary risk of error and misuse of federal funds.
Recommendation:
The School District should review current internal control procedures related to the SEC programs. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect appropriate evidence of review for associated compliance requirements. Furthermore, management should develop and implement a monitoring process to ensure that controls are operating appropriately.
Views of Responsible Officials:
We concur with this finding. Appropriate review and approval procedures have been consistently followed throughout the expenditure approval process. The use of a signature stamp did not compromise the Director’s thorough review and authorization of expenditures. Under the established process, the Bookkeeper initiates approval by sending a detailed email to the Director. The signature stamp was applied only after the Director responded with explicit approval. Additionally, a printed copy of the Director’s email approval was attached to the corresponding invoice, which the Accounts Payable Clerk verified prior to processing payment. This procedure has been in place and closely monitored to ensure compliance. A sample of this process was provided as evidence to the reviewing auditor during the review.
Auditor’s Concluding Remarks:
The use of a signature stamp constitutes a significant control weakness and raises concerns regarding the integrity and authenticity of transaction approvals. This practice does not provide an adequate audit trail related to the expenditure approval process and increases the risk of unauthorized approvals and fraudulent transactions. We reaffirm our finding and will review the status of the finding during our next audit.
FA 2024-002 Improve Internal Control Activities
Compliance Requirements: Activities Allowed or Unallowed
Allowable Costs/Cost Principles
Period of Performance
Procurement and Suspension and Debarment
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 Numbers and Titles: 84.027 – Special Education Grants to States
84.173 – Special Education Preschool Grants
COVID-19 – 84.027 – American Rescue Plan – Special Education Grants to States
COVID-19 – 84.173 – American Rescue Plan – Special Education Preschool Grants
Federal Award Numbers: H027A220073 (Year: 2023), H027A230073 (Year: 2024),
H173A220081 (Year: 2023), H173A230081 (Year: 2024), H027X210073 (Year: 2022), H173X210081 (Year: 2022)
Questioned Costs: None Identified
Description:
A review of expenditures recorded in and related to the Special Education Cluster revealed that the School District’s internal control procedures were not designed appropriately to ensure that appropriate reviews and approvals occurred.
Background Information:
The Special Education Cluster (SEC), which is comprised of the Special Education Grants to States (IDEA, Part B) and Special Education Preschool Grants (IDEA Preschool) programs, was authorized under the Individuals with Disabilities Education Act (IDEA). SEC funding is available to ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepares them for further education, employment, and independent living; ensure that the rights of children with disabilities and their parents are protected; assist states, localities, educational service agencies, and federal agencies to provide for the education of all children with disabilities; and assess and ensure the effectiveness of efforts to educate children with disabilities.
SEC 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 local educational agencies (LEAs) and overseeing the expenditure of funds by LEAs. SEC funds totaling $993,921.19 were expended and reported on the Meriwether County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024.
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.
Condition:
Internal controls over various compliance requirements associated with SEC were reviewed by the auditors. During our testing, it was determined the School District’s internal controls were not properly designed as it was discovered that the SEC Bookkeeper was using a stamp of the Program Director’s signature for approval of payment in the Director’s absence.
Cause:
The deficiency resulted from a lack of awareness that the existence of a stamp bearing the Director's signature could compromise separation of duties controls.
Effect:
The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to adequately review expenditures for allowability exposes the School District to unnecessary risk of error and misuse of federal funds.
Recommendation:
The School District should review current internal control procedures related to the SEC programs. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect appropriate evidence of review for associated compliance requirements. Furthermore, management should develop and implement a monitoring process to ensure that controls are operating appropriately.
Views of Responsible Officials:
We concur with this finding. Appropriate review and approval procedures have been consistently followed throughout the expenditure approval process. The use of a signature stamp did not compromise the Director’s thorough review and authorization of expenditures. Under the established process, the Bookkeeper initiates approval by sending a detailed email to the Director. The signature stamp was applied only after the Director responded with explicit approval. Additionally, a printed copy of the Director’s email approval was attached to the corresponding invoice, which the Accounts Payable Clerk verified prior to processing payment. This procedure has been in place and closely monitored to ensure compliance. A sample of this process was provided as evidence to the reviewing auditor during the review.
Auditor’s Concluding Remarks:
The use of a signature stamp constitutes a significant control weakness and raises concerns regarding the integrity and authenticity of transaction approvals. This practice does not provide an adequate audit trail related to the expenditure approval process and increases the risk of unauthorized approvals and fraudulent transactions. We reaffirm our finding and will review the status of the finding during our next audit.
FA 2024-001 Internal Controls over Wage Rate Requirements
Compliance Requirement: Special Tests and Provisions
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: 2022)
Questioned Costs: None Identified
Description:
A review of construction-related expenditures charged to the Elementary and Secondary School Emergency Relief Fund program revealed that the School District’s internal control procedures were not operating to ensure that Wage Rate Requirements were followed appropriately.
Background Information:
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 American Rescue Plan Elementary and Secondary School Emergency Relief 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 $4,308,075.07 were expended and reported on the Meriwether County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024.
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, the Uniform Guidance, Appendix II to Part 200 – Contract Provisions for Non-Federal Entity Contracts Under Federal Awards, Part D addresses Davis-Bacon Act requirements and states, in part, “When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor.”
Specifically, 29 CFR, Section 5.5 – Contract Provisions and Related Matters requires that these construction contracts contain certain clauses, including minimum wage rate requirements and the submission of certified payrolls. Provisions included in 29 CFR, Section 5.5(a)(3)(ii) state, in part, that “(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls… (B) Each payroll submitted shall be accompanied by a “Statement of Compliance,” signed by the contractor or subcontractor.”
Condition:
Our review of expenditures charged to the ESSER program revealed that the School District entered into construction contracts in excess of $2,000; however, appropriate provisions were not included in the contracts to ensure that Wage Rate Requirements were met by the contractors. In addition, while it was later noted that the appropriate wage rate was paid to all laborers, the School District did not ensure that the contractor submitted the required certified payrolls, which includes a copy of payroll disbursements and a statement of compliance with Wage Rate Requirements, at least weekly during the construction period.
Cause:
The School District did not appropriately communicate the wage rate requirements to ensure certified payrolls were obtained weekly for each week in which work was performed.
Effect:
The School District is not in compliance with the Uniform Guidance or ED guidance related to the ESSER program. Failure to ensure that appropriate provisions are included in contracts associated with construction financed in part or in whole with federal funds may expose the School District to unnecessary financial strains and shortages as ED or GaDOE may require the School District to return funds associated with these construction expenditures.
Recommendation:
The School District should develop policies and procedures to ensure that all construction contracts financed by federal financial assistance reflect appropriate provisions associated with Wage Rate Requirements and that certified payrolls are obtained from contractors as necessary. Furthermore, management should develop and implement a monitoring process to ensure that controls are operating appropriately.
Views of Responsible Officials:
We concur with this finding
FA 2024-002 Improve Internal Control Activities
Compliance Requirements: Activities Allowed or Unallowed
Allowable Costs/Cost Principles
Period of Performance
Procurement and Suspension and Debarment
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 Numbers and Titles: 84.027 – Special Education Grants to States
84.173 – Special Education Preschool Grants
COVID-19 – 84.027 – American Rescue Plan – Special Education Grants to States
COVID-19 – 84.173 – American Rescue Plan – Special Education Preschool Grants
Federal Award Numbers: H027A220073 (Year: 2023), H027A230073 (Year: 2024),
H173A220081 (Year: 2023), H173A230081 (Year: 2024), H027X210073 (Year: 2022), H173X210081 (Year: 2022)
Questioned Costs: None Identified
Description:
A review of expenditures recorded in and related to the Special Education Cluster revealed that the School District’s internal control procedures were not designed appropriately to ensure that appropriate reviews and approvals occurred.
Background Information:
The Special Education Cluster (SEC), which is comprised of the Special Education Grants to States (IDEA, Part B) and Special Education Preschool Grants (IDEA Preschool) programs, was authorized under the Individuals with Disabilities Education Act (IDEA). SEC funding is available to ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepares them for further education, employment, and independent living; ensure that the rights of children with disabilities and their parents are protected; assist states, localities, educational service agencies, and federal agencies to provide for the education of all children with disabilities; and assess and ensure the effectiveness of efforts to educate children with disabilities.
SEC 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 local educational agencies (LEAs) and overseeing the expenditure of funds by LEAs. SEC funds totaling $993,921.19 were expended and reported on the Meriwether County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024.
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.
Condition:
Internal controls over various compliance requirements associated with SEC were reviewed by the auditors. During our testing, it was determined the School District’s internal controls were not properly designed as it was discovered that the SEC Bookkeeper was using a stamp of the Program Director’s signature for approval of payment in the Director’s absence.
Cause:
The deficiency resulted from a lack of awareness that the existence of a stamp bearing the Director's signature could compromise separation of duties controls.
Effect:
The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to adequately review expenditures for allowability exposes the School District to unnecessary risk of error and misuse of federal funds.
Recommendation:
The School District should review current internal control procedures related to the SEC programs. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect appropriate evidence of review for associated compliance requirements. Furthermore, management should develop and implement a monitoring process to ensure that controls are operating appropriately.
Views of Responsible Officials:
We concur with this finding. Appropriate review and approval procedures have been consistently followed throughout the expenditure approval process. The use of a signature stamp did not compromise the Director’s thorough review and authorization of expenditures. Under the established process, the Bookkeeper initiates approval by sending a detailed email to the Director. The signature stamp was applied only after the Director responded with explicit approval. Additionally, a printed copy of the Director’s email approval was attached to the corresponding invoice, which the Accounts Payable Clerk verified prior to processing payment. This procedure has been in place and closely monitored to ensure compliance. A sample of this process was provided as evidence to the reviewing auditor during the review.
Auditor’s Concluding Remarks:
The use of a signature stamp constitutes a significant control weakness and raises concerns regarding the integrity and authenticity of transaction approvals. This practice does not provide an adequate audit trail related to the expenditure approval process and increases the risk of unauthorized approvals and fraudulent transactions. We reaffirm our finding and will review the status of the finding during our next audit.
FA 2024-002 Improve Internal Control Activities
Compliance Requirements: Activities Allowed or Unallowed
Allowable Costs/Cost Principles
Period of Performance
Procurement and Suspension and Debarment
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 Numbers and Titles: 84.027 – Special Education Grants to States
84.173 – Special Education Preschool Grants
COVID-19 – 84.027 – American Rescue Plan – Special Education Grants to States
COVID-19 – 84.173 – American Rescue Plan – Special Education Preschool Grants
Federal Award Numbers: H027A220073 (Year: 2023), H027A230073 (Year: 2024),
H173A220081 (Year: 2023), H173A230081 (Year: 2024), H027X210073 (Year: 2022), H173X210081 (Year: 2022)
Questioned Costs: None Identified
Description:
A review of expenditures recorded in and related to the Special Education Cluster revealed that the School District’s internal control procedures were not designed appropriately to ensure that appropriate reviews and approvals occurred.
Background Information:
The Special Education Cluster (SEC), which is comprised of the Special Education Grants to States (IDEA, Part B) and Special Education Preschool Grants (IDEA Preschool) programs, was authorized under the Individuals with Disabilities Education Act (IDEA). SEC funding is available to ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepares them for further education, employment, and independent living; ensure that the rights of children with disabilities and their parents are protected; assist states, localities, educational service agencies, and federal agencies to provide for the education of all children with disabilities; and assess and ensure the effectiveness of efforts to educate children with disabilities.
SEC 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 local educational agencies (LEAs) and overseeing the expenditure of funds by LEAs. SEC funds totaling $993,921.19 were expended and reported on the Meriwether County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024.
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.
Condition:
Internal controls over various compliance requirements associated with SEC were reviewed by the auditors. During our testing, it was determined the School District’s internal controls were not properly designed as it was discovered that the SEC Bookkeeper was using a stamp of the Program Director’s signature for approval of payment in the Director’s absence.
Cause:
The deficiency resulted from a lack of awareness that the existence of a stamp bearing the Director's signature could compromise separation of duties controls.
Effect:
The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to adequately review expenditures for allowability exposes the School District to unnecessary risk of error and misuse of federal funds.
Recommendation:
The School District should review current internal control procedures related to the SEC programs. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect appropriate evidence of review for associated compliance requirements. Furthermore, management should develop and implement a monitoring process to ensure that controls are operating appropriately.
Views of Responsible Officials:
We concur with this finding. Appropriate review and approval procedures have been consistently followed throughout the expenditure approval process. The use of a signature stamp did not compromise the Director’s thorough review and authorization of expenditures. Under the established process, the Bookkeeper initiates approval by sending a detailed email to the Director. The signature stamp was applied only after the Director responded with explicit approval. Additionally, a printed copy of the Director’s email approval was attached to the corresponding invoice, which the Accounts Payable Clerk verified prior to processing payment. This procedure has been in place and closely monitored to ensure compliance. A sample of this process was provided as evidence to the reviewing auditor during the review.
Auditor’s Concluding Remarks:
The use of a signature stamp constitutes a significant control weakness and raises concerns regarding the integrity and authenticity of transaction approvals. This practice does not provide an adequate audit trail related to the expenditure approval process and increases the risk of unauthorized approvals and fraudulent transactions. We reaffirm our finding and will review the status of the finding during our next audit.
FA 2024-002 Improve Internal Control Activities
Compliance Requirements: Activities Allowed or Unallowed
Allowable Costs/Cost Principles
Period of Performance
Procurement and Suspension and Debarment
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 Numbers and Titles: 84.027 – Special Education Grants to States
84.173 – Special Education Preschool Grants
COVID-19 – 84.027 – American Rescue Plan – Special Education Grants to States
COVID-19 – 84.173 – American Rescue Plan – Special Education Preschool Grants
Federal Award Numbers: H027A220073 (Year: 2023), H027A230073 (Year: 2024),
H173A220081 (Year: 2023), H173A230081 (Year: 2024), H027X210073 (Year: 2022), H173X210081 (Year: 2022)
Questioned Costs: None Identified
Description:
A review of expenditures recorded in and related to the Special Education Cluster revealed that the School District’s internal control procedures were not designed appropriately to ensure that appropriate reviews and approvals occurred.
Background Information:
The Special Education Cluster (SEC), which is comprised of the Special Education Grants to States (IDEA, Part B) and Special Education Preschool Grants (IDEA Preschool) programs, was authorized under the Individuals with Disabilities Education Act (IDEA). SEC funding is available to ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepares them for further education, employment, and independent living; ensure that the rights of children with disabilities and their parents are protected; assist states, localities, educational service agencies, and federal agencies to provide for the education of all children with disabilities; and assess and ensure the effectiveness of efforts to educate children with disabilities.
SEC 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 local educational agencies (LEAs) and overseeing the expenditure of funds by LEAs. SEC funds totaling $993,921.19 were expended and reported on the Meriwether County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024.
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.
Condition:
Internal controls over various compliance requirements associated with SEC were reviewed by the auditors. During our testing, it was determined the School District’s internal controls were not properly designed as it was discovered that the SEC Bookkeeper was using a stamp of the Program Director’s signature for approval of payment in the Director’s absence.
Cause:
The deficiency resulted from a lack of awareness that the existence of a stamp bearing the Director's signature could compromise separation of duties controls.
Effect:
The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to adequately review expenditures for allowability exposes the School District to unnecessary risk of error and misuse of federal funds.
Recommendation:
The School District should review current internal control procedures related to the SEC programs. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect appropriate evidence of review for associated compliance requirements. Furthermore, management should develop and implement a monitoring process to ensure that controls are operating appropriately.
Views of Responsible Officials:
We concur with this finding. Appropriate review and approval procedures have been consistently followed throughout the expenditure approval process. The use of a signature stamp did not compromise the Director’s thorough review and authorization of expenditures. Under the established process, the Bookkeeper initiates approval by sending a detailed email to the Director. The signature stamp was applied only after the Director responded with explicit approval. Additionally, a printed copy of the Director’s email approval was attached to the corresponding invoice, which the Accounts Payable Clerk verified prior to processing payment. This procedure has been in place and closely monitored to ensure compliance. A sample of this process was provided as evidence to the reviewing auditor during the review.
Auditor’s Concluding Remarks:
The use of a signature stamp constitutes a significant control weakness and raises concerns regarding the integrity and authenticity of transaction approvals. This practice does not provide an adequate audit trail related to the expenditure approval process and increases the risk of unauthorized approvals and fraudulent transactions. We reaffirm our finding and will review the status of the finding during our next audit.
FA 2024-002 Improve Internal Control Activities
Compliance Requirements: Activities Allowed or Unallowed
Allowable Costs/Cost Principles
Period of Performance
Procurement and Suspension and Debarment
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 Numbers and Titles: 84.027 – Special Education Grants to States
84.173 – Special Education Preschool Grants
COVID-19 – 84.027 – American Rescue Plan – Special Education Grants to States
COVID-19 – 84.173 – American Rescue Plan – Special Education Preschool Grants
Federal Award Numbers: H027A220073 (Year: 2023), H027A230073 (Year: 2024),
H173A220081 (Year: 2023), H173A230081 (Year: 2024), H027X210073 (Year: 2022), H173X210081 (Year: 2022)
Questioned Costs: None Identified
Description:
A review of expenditures recorded in and related to the Special Education Cluster revealed that the School District’s internal control procedures were not designed appropriately to ensure that appropriate reviews and approvals occurred.
Background Information:
The Special Education Cluster (SEC), which is comprised of the Special Education Grants to States (IDEA, Part B) and Special Education Preschool Grants (IDEA Preschool) programs, was authorized under the Individuals with Disabilities Education Act (IDEA). SEC funding is available to ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepares them for further education, employment, and independent living; ensure that the rights of children with disabilities and their parents are protected; assist states, localities, educational service agencies, and federal agencies to provide for the education of all children with disabilities; and assess and ensure the effectiveness of efforts to educate children with disabilities.
SEC 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 local educational agencies (LEAs) and overseeing the expenditure of funds by LEAs. SEC funds totaling $993,921.19 were expended and reported on the Meriwether County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024.
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.
Condition:
Internal controls over various compliance requirements associated with SEC were reviewed by the auditors. During our testing, it was determined the School District’s internal controls were not properly designed as it was discovered that the SEC Bookkeeper was using a stamp of the Program Director’s signature for approval of payment in the Director’s absence.
Cause:
The deficiency resulted from a lack of awareness that the existence of a stamp bearing the Director's signature could compromise separation of duties controls.
Effect:
The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to adequately review expenditures for allowability exposes the School District to unnecessary risk of error and misuse of federal funds.
Recommendation:
The School District should review current internal control procedures related to the SEC programs. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect appropriate evidence of review for associated compliance requirements. Furthermore, management should develop and implement a monitoring process to ensure that controls are operating appropriately.
Views of Responsible Officials:
We concur with this finding. Appropriate review and approval procedures have been consistently followed throughout the expenditure approval process. The use of a signature stamp did not compromise the Director’s thorough review and authorization of expenditures. Under the established process, the Bookkeeper initiates approval by sending a detailed email to the Director. The signature stamp was applied only after the Director responded with explicit approval. Additionally, a printed copy of the Director’s email approval was attached to the corresponding invoice, which the Accounts Payable Clerk verified prior to processing payment. This procedure has been in place and closely monitored to ensure compliance. A sample of this process was provided as evidence to the reviewing auditor during the review.
Auditor’s Concluding Remarks:
The use of a signature stamp constitutes a significant control weakness and raises concerns regarding the integrity and authenticity of transaction approvals. This practice does not provide an adequate audit trail related to the expenditure approval process and increases the risk of unauthorized approvals and fraudulent transactions. We reaffirm our finding and will review the status of the finding during our next audit.
FA 2024-002 Improve Internal Control Activities
Compliance Requirements: Activities Allowed or Unallowed
Allowable Costs/Cost Principles
Period of Performance
Procurement and Suspension and Debarment
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 Numbers and Titles: 84.027 – Special Education Grants to States
84.173 – Special Education Preschool Grants
COVID-19 – 84.027 – American Rescue Plan – Special Education Grants to States
COVID-19 – 84.173 – American Rescue Plan – Special Education Preschool Grants
Federal Award Numbers: H027A220073 (Year: 2023), H027A230073 (Year: 2024),
H173A220081 (Year: 2023), H173A230081 (Year: 2024), H027X210073 (Year: 2022), H173X210081 (Year: 2022)
Questioned Costs: None Identified
Description:
A review of expenditures recorded in and related to the Special Education Cluster revealed that the School District’s internal control procedures were not designed appropriately to ensure that appropriate reviews and approvals occurred.
Background Information:
The Special Education Cluster (SEC), which is comprised of the Special Education Grants to States (IDEA, Part B) and Special Education Preschool Grants (IDEA Preschool) programs, was authorized under the Individuals with Disabilities Education Act (IDEA). SEC funding is available to ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepares them for further education, employment, and independent living; ensure that the rights of children with disabilities and their parents are protected; assist states, localities, educational service agencies, and federal agencies to provide for the education of all children with disabilities; and assess and ensure the effectiveness of efforts to educate children with disabilities.
SEC 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 local educational agencies (LEAs) and overseeing the expenditure of funds by LEAs. SEC funds totaling $993,921.19 were expended and reported on the Meriwether County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024.
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.
Condition:
Internal controls over various compliance requirements associated with SEC were reviewed by the auditors. During our testing, it was determined the School District’s internal controls were not properly designed as it was discovered that the SEC Bookkeeper was using a stamp of the Program Director’s signature for approval of payment in the Director’s absence.
Cause:
The deficiency resulted from a lack of awareness that the existence of a stamp bearing the Director's signature could compromise separation of duties controls.
Effect:
The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to adequately review expenditures for allowability exposes the School District to unnecessary risk of error and misuse of federal funds.
Recommendation:
The School District should review current internal control procedures related to the SEC programs. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect appropriate evidence of review for associated compliance requirements. Furthermore, management should develop and implement a monitoring process to ensure that controls are operating appropriately.
Views of Responsible Officials:
We concur with this finding. Appropriate review and approval procedures have been consistently followed throughout the expenditure approval process. The use of a signature stamp did not compromise the Director’s thorough review and authorization of expenditures. Under the established process, the Bookkeeper initiates approval by sending a detailed email to the Director. The signature stamp was applied only after the Director responded with explicit approval. Additionally, a printed copy of the Director’s email approval was attached to the corresponding invoice, which the Accounts Payable Clerk verified prior to processing payment. This procedure has been in place and closely monitored to ensure compliance. A sample of this process was provided as evidence to the reviewing auditor during the review.
Auditor’s Concluding Remarks:
The use of a signature stamp constitutes a significant control weakness and raises concerns regarding the integrity and authenticity of transaction approvals. This practice does not provide an adequate audit trail related to the expenditure approval process and increases the risk of unauthorized approvals and fraudulent transactions. We reaffirm our finding and will review the status of the finding during our next audit.
FA 2024-002 Improve Internal Control Activities
Compliance Requirements: Activities Allowed or Unallowed
Allowable Costs/Cost Principles
Period of Performance
Procurement and Suspension and Debarment
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 Numbers and Titles: 84.027 – Special Education Grants to States
84.173 – Special Education Preschool Grants
COVID-19 – 84.027 – American Rescue Plan – Special Education Grants to States
COVID-19 – 84.173 – American Rescue Plan – Special Education Preschool Grants
Federal Award Numbers: H027A220073 (Year: 2023), H027A230073 (Year: 2024),
H173A220081 (Year: 2023), H173A230081 (Year: 2024), H027X210073 (Year: 2022), H173X210081 (Year: 2022)
Questioned Costs: None Identified
Description:
A review of expenditures recorded in and related to the Special Education Cluster revealed that the School District’s internal control procedures were not designed appropriately to ensure that appropriate reviews and approvals occurred.
Background Information:
The Special Education Cluster (SEC), which is comprised of the Special Education Grants to States (IDEA, Part B) and Special Education Preschool Grants (IDEA Preschool) programs, was authorized under the Individuals with Disabilities Education Act (IDEA). SEC funding is available to ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepares them for further education, employment, and independent living; ensure that the rights of children with disabilities and their parents are protected; assist states, localities, educational service agencies, and federal agencies to provide for the education of all children with disabilities; and assess and ensure the effectiveness of efforts to educate children with disabilities.
SEC 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 local educational agencies (LEAs) and overseeing the expenditure of funds by LEAs. SEC funds totaling $993,921.19 were expended and reported on the Meriwether County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024.
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.
Condition:
Internal controls over various compliance requirements associated with SEC were reviewed by the auditors. During our testing, it was determined the School District’s internal controls were not properly designed as it was discovered that the SEC Bookkeeper was using a stamp of the Program Director’s signature for approval of payment in the Director’s absence.
Cause:
The deficiency resulted from a lack of awareness that the existence of a stamp bearing the Director's signature could compromise separation of duties controls.
Effect:
The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to adequately review expenditures for allowability exposes the School District to unnecessary risk of error and misuse of federal funds.
Recommendation:
The School District should review current internal control procedures related to the SEC programs. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect appropriate evidence of review for associated compliance requirements. Furthermore, management should develop and implement a monitoring process to ensure that controls are operating appropriately.
Views of Responsible Officials:
We concur with this finding. Appropriate review and approval procedures have been consistently followed throughout the expenditure approval process. The use of a signature stamp did not compromise the Director’s thorough review and authorization of expenditures. Under the established process, the Bookkeeper initiates approval by sending a detailed email to the Director. The signature stamp was applied only after the Director responded with explicit approval. Additionally, a printed copy of the Director’s email approval was attached to the corresponding invoice, which the Accounts Payable Clerk verified prior to processing payment. This procedure has been in place and closely monitored to ensure compliance. A sample of this process was provided as evidence to the reviewing auditor during the review.
Auditor’s Concluding Remarks:
The use of a signature stamp constitutes a significant control weakness and raises concerns regarding the integrity and authenticity of transaction approvals. This practice does not provide an adequate audit trail related to the expenditure approval process and increases the risk of unauthorized approvals and fraudulent transactions. We reaffirm our finding and will review the status of the finding during our next audit.