Audit 363217

Condition: The auditee submitted reimbursement requests to the Mississippi Department of Education (MDE) that were not fully supported: Standard monthly amounts requested for Digital Learning Instructor (DLI) labor exceeded actual contract costs, resulting in overstatements. 1 of 60 items sampled lacked support for $11,700 in charges. Cause: The Consortium requested funds before receiving invoices or verifying actual expenses. There was no reconciliation process in place to verify that reimbursement requests matched actual expenditures. Effect: Federal funds were received in excess of allowable costs and not returned to the grantor. These excess reimbursements represent questioned costs which the grantor could request funds to be refunded. Criteria: In accordance with 2 CFR §200.403 and §200.430, costs must be necessary, reasonable, and allocable, and adequately documented to be allowable under federal awards. Questioned Costs: Total known questioned costs are $49,082, which includes: $37,382 related to Digital Learning Instructor (DLI) contract labor, including $34,445 in excess labor charges and $2,937 in related indirect costs. These charges were identified through a 100% review of all DLI contract labor activity for fiscal year 2023. $11,700 from a single reimbursement request that partially lacked supporting documentation. This item was identified during testing of a sample of 60 items totaling $6,545,759.87. Based on this sample, we project likely questioned costs of $16,918, using a non-statistical method. Therefore, total questioned costs are estimated at $54,300. Recommendation: Reimbursement requests should only be submitted after expenses are incurred and documented. The Consortium should wait for invoices before requesting funds, or reconcile estimates to actual costs and return excess funds, and maintain full documentation for all requests. Views of Responsible Officials: The Consortium acknowledges the finding and is working to establish a reconciliation process to identify and return any excess funds, and providing staff training on documentation and cost principles.

Condition: The auditee submitted reimbursement requests to the Mississippi Department of Education (MDE) that were not fully supported: Standard monthly amounts requested for Digital Learning Instructor (DLI) labor exceeded actual contract costs, resulting in overstatements. 1 of 60 items sampled lacked support for $11,700 in charges. Cause: The Consortium requested funds before receiving invoices or verifying actual expenses. There was no reconciliation process in place to verify that reimbursement requests matched actual expenditures. Effect: Federal funds were received in excess of allowable costs and not returned to the grantor. These excess reimbursements represent questioned costs which the grantor could request funds to be refunded. Criteria: In accordance with 2 CFR §200.403 and §200.430, costs must be necessary, reasonable, and allocable, and adequately documented to be allowable under federal awards. Questioned Costs: Total known questioned costs are $49,082, which includes: $37,382 related to Digital Learning Instructor (DLI) contract labor, including $34,445 in excess labor charges and $2,937 in related indirect costs. These charges were identified through a 100% review of all DLI contract labor activity for fiscal year 2023. $11,700 from a single reimbursement request that partially lacked supporting documentation. This item was identified during testing of a sample of 60 items totaling $6,545,759.87. Based on this sample, we project likely questioned costs of $16,918, using a non-statistical method. Therefore, total questioned costs are estimated at $54,300. Recommendation: Reimbursement requests should only be submitted after expenses are incurred and documented. The Consortium should wait for invoices before requesting funds, or reconcile estimates to actual costs and return excess funds, and maintain full documentation for all requests. Views of Responsible Officials: The Consortium acknowledges the finding and is working to establish a reconciliation process to identify and return any excess funds, and providing staff training on documentation and cost principles.