Audit 364686

Having sound internal controls in place over the disbursement process is pertinent to a properly functioning control environment. Although the School District ultimately provided certified payrolls from contractors, we noted that the School District was unable to provide documentation that all certified payrolls selected for testing had been received and reviewed prior to making payments to contractors. Without proper controls over wage rate requirements, there is an increased risk that the School District and its contractors and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. We recommend that the School District implement additional procedures to ensure prevailing wage documentation provided by contractors is reviewed prior to making payments to contractors and that indication of the review of the certified payroll reports are maintained.

2 CFR 200.328 states, in part, (c) the recipient or subrecipient must submit financial reports as required by the Federal award. Reports submitted annually by the recipient or subrecipient must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. (d) The final financial report submitted by the recipient must be due no later than 120 calendar days after the conclusion of the period of performance. A subrecipient must submit a final financial report to a pass-through entity no later than 90 calendar days after the conclusion of the period of performance. See also § 200.344. The Federal agency or pass-through entity may extend the due date for any financial report with justification from the recipient or subrecipient. Further, 2 CFR 200.502(a) states that the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. We noted that the District filed its FY23 final expenditure report by the required deadline. However, the District claimed $476,752 more in expenditures on the final expenditure report than they had identified in eligible expenditures for the program. The District reclassified $476,752 in ESSER expenditures from the general fund into the ESSER fund after the reporting deadline. We noted that this determination was made after the obligation period had ended and without an extension request being made to the pass-through agency, Ohio Department of Education and Workforce (ODEW) to extend the due date. Further, the ESSER expenditures adjusted from the general fund did not align with the object codes budgeted with ODEW through the Comprehensive Continuous Improvement Plan and reported on the final expenditure report. Additionally, system reports originally filed with ODEW along with the final expenditure report did not accurately reflect the expenditures ultimately claimed for the program. We recommend that the District adopt proper procedures to ensure that reported expenditures on the final expenditure report are accurate and obligated by the appropriate deadline. Requests to extend the due date of the reporting requirement should be made when necessary. Further, expenditures should only be made for objects budgeted and approved by ODEW. In instances where reclassifications are made to program expenditures, the District should ensure that revisions to previously submitted reports are made, when necessary.

Having sound internal controls in place over the disbursement process is pertinent to a properly functioning control environment. Although the School District ultimately provided certified payrolls from contractors, we noted that the School District was unable to provide documentation that all certified payrolls selected for testing had been received and reviewed prior to making payments to contractors. Without proper controls over wage rate requirements, there is an increased risk that the School District and its contractors and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. We recommend that the School District implement additional procedures to ensure prevailing wage documentation provided by contractors is reviewed prior to making payments to contractors and that indication of the review of the certified payroll reports are maintained.

2 CFR 200.328 states, in part, (c) the recipient or subrecipient must submit financial reports as required by the Federal award. Reports submitted annually by the recipient or subrecipient must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. (d) The final financial report submitted by the recipient must be due no later than 120 calendar days after the conclusion of the period of performance. A subrecipient must submit a final financial report to a pass-through entity no later than 90 calendar days after the conclusion of the period of performance. See also § 200.344. The Federal agency or pass-through entity may extend the due date for any financial report with justification from the recipient or subrecipient. Further, 2 CFR 200.502(a) states that the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. We noted that the District filed its FY23 final expenditure report by the required deadline. However, the District claimed $476,752 more in expenditures on the final expenditure report than they had identified in eligible expenditures for the program. The District reclassified $476,752 in ESSER expenditures from the general fund into the ESSER fund after the reporting deadline. We noted that this determination was made after the obligation period had ended and without an extension request being made to the pass-through agency, Ohio Department of Education and Workforce (ODEW) to extend the due date. Further, the ESSER expenditures adjusted from the general fund did not align with the object codes budgeted with ODEW through the Comprehensive Continuous Improvement Plan and reported on the final expenditure report. Additionally, system reports originally filed with ODEW along with the final expenditure report did not accurately reflect the expenditures ultimately claimed for the program. We recommend that the District adopt proper procedures to ensure that reported expenditures on the final expenditure report are accurate and obligated by the appropriate deadline. Requests to extend the due date of the reporting requirement should be made when necessary. Further, expenditures should only be made for objects budgeted and approved by ODEW. In instances where reclassifications are made to program expenditures, the District should ensure that revisions to previously submitted reports are made, when necessary.