Audit 371220

Finding 2024-003: Improve Controls and Document Retention Over Allowable Costs Federal Program Information Federal Agency: Department of Education Award Name: Special Education Cluster Assistance Listing Number: 84.027 and 84.173 Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Type of Finding Compliance Internal Control over Compliance – Material Weakness Criteria or Specific Requirement: Uniform Guidance section 2 CFR § 200.430(g) requires non-Federal entities to maintain records that accurately reflect the work performed by employees whose salaries are charged, in whole or in part, to Federal awards. For employees working on a single Federal program, semi-annual certifications are required to document time and effort. Condition and Context: During testing of 40 payroll transactions for employees charged to the Special Education program, the City was unable to provide semi-annual certifications supporting that salaries and wages were properly allocated to the grant. Cause: The City did not have adequate procedures in place to ensure that required time and effort certifications were retained and readily available for payroll charged to Federal awards. Effect or Potential Effect: Failure to maintain required time and effort documentation resulted in the questioned costs documented below. Questioned costs are reported as follows: AL Number(s) Name of Federal Program or Cluster Questioned Costs 84.027 and 84.173 Special Education Cluster $2,572,675 Recommendation: We recommend the City establish and implement procedures to ensure that semiannual certifications are completed, maintained, and reviewed for all personnel whose salaries are charged to Federal awards. Views of Responsible Officials: See corrective action plan.