Audit 376486

Finding 2025-006 Lack of Internal Control over Activities Allowed or Unallowed and Allowable Costs/Activities Federal Agency: U.S. Department of Education, passed through the State of Alaska, Department of Education and Early Development (DEED) Federal Program(s): Title I-A Basis/School Improvement 1003(a) Assistance Listing Number(s):84.010A Award Number(s): Federal Award Numbers: S010A230002 and S010A24000, Pass through entity award numbers: IP 25.IASD.01 and SI 25.IASD.01 Award Year(s): 2025 Type of Finding: Significant deficiency in internal control over compliance. Criteria: Management is responsible for designing, implementing and maintaining internal controls relevant to ensuring that transactions charged to programs follow proper internal control processes (2 CFR Part 200 Subpart E § 200.400 (d)). Condition and Context: We tested seventeen (17) payroll transactions charged to the program and noted three (3) instances where the transaction lacked supporting documentation for approved employee pay rate. The transactions were not considered unallowable under the program. Cause: Lack of internal controls over maintaining adequate supporting documentation for transactions charged to the program. Effect: Lack of adequate supporting documentation for transactions allows for an environment where unallowable costs could be charged to the program. Repeat Finding: No. Questioned Costs: None reported. Recommendation: We recommend that management strengthen internal controls over payroll transactions and improve the maintenance of supporting documentation processes to ensure compliance and accuracy of payroll transactions. Management Response: Management concurs with this finding. See Corrective Action Plan