Audit 377389

SIGNIFICANT DEFICIENCY 2025-001 - Allowable Activities/Allowable Costs Federal Program Information: Department of Education: CFDA - 84.010 - Title I Criteria: The following CFR(s) apply to this finding: 2 CFR 200.303), 2 CFR section 200.430(g). Condition: During audit procedures, it was identified that the Unit’s controls over allowable Activities/Allowable Costs were not working adequately for the payroll process. Cause: The Unit does not have the necessary internal controls over compliance. Effect: The Unit’s inadequate controls over coding enables an inherent risk of noncompliance of allowable activities/allowable costs by allowing employees to be incorrectly paid from the wrong account. Lack of contracts from private school employees creates a risk of supplanting funding rather than supplementing. Identification of Questioned Costs: None identified. Context: Eighty payroll charges were tested, results are as follows: timesheets do not include the program code or program name the time should be charged to. Unit has to rely on correct input of coding when the employee is set up in the system and external notes for employees who work in more than one program. No additional check and balance was noted and one non Title I employee was incorrectly paid out of the program, which was corrected during audit. Timesheet program did not have the same employment position as the contracted position for two of the employees reviewed, eight of the employees positions were inconsistent on the timesheets. Contracts or form of employment and wage documentation was not required from the private school for the Title I employees which could result in unallowable costs or supplanting private funds with federal funding. Eighty payroll charges were tested. This is not a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit implement internal control processes and procedures to ensure that only Allowable Activities/Allowable Costs are charged to the program. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the Maine School Administrative District No. 1.