Audit 383876

Criteria or specific requirement (including statutory, regulatory, or other citation) - L. Reporting - The Illinois State Board of Education requires that grant expediture reports be submitted by the 20th day after the through date of the expenditure report. In order to prepare accurate and timely expenditure reports, postings to the general ledger should be accurate and any necessary adjustments should be kept at a minimum, if possible. Condition - Out of 8 quarterly expenditure reports reviewed, 6 of them (75%) were filed beyond the 20th day after the through date. Additionally, GWA noted several adjustments to the general ledger where costs related to payroll, furnishings, etc. were reclassed to ESSER expenditure accounts as of year-end. Questioned Costs - N/A. Context - Although items reclassified to ESSER expenditure accounts appear to be compliant, it does not appear that the District was consistently coding expenditures to proper grant accounts when they were paid. An example is a reclassification of capital type expenditures from Function 2540, Object 310 to Function 2540, Object 550. Both accounts were in the Education Fund. The expenditures were related to the 2023 ESSER II grant. The time period of payments charged to Object 310 ranged from October 16, 2023 to December 18, 2023. The reclassification to Object 550 did not take place until March 31, 2024 and the reporting of this activity to ISBE did not take place until May 31, 2024. Effect - Failure to properly code expenditures to appropriate accounts that align with grant budgets creates delays in the reporting process and increases the potential for errors in reporting such as duplicate requests for reimbursement or further mispostings. Cause - The inability to implement a control structure where grant expenditures are consistenly coded to budgeted line items for approved grants creates an environment that becomes overly reliant on detective controls to identify misposted activity to be corrected with adjusting journal entires and can cause delays in the reporting of such activity to funding agencies. Recommendation - The District should look to create a control structure that better codes expenditures when paid to align with approved grant budget line items. This will allow for better accuracy and timeliness in grant reporting so that reporting deadlines can be met consistenly. Management's Response - The District will be training the grant personnel about proper coding and grant expenditure timelines to ensure timely and accurate submission of expenditure reports.

Criteria or specific requirement (including statutory, regulatory, or other citation) - F. Equipment & Real Property Management - Per 2 CFR 200.313(d)(2), "A physical inventory of the property must be conducted, and the results must be reconciled with the property records at least once every two years." Condition - The District was unable to demonstrate that a physical inventory was performed over the past two years. Questioned Costs - N/A. Context - The District maintains that a physical inventory takes place annually, but was unable to produce documentation to support when the last inventory took place. Effect - Failure to perform an inventory of equipment purchased by the District could result in the inability to detect a potential loss of assets and noncompliance with federal regulations regarding the proper disposal of equipment purchased with federal funding. Cause - The inability to maintain documentation for the performance of physical inventories of equipment does not exhibit compliance with Federal regulations. Recommendation - The District should create procedures to document and maintain records related to physical inventories of equipment to exhibit compliance with Federal regulations. Management's Response - The District has a physical inventory scheduled for 2025. The purchase order has been generated.