Finding 2025-001 Material Weakness and Material Noncompliance U.S. Department of Education Passed-through Mississippi Department of Education Program Names: Elementary and Secondary School Emergency Relief II & (ESSER) and Title I Program ALNs: 84.425D 84.010 Compliance Requirements: Allowable Costs/Allowable Activities, Procurement, and Equipment and Real Property Management CRITERIA: Recipients of federal funds must have internal controls in place to ensure compliance with federal cost principles, procurement, and to account for equipment purchased using grant funding. CONDITION: During a grant monitoring by the Mississippi Department of Education (MDE) in May 2022, the district was unable to provide source documents that it followed proper federal cost principles and procurements guidelines and it was unable to locate computers and related equipment purchased with federal funds. As a result, during the current fiscal year, the district had to reimburse MDE $1,091,271 in questioned costs related to this monitoring visit. CONTEXT: The school district did not follow requirements related to allowable costs, allowable activities, procurement, and equipment and real property management.. CAUSE: The cause is a result of not properly implementing a designed system of accounting and internal controls. EFFECT: Noncompliance with federal grant requirements. IDENTIFICATION OF REPEAT FINDING: No QUESTIONED COSTS: $1,091,271. RECOMMENDATION: The school district should implement policies and procedures to ensure all applicable compliance requirements are being met. VIEWS OF RESPONSIBLE OFFICIALS: We will implement policies or procedures to establish an internal control system that will ensure strong financial accountability, including compliance with state and federal grant requirements. .