Audit 397571

2025-003 Compliance and Significant Deficiency in Internal Control over compliance with Activities Allowed or Unallowed, Allowable Cost/Cost Principles U.S. Department of Education Passed through NYS Department of Education Program Name: Special Education Cluster AL#: 84.027 and AL#: 84.173 Condition: During our testing of the payroll expenditures for the Special Education Cluster, we found that the District’s required payroll certifications were incomplete for 4 individuals out of 13 total employees paid from the program. The certification documents lacked signatures or contained dating issues by the supervisor reviewing them. Criteria: According to 2 CFR, Part 430(i)(l) of the Office of Management and Budget’s Uniform Grant Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provide reasonable assurance the charges are accurate, allowable and properly allocated. Context: We reviewed the files maintained by the district for the fiscal year and found that there were multiple instances of incomplete documentation with respect to the special education cluster programs. The documentation was present for 93% of the payrolls tested, however, supervisory review and verification documentation was lacking for 4 employees. Cause: The District did not have sufficient internal controls in place to ensure that the payroll certification process was being completed properly in accordance with the District’s policies and grant compliance requirements. Effect: Without adequate internal controls over the employee’s time being charged to the grant and the certification requirement, the School District cannot ensure that federal funds are paid in accordance with allowable costs and the time worked in the grant program. The District is not in compliance with the requirements of the Special Education grant programs with respect to Activities Allowed or Unallowed and Allowable Costs. Questioned Costs: Support for the employees’ whose time was charged to the Federal award programs in question was reviewed and it was determined that for all employees the time being charged to the grant was appropriate, therefore, there were no questioned costs. Recommendation: We recommend that the District’s written procedures addressing internal controls with respect to program requirements be followed to ensure the District is in compliance at all times. We recommend that the District ensures that the employees working in the grants are certifying their actual percent of time and effort that is being spent working in the federal award programs, and that the supervisory review and verification is completed and fully documented. Minimum requirements are that monthly certifications should be completed if less than 100% of time is being worked in the federal award program or semiannually if 100% of time is being spent.