Audit 400808

C. Findings and Questioned Costs – Major Federal Award Program Audit 2025-001: Significant Deficiency in Internal Control over Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Assistance Listing Number: 84.287 Federal Program Name: Twenty-First Century Community Learning Centers Pass-through Entity: Office of Superintendent of Public Instruction Pass-through Award Number: S287C240048, S287C230048 Criteria: Under 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over compliance with the requirements of federal awards. Additionally, in accordance with 2 CFR 200.403, costs must “be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles” and “be adequately documented.” Condition: In our testing of compliance with the requirements for activities allowed or unallowed and allowable costs/cost principles, we identified one exception where estimated costs were charged to the major program for allowable programmatic activities; however, this estimate included costs that were not ultimately incurred by Washington Alliance for Better Schools (WABS). Cause: Internal controls over the review and reconciliation of actual costs incurred by WABS and amounts charged to the major program did not detect certain unallowable costs. Effect: Reimbursements in excess of actual costs incurred were requested through the major program. Questioned Costs: Known questioned costs arising from this finding total $30,102. Context: No similar estimated costs were charged to the major program, nor were any other unallowable costs identified in our testing of a statistically valid sample of forty payroll and general cash disbursement transactions. As such, we believe this finding represents an isolated incidence and not a systemic problem. Management is currently proceeding with corrective action at the pass-through agency’s direction and has adjusted the reported amounts in the financial statements and schedule of expenditures of federal awards accordingly. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that management performs a periodic reconciliation of expenditures charged to federal awards to actual costs incurred. Views of Responsible Officials: There is no disagreement with the finding.