Audit 40758

SECTION III - FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS 2022-001 Improve Time and Effort Documentation Federal Program(s) Information Federal Agency: U.S. Department of Education Award Name: Title I Grants to Local Educational Agencies AL Number: 84.010 Award Year: 2020, 2021 and 2022 Compliance Requirement: Allowable Costs/ Cost Principles Type of Finding Compliance Internal Control over Compliance - Significant Deficiency Criteria or Specific Requirement Grantees must provide reasonable assurance that federal awards are expended only for allowable activities and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Management is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with the type of compliance requirement of a federal program on a timely basis. Condition and Context A sample of disbursements charged to the grants were tested for proper supporting documentation in order to determine if in accordance with the federal Allowable Costs/Cost Principles. As a result of testing of payroll disbursements charged to grants, certain costs were found that did not meet the time and effort documentation requirements. Specifically, semi-annual certifications were not provided for salaried individuals charged to the grants. Cause Weaknesses in the design and operation of controls. Effect or Potential Effect Due to the weaknesses in internal controls noted above, there is a risk that amounts charged to federal awards may not be allowable or in accordance cost principles. Known and likely questioned costs are equal to all related costs charged to the grants and are as follows: AL Number: 81.010 Name of Federal Program or Cluster: Title I Grants to Local Educational Agencies Quesitoned Costs: $737,534Identification as Repeat Finding As identified in Section IV, the Schedule of Prior Year Findings, this is a repeat of finding 2021-001. The reason for this finding?s recurrence were due to the Prior Year Single Audit Report not being issued until September of 2022, which is in fiscal year 2023, so the City was not able to take the feedback and make changes for the year under audit, as the year was already over. Recommendation The weakness in internal controls noted above should be addressed in order to provide reasonable assurance that federal awards are expended only for allowable activities, and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Views of Responsible Official and Planned Corrective Action Plan Management?s corrective action plan is included at the end of this report after the schedule of prior year findings.

SECTION III - FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS 2022-001 Improve Time and Effort Documentation Federal Program(s) Information Federal Agency: U.S. Department of Education Award Name: Title I Grants to Local Educational Agencies AL Number: 84.010 Award Year: 2020, 2021 and 2022 Compliance Requirement: Allowable Costs/ Cost Principles Type of Finding Compliance Internal Control over Compliance - Significant Deficiency Criteria or Specific Requirement Grantees must provide reasonable assurance that federal awards are expended only for allowable activities and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Management is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with the type of compliance requirement of a federal program on a timely basis. Condition and Context A sample of disbursements charged to the grants were tested for proper supporting documentation in order to determine if in accordance with the federal Allowable Costs/Cost Principles. As a result of testing of payroll disbursements charged to grants, certain costs were found that did not meet the time and effort documentation requirements. Specifically, semi-annual certifications were not provided for salaried individuals charged to the grants. Cause Weaknesses in the design and operation of controls. Effect or Potential Effect Due to the weaknesses in internal controls noted above, there is a risk that amounts charged to federal awards may not be allowable or in accordance cost principles. Known and likely questioned costs are equal to all related costs charged to the grants and are as follows: AL Number: 81.010 Name of Federal Program or Cluster: Title I Grants to Local Educational Agencies Quesitoned Costs: $737,534Identification as Repeat Finding As identified in Section IV, the Schedule of Prior Year Findings, this is a repeat of finding 2021-001. The reason for this finding?s recurrence were due to the Prior Year Single Audit Report not being issued until September of 2022, which is in fiscal year 2023, so the City was not able to take the feedback and make changes for the year under audit, as the year was already over. Recommendation The weakness in internal controls noted above should be addressed in order to provide reasonable assurance that federal awards are expended only for allowable activities, and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Views of Responsible Official and Planned Corrective Action Plan Management?s corrective action plan is included at the end of this report after the schedule of prior year findings.