Audit 410001

Finding 2025-002 Material Weakness & Non-Compliance: U.S. Department of Education Passed-through Mississippi Department of Education Program Name: Elementary and Secondary School Emergency Relief ARP (ESSER) Program ALN: 84.425U Compliance Requirement: Allowable Costs/Cost Principles CRITERIA: 2 CFR 200.302(b)(3) requires non-Federal entities to maintain records that adequately identify the source and application of funds provided for federally-assisted activities. Additionally, 2 CFR 200.403(g) requires costs to be adequately documented in order to be allowable under Federal awards. The district’s internal control procedures require that disbursements be supported by an approved invoice, receiving documentation, and evidence of authorization prior to payment. CONDITION: During our test of 30 disbursements selected from the vendor payment population for the ARP ESSER grant, we noted 3 instances for which the district could not provide all the vendor invoices supporting the amount disbursed. In these instances, we were unable to substantiate that the goods or services were received or that the amount paid agreed to an amount owed. CONTEXT: The 3 instances involved different vendors indicating the issue was not isolated to a single vendor or purchase. CAUSE: The cause is a result of not properly implementing a designed system of accounting and internal controls. EFFECT: Noncompliance with federal recordkeeping and cost documentation requirements, and an increased risk that unallowable or unsupported costs could be charged to the federal award without detection. IDENTIFICATION OF REPEAT FINDING: No QUESTIONED COSTS: None. Although the district could not provide all the invoices for the 3 disbursements noted, the vendors and purchase descriptions were consistent with allowable ESSER program costs based on other documentation available (e.g., purchase orders, check detail, or contracts), and no indication of unallowable or unauthorized purchases was identified. 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 federal purchasing requirements.