Audit 412321

Improve Controls Over Activities Allowed or Unallowed and Allowable Costs/Cost Principles Over Federal Awards (Significant Deficiency) Federal Agency: Department of Education Cluster/Program: Special Education Cluster AL Number(s): 84.027 Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding Other Matter Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement Employees whose salaries and wages are charged, in whole or in part, to a federal award must maintain appropriate documentation supporting the time worked on the federally funded program. Time and effort records should be completed and approved in accordance with the School District's policies and federal grant requirements. Condition and Context During testing of payroll expenditures charged to the Special Education grant, we noted that one of the nine employee's timesheets selected was not signed by the supervisor, as required by District procedures. As a result, there was insufficient evidence that the documented hours worked were reviewed and approved prior to payroll processing. Cause Established procedures requiring the review and approval of timesheets were not consistently followed. Effect or Potential Effect Failure to maintain properly approved time and effort documentation increases the risk that payroll expenditures charged to the grant may not be adequately supported and could result in questioned costs or noncompliance with federal grant requirements. Questioned Costs None noted. The payroll charge for costs in question is below $25,000. Recommendation We recommend the School District strengthen its review procedures to ensure all timesheets supporting payroll costs charged to federal grants are completed and signed by the employee and reviewed and approved by an appropriate supervisor prior to processing payroll. Periodic monitoring should be performed to verify compliance with established procedures. Views of Responsible Official Management agrees with the finding. Planned Corrective Action Management’s corrective action plan is included at the end of this report after the schedule of prior year findings.