Audit 415191

Document Policies and Procedures over Federal Awards (Significant Deficiency) Cluster/Program: All Federal Programs Type of Finding: Internal Control over Compliance – Significant Deficiency Compliance – Other Matters Criteria or Specific Requirement: OMB’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) established significant requirements related to Federal awards. The requirements stipulate that federal award recipients must document their policies and procedures over certain aspects of financial program management. Specifically, written policies are required for the following: • Determination of allowable costs • Employee travel • Cash Management • Procurement and Suspension and Debarment • Subrecipient monitoring and management. Condition: The School District has not formalized written policies and procedures related to Federal awards as required under Uniform Guidance. Cause: The condition appears to have resulted from weaknesses in the formal documentation and implementation of the School District's internal controls over federal awards. Although the School District may have established practices for certain federal grant activities, those practices have not been sufficiently documented, formally adopted, and maintained as written policies and procedures addressing the specific requirements of Uniform Guidance. As a result, there is no comprehensive, formally approved framework that clearly establishes the School District's expectations and procedures for managing these aspects of its federal awards. Effect: The absence of formal written policies and procedures over federal award activities reduces the effectiveness of the School District's internal control framework and increases the risk that federal grant requirements may not be applied consistently among personnel or across federal programs. Without documented policies addressing allowable costs, employee travel, cash management, procurement and suspension and debarment, and subrecipient monitoring and management, employees do not have a formal reference for the procedures and controls that should be followed when administering federal awards. This also limits management's ability to demonstrate that appropriate controls have been established, communicated, and consistently applied and increases the risk of errors or noncompliance with federal award requirements not being identified and addressed timely. Questioned Costs: There are no questioned costs as a result of this finding as there are no costs directly associated with this compliance requirement. Identification as Repeat Finding: As identified in Schedule III, Summary Schedule of Prior Audit Findings, this is a repeat of finding 2024-011. Recommendation: The School District should develop, formally adopt, and implement written policies and procedures addressing the federal award requirements identified above as soon as practicable. The policies should clearly define the School District's procedures, responsibilities, approval requirements, documentation requirements, and internal controls for each applicable area and should be communicated to personnel responsible for administering federal awards. Management should periodically review and update the policies to ensure they remain consistent with current Uniform Guidance requirements and the School District's federal grant activities. Views of Responsible Officials: Management’s views and corrective action plan are included at the end of this report.