Audit 415795

8. Criteria or specific requirement - According to Uniform Guidance 2 CFR Part 200, Appendix XI, the District must provide records that adequately identify the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, and expenditures and be supported by source documentation. Uniform Guidance 2 CFR Part 200, Appendix XI establishes strict standards for documenting personnel expenses. It requires charges to Federal awards for salaries and wages to be based on records that accurately reflect the work performed and are supported by a system of internal controls. 9. Condition - The District did not maintain adequate financial records and documentation to support expenditures claimed for both operational expenditures and personnel expenses. Specifically operational disbursements lacked vendor invoices, itemized receipts, or billing statement to confirm business purpose. Payroll allocations charged to the grant lacked signed timesheets, certifications, and personnel activity reports to substantiate the hours working on the program. 10. Questioned Costs - The exact amount of questioned costs cannot be determined at this time due to a lack of vendor invoices and verified payroll, the full financial exposure to the federal granting agency is currently unknown. 11. Context - Lack of adequate record keeping and documentation was observed through the entire fiscal year for both operational and personnel expenses. 12. Effect - The District is in non-compliance with federal award record keeping requirements. Without vendor invoices and personnel logs, the District cannot prove that these expenditures were reasonable, necessary, and exclusively allocated to the performance of the grant. 13. Cause - The District experienced significant staff turnover in the business office and accounting department, and the remaining staff did not have the capacity or adequate training to maintain the records. 14. Recommendation - The District must ensure that expenditures can be supported by appropriate source documentation. 15. Management's response - The District will ensure all expenditures have supporting documentation and will implement a documentation checklist prior to payment approval. The District will also implement time and effort reporting requirements for all personnel costs.

8. Criteria or specific requirement (including statutory, regulatory, or other citation) - According to Uniform Guidance 2 CFR Part 200, Appendix XI, the District must submit financial reports, performance reports, and other required reports as specified by the terms and conditions of the federal award. For quarterly reports submissions are typically due no later than 30 days after the reporting period. Final financial reports are due no later than 120 days after the period of performance end date. 9. Condition - The District did not submit the required monthly and quarterly expenditure reports on time. 10. Questioned Costs - There are no questioned costs associated with this finding. 11. Context - We noted reporting delays occurred in multiple months and quarters. 12. Effect - Non-compliance with federal reporting guidelines, delays tracking of federal funds and can delay the reimbursement cycle. 13. Cause - The District experienced significant staff turnover in the business office and accounting department, and the remaining staff did not have the capacity or adequate training to monitor the grant reporting deadlines. 14. Recommendation - Establish internal deadlines, implement compliance calendar and assign backup personnel. 15. Management's response - The District will assign dedicated grant personnel to handle compliance tracking moving forward.