Finding Number: 2023-001
Prior Year Finding: No
Federal Agency: U.S. Department of Treasury
Federal Program: Coronavirus State and Local Fiscal Recovery Funds
Assistance Listing: 21.027
Pass-Through Entity: Maryland State Department of Education
Pass-Through Entity Award Information: 211874 (3/3/202...
Finding Number: 2023-001
Prior Year Finding: No
Federal Agency: U.S. Department of Treasury
Federal Program: Coronavirus State and Local Fiscal Recovery Funds
Assistance Listing: 21.027
Pass-Through Entity: Maryland State Department of Education
Pass-Through Entity Award Information: 211874 (3/3/2021 – 12/31/2024)
Compliance Requirement: Allowable Costs/Cost Principles
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or Specific Requirement: Compliance: 2 CFR section 200.403 states, in part, except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles.
(b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items.
(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity.
(d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost.
(e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part.
(f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period.
(g) Be adequately documented.
Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition/Context:
For one of sixty transactions selected for testing, Anne Arundel County Board of Education (the Board) was unable to provide documentation supporting that the payment was allowable under the program. The invoice supporting an employee purchase for summer baking/cooking camp could not be provided.
Questioned Costs:
$31.93, the amount of the unsupported employee purchase.
Cause:
The Board’s procedures were not sufficient to ensure that it maintained documentation supporting employee purchases. Internal controls did not prevent or detect the error.
Effect:
Unallowable costs could be charged to the program.
Recommendation:
We recommend that the Board review its policies and procedures to ensure that it maintains documentation supporting employee purchases and that this documentation is readily available for audit.
Views of responsible officials:
Explanation of disagreement with audit finding:
There is no disagreement with the audit finding. AACPS acknowledges that a receipt supporting the $31.93 purchase could not be located. AACPS made several attempts during the single audit's development phase to procure the receipt from the employee, but without success. Throughout the audit, the teacher furnished a detailed account of the purchased items and the purpose behind it. Nevertheless, the supervisor had sanctioned the purchase, the teacher provided a valid reason for the missing receipt, and the amount was negligible. The principal had initially approved the purchase, and supervisor authorization is standard procedure for all purchases, either before or after the transaction. Therefore, AACPS believes this finding should be considered immaterial and requests its exclusion from the single audit report.
Action taken in response to finding: A meeting has been scheduled with the Supervisor of Purchasing to begin the process to review the Purchasing Card (PCard) Manual and included processes and procedures. AACPS will review and update as necessary to ensure that all staff members who have PCard responsibility (purchase and approval authority) are aware of the crucial need to maintain accurate and complete records, including copies of all receipts. AACPS believes its current policies and procedures are sufficient and provide sound internal controls.
Name(s) of the contact person(s) responsible for corrective action: Matthew Stanski, Chief Financial Officer; Krishna Bappanad, Supervisor of Finance; Mary Jo Childs, Supervisor of Purchasing.
Planned completion date for corrective action plan: February 28, 2024.