Program: AL 84.048 – Career and Technical Education – Basic Grants to States – Allowability Grant Number & Year: V048A220027, FFY 2023 Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR § 3474.1 (January 1, 2024), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). Per 2 CFR § 200.403 (January 1, 2024), allowable costs must be necessary, reasonable, and adequately documented. 2 CFR § 200.430(i)(1) (January 1, 2024) states, in part, the following: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: * * * * (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Enclosure A of the “Letter to Chief State School Officers on Granting Administrative Flexibility for Better Measures of Success” (September 7, 2012) provides guidelines for local educational agencies (LEAs), using a substitute system for time-and-effort reporting. Enclosure A states, in relevant part, the following: (2) Under the substitute system, in lieu of personnel activity reports, eligible employees may support a distribution of their salaries and wages through documentation of an established work schedule that meets the standards under section (3). An acceptable work schedule may be in a style and format already used by an LEA. (3) Employee schedules must: a. Indicate the specific activity or cost objective that the employee worked on for each segment of the employee’s schedule; b. Account for the total hours for which each employee is compensated during the period reflected on the employee’s schedule; and c. Be certified at least semiannually and signed by the employee and a supervisory official having firsthand knowledge of the work performed by the employee. Good internal control requires adequate supporting documentation to ensure that expenditures are correct and allowable. Condition: The Agency lacked documentation to support 3 of 11 aid payments tested. Repeat Finding: No Questioned Costs: $34,983 known Statistical Sample: No Context: We randomly selected 11 reimbursement payments to subrecipients for testing. We noted the following: • One reimbursement to a community college included salaries and benefits for two employees for $23,583. Documentation to support the salaries and benefits was inadequate. The Agency provided time and effort certifications, stating that the employees worked 50% on the Career and Technical Federal program and 50% on a different program. However, no other documentation – such as an employee work schedule – was provided to support that this distribution was correct. The $23,583 paid for salaries and benefits are considered questioned costs. • One reimbursement was to an Educational Service Unit (ESU). The ESU made payments to schools in order for the schools to reimburse its teachers for their costs for attending a conference and also paying the teachers a stipend for attending the conference. The payments to teachers were to include $120/night for hotels, $300 for registration fees, $265 for mileage, and $125/day as a stipend for each day the teachers attended the conference. However, documentation was not provided to support that the reimbursements/stipends went to all the teachers, or if the school should have kept the reimbursement if it paid for the hotels and registration fees. Additionally, documentation was lacking to support that all the teachers actually stayed at the hotel or that the school paid for the hotel. Lastly, documentation was not provided to support that the stipend amount was reasonable and approved by appropriate personnel. This resulted in questioned costs of $11,192. • One reimbursement to a school included payments to teachers for attending a conference. One hundred and sixty dollars was paid to 13 teachers based on the U.S. General Services Administration per diem rates for meals and incidental expenses. However, per the conference agenda, lunch was provided for one of the days, so the amount paid per teacher should have been reduced to $144, but it was not. This resulted in questioned costs of $208. Federal payment errors for the sample tested were $34,983. The total sample tested was $1,910,166, and aid payments for the fiscal year totaled $7,485,494. Based on the sample tested, the dollar error rate for the sample was 1.83% ($34,983/$1,910,166), which estimates the potential dollars at risk for fiscal year 2024 to be $136,985 (dollar error rate multiplied by population). Cause: Lack of procedures to ensure all costs were adequately documented. Effect: Without adequate supporting documentation, there is an increased risk that Federal awards could be used for unallowable costs. Recommendation: We recommend the Agency improve procedures to ensure that payments are supported by adequate documentation. Management Response: The Nebraska Department of Education’s Office of Career, Technical, and Adult Education provided emails which detailed the purpose for Sharri’s work within the CTE program. The college provided the time and effort certification for the time period in question for the employee but the documentation from the college did not provide the actual work performed information. The Nebraska Department of Education’s Office of Career, Technical, and Adult Education was able to provide most of this documentation related to the reimbursement for teachers attending the conference but was unable to collect the documentation from some of the schools within the ESU 4 Perkins consortium. ESU 4 was not able to provide a stipend policy, though they were able to provide meeting notes where the stipend policy was outlined ahead of time.
Program: AL 84.126 – Rehabilitation Services Vocational Rehabilitation Grants to States – Reporting Grant Number & Year: H126A220039, FFY 2022; H126A240039, FFY 2024 Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR § 3474.1 (January 1, 2024), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). 2 CFR § 200.302 (January 1, 2024) states, in part, the following: (a) Each State must expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the State’s own funds. In addition, the state’s and the other non-Federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. EnterpriseOne is the official accounting system for the State of Nebraska, and all expenditures are generated from it. 34 CFR § 361.60(a)(1) (July 1, 2023) states the following: Except as provided in paragraph (a)(2) of this section, the Federal share for expenditures made by the State under the vocational rehabilitation services portion of the Unified or Combined State Plan, including expenditures for the provision of vocational rehabilitation services and the administration of the vocational rehabilitation services portion of the Unified or Combined State Plan, is 78.7 percent. Per 34 CFR § 76.707 (July 1, 2023), personal services performed by an employee of the State are obligated when the services are performed. Good internal control and sound accounting practices require adequate policies and procedures to ensure that information included in Federal reports is correct and accurate. Condition: The Agency lacked procedures to ensure that the unliquidated obligations, indirect costs, and administrative costs were reported accurately on the RSA-17 reports. Repeat Finding: No Questioned Costs: None Statistical Sample: No Context: We tested two RSA-17 reports submitted by the Agency. We noted the following: Grant H126A240039, Quarter Ended March 31, 2024 • The Federal and Non-Federal Share of Unliquidated Obligations reported on lines 18 and 29 were $2,905,268 and $786,305, respectively. The amounts reported were not correct due to the following: o The Agency included the unliquidated indirect costs for the month of March 2024 twice, resulting in the amount reported being overstated by $43,901 for the Federal Share and $11,882 for the Non-Federal Share. o The Agency did not include the payroll costs for time worked from March 11, 2024, to March 24, 2024. Additionally, the Agency erroneously included the payroll costs for time worked from April 1, 2024, to April 7, 2024. This resulted in the amount reported being overstated by $164,849 for the Federal Share and $44,616 for the Non-Federal Share. o Lastly, the Agency did not provide adequate documentation to support the unliquidated amounts for contracts. Per the Agency, the amount was taken from proposals submitted by possible contractors; however, the Agency did not provide documentation to support those written commitments existed as of March 31, 2024. • The amount reported on line 36g for Federal Share of Indirect Costs was not correct. The Agency reported that the Federal share of indirect costs was $484,844. However, this was 100% of the total indirect costs recorded. Only $381,573 should have been reported as the Federal share based on the 78.7% matching rate. Therefore, the amount reported was overstated by $103,271. Grant H126A220039, Quarter Ended September 30, 2023 • Line 37 Federal and Non-Federal Administrative Expenses was not adequately supported. The Agency reported $1,606,807 of Federal and non-Federal administrative costs. The Agency did not set up business units or other accounts in the State’s financial accounting system (EnterpriseOne) sufficiently to identify the administrative costs recorded for the vocational rehabilitation program. To determine the amount of administrative costs to report, the Agency ran a general ledger of all expenditures and manually identified the administrative costs based off the payee description and prior knowledge of transactions. However, transactions appear to have been excluded that should have been included as administrative expenses. Therefore, we were unable to verify that the amount reported was correct. Cause: Inadequate review and documentation of amounts reported. Additionally, the Agency stated that there was an error in the quarter ended March 31, 2024, report that prevented the Agency from inputting the correct value for the Federal share of indirect costs. However, no documentation was provided to support this was the case. Effect: Increased risk for errors and noncompliance with Federal requirements. Recommendation: We recommend the Agency update its procedures to ensure that obligations and expenditures are being properly reported in accordance with reporting requirements. Management Response: Federal and Non-Federal Share of Unliquidated Obligations - The incorrect amounts reported for unliquidated cost March indirect costs, payroll, and contracts were due to an error when completing the report. An additional review from NDE Budget and Grant Management staff of unliquidated obligations will be included in future reports to ensure accuracy. Federal and Non-Federal Administrative Expenses was not adequately supported - The agency does set up business units or other accounts (subledgers, subsidiaries) in the State’s financial accounting system (EnterpriseOne) to sufficiently identify administrative costs. Sub ledgers ERSO, ERTRANSI and subsidiaries 110, TRYLN, SRC, TRANSI were specifically set up separate administrative costs. These will be used to identify administrative costs for future reports. APA Response: The subledgers and subsidiaries identified in the management’s response were not used to identify administrative expenses when the Agency completed the RSA-17 report. The administrative expenses reported did not agree to the amount recorded in EnterpriseOne to these subledgers and subsidiaries for the grant.
Program: AL 84.126 – Rehabilitation Services Vocational Rehabilitation Grants to States – Period of Performance Grant Number & Year: H126A220039, FFY 2022 Federal Grantor Agency: U.S. Department of Education Criteria: Per 34 CFR § 76.707 (July 1, 2023), work performed by a contractor is obligated on the date the State “makes a binding written commitment to obtain the services.” Per 2 CFR § 3474.1 (January 1, 2024), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). Per 2 CFR § 200.403(h) (January 1, 2024), costs “must be incurred during the approved budget period.” The Rehabilitation Service Administration Period of Performance for Formula Grant Awards FAQs (published March 21, 2017) states the following: 8. Can the total cost of a contract be obligated to a grant award if some of the contract services will be performed after the period of performance ends? Yes. If a contract is entered into during a period of performance, but some of the services will be performed after the period of performance ends (in other words, some services would be performed after the FFY of appropriation and the carryover year, if applicable, has ended), the contract would still constitute a valid obligation, as established by 34 CFR 76.707, for purposes of the period of performance in which it was incurred. Good internal control and sound accounting procedures require adequate policies and procedures to ensure that only those expenditures obligated within the period of performance are charged to the grant. Condition: One of 25 expenditures tested was not obligated within the period of performance. Repeat Finding: No Questioned Costs: $2,586 known Statistical Sample: No Context: The Agency paid $2,586 to a provider for job search and placement services that occurred between August 15, 2023, to November 22, 2023. The Agency charged the payment to grant H126A220039, and costs were to be obligated by September 30, 2023, for this grant. The State did not make any written commitment to obtain or pay for these services until October 17, 2023, when the Agency signed an authorization form for said services. As the written commitment was not issued until after September 30, 2023, the payment was not allowed to be charged to the grant. Total questioned costs from the random sample were $2,586. The total sample tested was $39,530, and the total sample population was $5,495,235. Based on the sample tested, the dollar error rate for the sample was 6.54% ($2,586/$39,530), which estimates the potential dollars at risk for fiscal year 2024 to be $359,388 (dollar error rate multiplied by the population). Cause: The Agency lacked proper understanding of when costs should be considered obligated. The Agency reported that it completed the Plan for Job Development on September 3, 2023, and considered it obligated at that time. However, the authorization for the plan was not signed until October 17, 2023. Effect: Without adequate procedures, there is increased risk that the Agency will improperly charge expenditures to the grant outside of its period of performance, resulting in noncompliance. Recommendation: We recommend the Agency strengthen procedures to ensure that expenditures are charged to its grants within the period of performance. Management Response: The agency understands costs are considered obligated at the time of authorization. The case management system is programmed to assign the cost to the grant based on the start date of the service at the time of the obligation (authorization). The programming did not account for a situation when the obligation is created in a different federal fiscal year then the start date of the service. The obligation in question was made on 10/17/23 (FFY23) for a service that started on 8/15/23 (FFY22). The obligation is allowed to be charged to grant H126A220039, but should have been reported as an obligation to the carryover year (FY23) business unit for grant H126A220039, rather than an obligation to the year of appropriation (FFY22) business unit for grant H126A220039. The obligation cannot be charged to the H126A2300390 (FFY23) grant due to service being provided in FFY22. APA Response: Grant H126A220039 had a period of performance end date of September 30, 2023. Any obligation made after this date, including the obligation made on October 17, 2023, would not be allowable to charge to this grant.
Finding Number: 2024-003 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2024 Federal Agency: US Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. As documented by the Ohio Department of Education and Workforce Office of Federal and State Grants Management, the Ohio Department of Education and Workforce requires school districts to submit the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant Final Expenditure Report (FER) by December 2, 2024. School Districts must complete the FER at the end of each fiscal year for the prior state fiscal year’s Elementary and Secondary School Emergency Relief expenditures. All expenses reported on the FER should be paid. There should be no encumbered amounts. The Treasurer and Superintendent approved and submitted the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant on September 27, 2024. However, the expenditures in this submission included the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grants expenditures as well as the 2024 grants. Therefore, the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant submitted to the Ohio Department of Education and Workforce were overstated by $3,670 and $37,263, respectively. The School District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
Finding Number: 2024-003 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2024 Federal Agency: US Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. As documented by the Ohio Department of Education and Workforce Office of Federal and State Grants Management, the Ohio Department of Education and Workforce requires school districts to submit the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant Final Expenditure Report (FER) by December 2, 2024. School Districts must complete the FER at the end of each fiscal year for the prior state fiscal year’s Elementary and Secondary School Emergency Relief expenditures. All expenses reported on the FER should be paid. There should be no encumbered amounts. The Treasurer and Superintendent approved and submitted the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant on September 27, 2024. However, the expenditures in this submission included the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grants expenditures as well as the 2024 grants. Therefore, the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant submitted to the Ohio Department of Education and Workforce were overstated by $3,670 and $37,263, respectively. The School District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
Finding Number: 2024-003 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2024 Federal Agency: US Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. As documented by the Ohio Department of Education and Workforce Office of Federal and State Grants Management, the Ohio Department of Education and Workforce requires school districts to submit the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant Final Expenditure Report (FER) by December 2, 2024. School Districts must complete the FER at the end of each fiscal year for the prior state fiscal year’s Elementary and Secondary School Emergency Relief expenditures. All expenses reported on the FER should be paid. There should be no encumbered amounts. The Treasurer and Superintendent approved and submitted the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant on September 27, 2024. However, the expenditures in this submission included the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grants expenditures as well as the 2024 grants. Therefore, the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant submitted to the Ohio Department of Education and Workforce were overstated by $3,670 and $37,263, respectively. The School District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
Finding Number: 2024-003 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2024 Federal Agency: US Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. As documented by the Ohio Department of Education and Workforce Office of Federal and State Grants Management, the Ohio Department of Education and Workforce requires school districts to submit the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant Final Expenditure Report (FER) by December 2, 2024. School Districts must complete the FER at the end of each fiscal year for the prior state fiscal year’s Elementary and Secondary School Emergency Relief expenditures. All expenses reported on the FER should be paid. There should be no encumbered amounts. The Treasurer and Superintendent approved and submitted the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant on September 27, 2024. However, the expenditures in this submission included the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grants expenditures as well as the 2024 grants. Therefore, the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant submitted to the Ohio Department of Education and Workforce were overstated by $3,670 and $37,263, respectively. The School District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
Finding Number: 2024-003 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2024 Federal Agency: US Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. As documented by the Ohio Department of Education and Workforce Office of Federal and State Grants Management, the Ohio Department of Education and Workforce requires school districts to submit the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant Final Expenditure Report (FER) by December 2, 2024. School Districts must complete the FER at the end of each fiscal year for the prior state fiscal year’s Elementary and Secondary School Emergency Relief expenditures. All expenses reported on the FER should be paid. There should be no encumbered amounts. The Treasurer and Superintendent approved and submitted the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant on September 27, 2024. However, the expenditures in this submission included the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grants expenditures as well as the 2024 grants. Therefore, the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant submitted to the Ohio Department of Education and Workforce were overstated by $3,670 and $37,263, respectively. The School District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
Finding Number: 2024-003 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2024 Federal Agency: US Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. As documented by the Ohio Department of Education and Workforce Office of Federal and State Grants Management, the Ohio Department of Education and Workforce requires school districts to submit the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant Final Expenditure Report (FER) by December 2, 2024. School Districts must complete the FER at the end of each fiscal year for the prior state fiscal year’s Elementary and Secondary School Emergency Relief expenditures. All expenses reported on the FER should be paid. There should be no encumbered amounts. The Treasurer and Superintendent approved and submitted the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant on September 27, 2024. However, the expenditures in this submission included the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grants expenditures as well as the 2024 grants. Therefore, the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant submitted to the Ohio Department of Education and Workforce were overstated by $3,670 and $37,263, respectively. The School District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
Program: AL 84.048 – Career and Technical Education – Basic Grants to States – Allowability Grant Number & Year: V048A220027, FFY 2023 Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR § 3474.1 (January 1, 2024), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). Per 2 CFR § 200.403 (January 1, 2024), allowable costs must be necessary, reasonable, and adequately documented. 2 CFR § 200.430(i)(1) (January 1, 2024) states, in part, the following: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: * * * * (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Enclosure A of the “Letter to Chief State School Officers on Granting Administrative Flexibility for Better Measures of Success” (September 7, 2012) provides guidelines for local educational agencies (LEAs), using a substitute system for time-and-effort reporting. Enclosure A states, in relevant part, the following: (2) Under the substitute system, in lieu of personnel activity reports, eligible employees may support a distribution of their salaries and wages through documentation of an established work schedule that meets the standards under section (3). An acceptable work schedule may be in a style and format already used by an LEA. (3) Employee schedules must: a. Indicate the specific activity or cost objective that the employee worked on for each segment of the employee’s schedule; b. Account for the total hours for which each employee is compensated during the period reflected on the employee’s schedule; and c. Be certified at least semiannually and signed by the employee and a supervisory official having firsthand knowledge of the work performed by the employee. Good internal control requires adequate supporting documentation to ensure that expenditures are correct and allowable. Condition: The Agency lacked documentation to support 3 of 11 aid payments tested. Repeat Finding: No Questioned Costs: $34,983 known Statistical Sample: No Context: We randomly selected 11 reimbursement payments to subrecipients for testing. We noted the following: • One reimbursement to a community college included salaries and benefits for two employees for $23,583. Documentation to support the salaries and benefits was inadequate. The Agency provided time and effort certifications, stating that the employees worked 50% on the Career and Technical Federal program and 50% on a different program. However, no other documentation – such as an employee work schedule – was provided to support that this distribution was correct. The $23,583 paid for salaries and benefits are considered questioned costs. • One reimbursement was to an Educational Service Unit (ESU). The ESU made payments to schools in order for the schools to reimburse its teachers for their costs for attending a conference and also paying the teachers a stipend for attending the conference. The payments to teachers were to include $120/night for hotels, $300 for registration fees, $265 for mileage, and $125/day as a stipend for each day the teachers attended the conference. However, documentation was not provided to support that the reimbursements/stipends went to all the teachers, or if the school should have kept the reimbursement if it paid for the hotels and registration fees. Additionally, documentation was lacking to support that all the teachers actually stayed at the hotel or that the school paid for the hotel. Lastly, documentation was not provided to support that the stipend amount was reasonable and approved by appropriate personnel. This resulted in questioned costs of $11,192. • One reimbursement to a school included payments to teachers for attending a conference. One hundred and sixty dollars was paid to 13 teachers based on the U.S. General Services Administration per diem rates for meals and incidental expenses. However, per the conference agenda, lunch was provided for one of the days, so the amount paid per teacher should have been reduced to $144, but it was not. This resulted in questioned costs of $208. Federal payment errors for the sample tested were $34,983. The total sample tested was $1,910,166, and aid payments for the fiscal year totaled $7,485,494. Based on the sample tested, the dollar error rate for the sample was 1.83% ($34,983/$1,910,166), which estimates the potential dollars at risk for fiscal year 2024 to be $136,985 (dollar error rate multiplied by population). Cause: Lack of procedures to ensure all costs were adequately documented. Effect: Without adequate supporting documentation, there is an increased risk that Federal awards could be used for unallowable costs. Recommendation: We recommend the Agency improve procedures to ensure that payments are supported by adequate documentation. Management Response: The Nebraska Department of Education’s Office of Career, Technical, and Adult Education provided emails which detailed the purpose for Sharri’s work within the CTE program. The college provided the time and effort certification for the time period in question for the employee but the documentation from the college did not provide the actual work performed information. The Nebraska Department of Education’s Office of Career, Technical, and Adult Education was able to provide most of this documentation related to the reimbursement for teachers attending the conference but was unable to collect the documentation from some of the schools within the ESU 4 Perkins consortium. ESU 4 was not able to provide a stipend policy, though they were able to provide meeting notes where the stipend policy was outlined ahead of time.
Program: AL 84.126 – Rehabilitation Services Vocational Rehabilitation Grants to States – Reporting Grant Number & Year: H126A220039, FFY 2022; H126A240039, FFY 2024 Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR § 3474.1 (January 1, 2024), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). 2 CFR § 200.302 (January 1, 2024) states, in part, the following: (a) Each State must expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the State’s own funds. In addition, the state’s and the other non-Federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. EnterpriseOne is the official accounting system for the State of Nebraska, and all expenditures are generated from it. 34 CFR § 361.60(a)(1) (July 1, 2023) states the following: Except as provided in paragraph (a)(2) of this section, the Federal share for expenditures made by the State under the vocational rehabilitation services portion of the Unified or Combined State Plan, including expenditures for the provision of vocational rehabilitation services and the administration of the vocational rehabilitation services portion of the Unified or Combined State Plan, is 78.7 percent. Per 34 CFR § 76.707 (July 1, 2023), personal services performed by an employee of the State are obligated when the services are performed. Good internal control and sound accounting practices require adequate policies and procedures to ensure that information included in Federal reports is correct and accurate. Condition: The Agency lacked procedures to ensure that the unliquidated obligations, indirect costs, and administrative costs were reported accurately on the RSA-17 reports. Repeat Finding: No Questioned Costs: None Statistical Sample: No Context: We tested two RSA-17 reports submitted by the Agency. We noted the following: Grant H126A240039, Quarter Ended March 31, 2024 • The Federal and Non-Federal Share of Unliquidated Obligations reported on lines 18 and 29 were $2,905,268 and $786,305, respectively. The amounts reported were not correct due to the following: o The Agency included the unliquidated indirect costs for the month of March 2024 twice, resulting in the amount reported being overstated by $43,901 for the Federal Share and $11,882 for the Non-Federal Share. o The Agency did not include the payroll costs for time worked from March 11, 2024, to March 24, 2024. Additionally, the Agency erroneously included the payroll costs for time worked from April 1, 2024, to April 7, 2024. This resulted in the amount reported being overstated by $164,849 for the Federal Share and $44,616 for the Non-Federal Share. o Lastly, the Agency did not provide adequate documentation to support the unliquidated amounts for contracts. Per the Agency, the amount was taken from proposals submitted by possible contractors; however, the Agency did not provide documentation to support those written commitments existed as of March 31, 2024. • The amount reported on line 36g for Federal Share of Indirect Costs was not correct. The Agency reported that the Federal share of indirect costs was $484,844. However, this was 100% of the total indirect costs recorded. Only $381,573 should have been reported as the Federal share based on the 78.7% matching rate. Therefore, the amount reported was overstated by $103,271. Grant H126A220039, Quarter Ended September 30, 2023 • Line 37 Federal and Non-Federal Administrative Expenses was not adequately supported. The Agency reported $1,606,807 of Federal and non-Federal administrative costs. The Agency did not set up business units or other accounts in the State’s financial accounting system (EnterpriseOne) sufficiently to identify the administrative costs recorded for the vocational rehabilitation program. To determine the amount of administrative costs to report, the Agency ran a general ledger of all expenditures and manually identified the administrative costs based off the payee description and prior knowledge of transactions. However, transactions appear to have been excluded that should have been included as administrative expenses. Therefore, we were unable to verify that the amount reported was correct. Cause: Inadequate review and documentation of amounts reported. Additionally, the Agency stated that there was an error in the quarter ended March 31, 2024, report that prevented the Agency from inputting the correct value for the Federal share of indirect costs. However, no documentation was provided to support this was the case. Effect: Increased risk for errors and noncompliance with Federal requirements. Recommendation: We recommend the Agency update its procedures to ensure that obligations and expenditures are being properly reported in accordance with reporting requirements. Management Response: Federal and Non-Federal Share of Unliquidated Obligations - The incorrect amounts reported for unliquidated cost March indirect costs, payroll, and contracts were due to an error when completing the report. An additional review from NDE Budget and Grant Management staff of unliquidated obligations will be included in future reports to ensure accuracy. Federal and Non-Federal Administrative Expenses was not adequately supported - The agency does set up business units or other accounts (subledgers, subsidiaries) in the State’s financial accounting system (EnterpriseOne) to sufficiently identify administrative costs. Sub ledgers ERSO, ERTRANSI and subsidiaries 110, TRYLN, SRC, TRANSI were specifically set up separate administrative costs. These will be used to identify administrative costs for future reports. APA Response: The subledgers and subsidiaries identified in the management’s response were not used to identify administrative expenses when the Agency completed the RSA-17 report. The administrative expenses reported did not agree to the amount recorded in EnterpriseOne to these subledgers and subsidiaries for the grant.
Program: AL 84.126 – Rehabilitation Services Vocational Rehabilitation Grants to States – Period of Performance Grant Number & Year: H126A220039, FFY 2022 Federal Grantor Agency: U.S. Department of Education Criteria: Per 34 CFR § 76.707 (July 1, 2023), work performed by a contractor is obligated on the date the State “makes a binding written commitment to obtain the services.” Per 2 CFR § 3474.1 (January 1, 2024), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). Per 2 CFR § 200.403(h) (January 1, 2024), costs “must be incurred during the approved budget period.” The Rehabilitation Service Administration Period of Performance for Formula Grant Awards FAQs (published March 21, 2017) states the following: 8. Can the total cost of a contract be obligated to a grant award if some of the contract services will be performed after the period of performance ends? Yes. If a contract is entered into during a period of performance, but some of the services will be performed after the period of performance ends (in other words, some services would be performed after the FFY of appropriation and the carryover year, if applicable, has ended), the contract would still constitute a valid obligation, as established by 34 CFR 76.707, for purposes of the period of performance in which it was incurred. Good internal control and sound accounting procedures require adequate policies and procedures to ensure that only those expenditures obligated within the period of performance are charged to the grant. Condition: One of 25 expenditures tested was not obligated within the period of performance. Repeat Finding: No Questioned Costs: $2,586 known Statistical Sample: No Context: The Agency paid $2,586 to a provider for job search and placement services that occurred between August 15, 2023, to November 22, 2023. The Agency charged the payment to grant H126A220039, and costs were to be obligated by September 30, 2023, for this grant. The State did not make any written commitment to obtain or pay for these services until October 17, 2023, when the Agency signed an authorization form for said services. As the written commitment was not issued until after September 30, 2023, the payment was not allowed to be charged to the grant. Total questioned costs from the random sample were $2,586. The total sample tested was $39,530, and the total sample population was $5,495,235. Based on the sample tested, the dollar error rate for the sample was 6.54% ($2,586/$39,530), which estimates the potential dollars at risk for fiscal year 2024 to be $359,388 (dollar error rate multiplied by the population). Cause: The Agency lacked proper understanding of when costs should be considered obligated. The Agency reported that it completed the Plan for Job Development on September 3, 2023, and considered it obligated at that time. However, the authorization for the plan was not signed until October 17, 2023. Effect: Without adequate procedures, there is increased risk that the Agency will improperly charge expenditures to the grant outside of its period of performance, resulting in noncompliance. Recommendation: We recommend the Agency strengthen procedures to ensure that expenditures are charged to its grants within the period of performance. Management Response: The agency understands costs are considered obligated at the time of authorization. The case management system is programmed to assign the cost to the grant based on the start date of the service at the time of the obligation (authorization). The programming did not account for a situation when the obligation is created in a different federal fiscal year then the start date of the service. The obligation in question was made on 10/17/23 (FFY23) for a service that started on 8/15/23 (FFY22). The obligation is allowed to be charged to grant H126A220039, but should have been reported as an obligation to the carryover year (FY23) business unit for grant H126A220039, rather than an obligation to the year of appropriation (FFY22) business unit for grant H126A220039. The obligation cannot be charged to the H126A2300390 (FFY23) grant due to service being provided in FFY22. APA Response: Grant H126A220039 had a period of performance end date of September 30, 2023. Any obligation made after this date, including the obligation made on October 17, 2023, would not be allowable to charge to this grant.
Finding Number: 2024-003 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2024 Federal Agency: US Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. As documented by the Ohio Department of Education and Workforce Office of Federal and State Grants Management, the Ohio Department of Education and Workforce requires school districts to submit the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant Final Expenditure Report (FER) by December 2, 2024. School Districts must complete the FER at the end of each fiscal year for the prior state fiscal year’s Elementary and Secondary School Emergency Relief expenditures. All expenses reported on the FER should be paid. There should be no encumbered amounts. The Treasurer and Superintendent approved and submitted the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant on September 27, 2024. However, the expenditures in this submission included the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grants expenditures as well as the 2024 grants. Therefore, the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant submitted to the Ohio Department of Education and Workforce were overstated by $3,670 and $37,263, respectively. The School District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
Finding Number: 2024-003 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2024 Federal Agency: US Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. As documented by the Ohio Department of Education and Workforce Office of Federal and State Grants Management, the Ohio Department of Education and Workforce requires school districts to submit the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant Final Expenditure Report (FER) by December 2, 2024. School Districts must complete the FER at the end of each fiscal year for the prior state fiscal year’s Elementary and Secondary School Emergency Relief expenditures. All expenses reported on the FER should be paid. There should be no encumbered amounts. The Treasurer and Superintendent approved and submitted the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant on September 27, 2024. However, the expenditures in this submission included the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grants expenditures as well as the 2024 grants. Therefore, the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant submitted to the Ohio Department of Education and Workforce were overstated by $3,670 and $37,263, respectively. The School District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
Finding Number: 2024-003 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2024 Federal Agency: US Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. As documented by the Ohio Department of Education and Workforce Office of Federal and State Grants Management, the Ohio Department of Education and Workforce requires school districts to submit the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant Final Expenditure Report (FER) by December 2, 2024. School Districts must complete the FER at the end of each fiscal year for the prior state fiscal year’s Elementary and Secondary School Emergency Relief expenditures. All expenses reported on the FER should be paid. There should be no encumbered amounts. The Treasurer and Superintendent approved and submitted the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant on September 27, 2024. However, the expenditures in this submission included the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grants expenditures as well as the 2024 grants. Therefore, the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant submitted to the Ohio Department of Education and Workforce were overstated by $3,670 and $37,263, respectively. The School District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
Finding Number: 2024-003 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2024 Federal Agency: US Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. As documented by the Ohio Department of Education and Workforce Office of Federal and State Grants Management, the Ohio Department of Education and Workforce requires school districts to submit the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant Final Expenditure Report (FER) by December 2, 2024. School Districts must complete the FER at the end of each fiscal year for the prior state fiscal year’s Elementary and Secondary School Emergency Relief expenditures. All expenses reported on the FER should be paid. There should be no encumbered amounts. The Treasurer and Superintendent approved and submitted the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant on September 27, 2024. However, the expenditures in this submission included the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grants expenditures as well as the 2024 grants. Therefore, the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant submitted to the Ohio Department of Education and Workforce were overstated by $3,670 and $37,263, respectively. The School District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
Finding Number: 2024-003 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2024 Federal Agency: US Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. As documented by the Ohio Department of Education and Workforce Office of Federal and State Grants Management, the Ohio Department of Education and Workforce requires school districts to submit the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant Final Expenditure Report (FER) by December 2, 2024. School Districts must complete the FER at the end of each fiscal year for the prior state fiscal year’s Elementary and Secondary School Emergency Relief expenditures. All expenses reported on the FER should be paid. There should be no encumbered amounts. The Treasurer and Superintendent approved and submitted the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant on September 27, 2024. However, the expenditures in this submission included the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grants expenditures as well as the 2024 grants. Therefore, the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant submitted to the Ohio Department of Education and Workforce were overstated by $3,670 and $37,263, respectively. The School District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
Finding Number: 2024-003 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2024 Federal Agency: US Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. As documented by the Ohio Department of Education and Workforce Office of Federal and State Grants Management, the Ohio Department of Education and Workforce requires school districts to submit the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant Final Expenditure Report (FER) by December 2, 2024. School Districts must complete the FER at the end of each fiscal year for the prior state fiscal year’s Elementary and Secondary School Emergency Relief expenditures. All expenses reported on the FER should be paid. There should be no encumbered amounts. The Treasurer and Superintendent approved and submitted the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant on September 27, 2024. However, the expenditures in this submission included the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grants expenditures as well as the 2024 grants. Therefore, the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2024 grant and the American Rescue Plan Elementary and Secondary School Emergency Relief 2024- Reaching Every Student grant submitted to the Ohio Department of Education and Workforce were overstated by $3,670 and $37,263, respectively. The School District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
Program: Various, including AL 84.027 – Special Education Grants to States; AL 84.173 – COVID-19 Special Education Preschool Grants; AL 84.425D – COVID-19 Education Stabilization Fund – Elementary and Secondary School Emergency Relief Fund (ESSER I and ESSER II); AL 84.425U – COVID-19 Education Stabilization Fund – American Rescue Plan – Elementary and Secondary School Emergency Relief Fund (ARP ESSER) – Subrecipient Monitoring Grant Number & Year: Various, including H027A210079, FFY 2022; H173X210077, FFY 2022; S425D200048, grant period ending 9/30/2022; S425D210048, grant period ending 9/30/2023; S425U210048, grant period ending 9/30/2024. Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR § 3474.1 (January 1, 2023), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). Per 2 CFR § 200.403 (January 1, 2023), allowable costs must be necessary, reasonable, and adequately documented. 2 CFR § 200.332 (January 1, 2023) states, in relevant part, the following: All pass-through entities must: * * * * (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. * * * * (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward[.] * * * * (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. 2 CFR § 200.521 (January 1, 2023) states, in relevant part, the following: (c) Pass-through entity. As provided in § 200.332(d), the pass-through entity must be responsible for issuing a management decision for audit findings that relate to Federal awards it makes to subrecipients. (d) Time requirements. The Federal awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. Good internal control requires procedures to ensure that subrecipients are using grant funds for allowable purposes. Good internal control also requires procedures to ensure that subrecipient Single Audit reports are being reviewed, and management decision letters are being issued in a timely manner to ensure that corrective action is being implemented. Condition: For 3 of 27 subrecipients tested that received Federal funds from the Special Education Cluster, the Agency did not perform adequate subrecipient monitoring to ensure that funds were used for allowable purposes. For seven subrecipients tested that received Federal funds from the Education Stabilization Fund and/or Special Education Cluster, the Agency did not issue a management decision letter within the time requirement for five subrecipients and did not issue a management decision letter for two subrecipients. The Agency also failed to track and review the Single Audit report for one subrecipient. Repeat Finding: No Questioned Costs: Unknown Statistical Sample: No Context: The Agency performs various subrecipient monitoring activities during the year to ensure that subrecipients are using funds for an allowable purpose. These activities include reviewing a sample of expenditures from all reimbursement requests, tracking subrecipient audit requirements and reviewing Single Audit reports, and performing fiscal monitoring on a three-year basis. During review of reimbursement requests, the Agency does not perform procedures to ensure that salary and benefits allocated to the Special Education (SPED) grants are adequately supported by underlying documentation for a majority of its subrecipients. Rather the Agency relies on the fiscal monitoring to test that payroll is being properly allocated to grants, and the subrecipients have procedures in place to comply with Uniform Guidance Requirements. During testing of 27 subrecipients that received SPED grants, we noted the following for three subrecipients: • For the first subrecipient, the Agency had never completed a fiscal monitoring review. The Agency indicated that it was currently conducting fiscal monitoring of the school, but the subrecipient had been slow to provide documentation, resulting in delays. • The second subrecipient also did not have a fiscal monitoring review. At the time of the reimbursement, moreover, the Agency did not review any underlying documentation to support the costs allocated to the grant. The Agency stated that it relied on the entity’s annual audit to ensure costs were allocated properly; however, the subrecipient had not had a recent Single Audit in which the Special Education Cluster was a major program. • The third subrecipient had a fiscal monitoring review of payroll costs, but there was no documentation to show that the Agency had reviewed other purchased services at the time of reimbursement or during the fiscal monitoring. During review of the Agency’s procedures for reviewing subrecipient Single Audits, we noted the following: • For two subrecipients tested, their Single Audits noted significant deficiencies and material weaknesses, including one instance of questioned costs totaling $105,273; however, the Agency did not issue a management decision letter on the findings or provide documentation of any follow-up performed. • For five subrecipients tested, the management decision letter was issued eight to nine months after the audit was made available on the Federal Audit Clearinghouse (FAC). • One subrecipient was not being tracked by the Agency. This subrecipient had received $939,358 in Federal funds from the Agency. After the APA pointed this out, the Agency obtained a copy of the subrecipient’s Single Audit report, which noted no findings. Cause: Inadequate subrecipient monitoring procedures. The Agency stated it had other priorities during the year that delayed its review of the subrecipients’ Single Audit reports. Effect: Without adequate procedures, there is increased risk of noncompliance with Federal regulations, audit findings of subrecipients not being corrected, and an increased risk of loss or misuse of funds. Recommendation: We recommend the Agency review its procedures for reimbursements and fiscal monitoring to ensure subrecipients are operating in compliance with Federal requirements. We also recommend the Agency improve procedures to ensure that all subrecipients are being tracked for Single Audit requirements, and management decisions are issued in response to all findings in a timely manner. Management Response: First SPED subrecipient – The first recipient’s fiscal monitoring review is part of the current annual group of recipients being monitored; set to close June 30, 2024. Second SPED subrecipient – As part of the FY2020 federal Single Audit testing conducted by KPMG, determined the after-the-fact verification as a method to certify that the payment received on a project is reasonable in relation to the amount of work performed. Third SPED subrecipient – Purchased services and supplies were reviewed during fiscal monitoring, but the documentation was in paper form, not electronic, and was not initially provided to the auditors when requested. It was provided on March 4, 2024, when located. Single Audits – Due to extensive time commitment to State audit facilitation and Education Stabilization Fund Annual Performance Reporting, some management decision letters were not issued or were issued late. The NDE staff member performing the annual audit reviews was not aware of an additional subrecipient that needed reviewed. APA Response: The Special Education Cluster was not a major program for the second subrecipient in FY2020. For the third subrecipient, we originally requested the Agency’s fiscal monitoring documentation on December 21, 2023. Neb. Rev. Stat. § 84-305(2) (Cum. Supp. 2022) requires compliance with such a request to occur within “three business days after actual receipt of the request.” The only exceptions to that three-day response requirement are if there is “a legal basis for refusal to comply with the request” or “the entire request cannot with reasonable good faith efforts be fulfilled within three business days after actual receipt of the request due to the significant difficulty or the extensiveness of the request.” In either instance, § 84-305(2) requires the recipient of the request to take specific action in claiming the exception. The Agency failed to do so, clearly violating § 84-305(2). In no case not involving a legal basis for noncompliance, moreover, may the required compliance “exceed three calendar weeks after actual receipt of such request by any public entity.” Nevertheless, the additional documentation was not provided until over 11 weeks after being requested, which is another clear violation of § 84-305(2).
Program: Various, including AL 84.027 – Special Education Grants to States; AL 84.173 – COVID-19 Special Education Preschool Grants; AL 84.425D – COVID-19 Education Stabilization Fund – Elementary and Secondary School Emergency Relief Fund (ESSER I and ESSER II); AL 84.425U – COVID-19 Education Stabilization Fund – American Rescue Plan – Elementary and Secondary School Emergency Relief Fund (ARP ESSER) – Subrecipient Monitoring Grant Number & Year: Various, including H027A210079, FFY 2022; H173X210077, FFY 2022; S425D200048, grant period ending 9/30/2022; S425D210048, grant period ending 9/30/2023; S425U210048, grant period ending 9/30/2024. Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR § 3474.1 (January 1, 2023), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). Per 2 CFR § 200.403 (January 1, 2023), allowable costs must be necessary, reasonable, and adequately documented. 2 CFR § 200.332 (January 1, 2023) states, in relevant part, the following: All pass-through entities must: * * * * (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. * * * * (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward[.] * * * * (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. 2 CFR § 200.521 (January 1, 2023) states, in relevant part, the following: (c) Pass-through entity. As provided in § 200.332(d), the pass-through entity must be responsible for issuing a management decision for audit findings that relate to Federal awards it makes to subrecipients. (d) Time requirements. The Federal awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. Good internal control requires procedures to ensure that subrecipients are using grant funds for allowable purposes. Good internal control also requires procedures to ensure that subrecipient Single Audit reports are being reviewed, and management decision letters are being issued in a timely manner to ensure that corrective action is being implemented. Condition: For 3 of 27 subrecipients tested that received Federal funds from the Special Education Cluster, the Agency did not perform adequate subrecipient monitoring to ensure that funds were used for allowable purposes. For seven subrecipients tested that received Federal funds from the Education Stabilization Fund and/or Special Education Cluster, the Agency did not issue a management decision letter within the time requirement for five subrecipients and did not issue a management decision letter for two subrecipients. The Agency also failed to track and review the Single Audit report for one subrecipient. Repeat Finding: No Questioned Costs: Unknown Statistical Sample: No Context: The Agency performs various subrecipient monitoring activities during the year to ensure that subrecipients are using funds for an allowable purpose. These activities include reviewing a sample of expenditures from all reimbursement requests, tracking subrecipient audit requirements and reviewing Single Audit reports, and performing fiscal monitoring on a three-year basis. During review of reimbursement requests, the Agency does not perform procedures to ensure that salary and benefits allocated to the Special Education (SPED) grants are adequately supported by underlying documentation for a majority of its subrecipients. Rather the Agency relies on the fiscal monitoring to test that payroll is being properly allocated to grants, and the subrecipients have procedures in place to comply with Uniform Guidance Requirements. During testing of 27 subrecipients that received SPED grants, we noted the following for three subrecipients: • For the first subrecipient, the Agency had never completed a fiscal monitoring review. The Agency indicated that it was currently conducting fiscal monitoring of the school, but the subrecipient had been slow to provide documentation, resulting in delays. • The second subrecipient also did not have a fiscal monitoring review. At the time of the reimbursement, moreover, the Agency did not review any underlying documentation to support the costs allocated to the grant. The Agency stated that it relied on the entity’s annual audit to ensure costs were allocated properly; however, the subrecipient had not had a recent Single Audit in which the Special Education Cluster was a major program. • The third subrecipient had a fiscal monitoring review of payroll costs, but there was no documentation to show that the Agency had reviewed other purchased services at the time of reimbursement or during the fiscal monitoring. During review of the Agency’s procedures for reviewing subrecipient Single Audits, we noted the following: • For two subrecipients tested, their Single Audits noted significant deficiencies and material weaknesses, including one instance of questioned costs totaling $105,273; however, the Agency did not issue a management decision letter on the findings or provide documentation of any follow-up performed. • For five subrecipients tested, the management decision letter was issued eight to nine months after the audit was made available on the Federal Audit Clearinghouse (FAC). • One subrecipient was not being tracked by the Agency. This subrecipient had received $939,358 in Federal funds from the Agency. After the APA pointed this out, the Agency obtained a copy of the subrecipient’s Single Audit report, which noted no findings. Cause: Inadequate subrecipient monitoring procedures. The Agency stated it had other priorities during the year that delayed its review of the subrecipients’ Single Audit reports. Effect: Without adequate procedures, there is increased risk of noncompliance with Federal regulations, audit findings of subrecipients not being corrected, and an increased risk of loss or misuse of funds. Recommendation: We recommend the Agency review its procedures for reimbursements and fiscal monitoring to ensure subrecipients are operating in compliance with Federal requirements. We also recommend the Agency improve procedures to ensure that all subrecipients are being tracked for Single Audit requirements, and management decisions are issued in response to all findings in a timely manner. Management Response: First SPED subrecipient – The first recipient’s fiscal monitoring review is part of the current annual group of recipients being monitored; set to close June 30, 2024. Second SPED subrecipient – As part of the FY2020 federal Single Audit testing conducted by KPMG, determined the after-the-fact verification as a method to certify that the payment received on a project is reasonable in relation to the amount of work performed. Third SPED subrecipient – Purchased services and supplies were reviewed during fiscal monitoring, but the documentation was in paper form, not electronic, and was not initially provided to the auditors when requested. It was provided on March 4, 2024, when located. Single Audits – Due to extensive time commitment to State audit facilitation and Education Stabilization Fund Annual Performance Reporting, some management decision letters were not issued or were issued late. The NDE staff member performing the annual audit reviews was not aware of an additional subrecipient that needed reviewed. APA Response: The Special Education Cluster was not a major program for the second subrecipient in FY2020. For the third subrecipient, we originally requested the Agency’s fiscal monitoring documentation on December 21, 2023. Neb. Rev. Stat. § 84-305(2) (Cum. Supp. 2022) requires compliance with such a request to occur within “three business days after actual receipt of the request.” The only exceptions to that three-day response requirement are if there is “a legal basis for refusal to comply with the request” or “the entire request cannot with reasonable good faith efforts be fulfilled within three business days after actual receipt of the request due to the significant difficulty or the extensiveness of the request.” In either instance, § 84-305(2) requires the recipient of the request to take specific action in claiming the exception. The Agency failed to do so, clearly violating § 84-305(2). In no case not involving a legal basis for noncompliance, moreover, may the required compliance “exceed three calendar weeks after actual receipt of such request by any public entity.” Nevertheless, the additional documentation was not provided until over 11 weeks after being requested, which is another clear violation of § 84-305(2).
Program: AL 84.287 – Twenty-First Century Community Learning Centers – Subrecipient Monitoring Grant Number & Year: S287C210027, FFY 2022 Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR § 3474.1 (January 1, 2023), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). 2 CFR § 200.332 (January 1, 2023) states, in relevant part, the following: All pass-through entities must: * * * * (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. 2 CFR § 200.508 (January 1, 2023) states, in relevant part, the following: The auditee must: * * * * (d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by this part. Neb. Rev. Stat. § 84-305(2) (Cum. Supp. 2022) states, in relevant part, the following: Upon receipt of a written request by the Auditor of Public Accounts for access to any information or records, the public entity shall provide to the auditor as soon as is practicable and without delay, but not more than three business days after actual receipt of the request, either (a) the requested materials or (b)(i) if there is a legal basis for refusal to comply with the request, a written denial of the request together with the information specified in subsection (1) of this section or (ii) if the entire request cannot with reasonable good faith efforts be fulfilled within three business days after actual receipt of the request due to the significant difficulty or the extensiveness of the request, a written explanation, including the earliest practicable date for fulfilling the request, and an opportunity for the auditor to modify or prioritize the items within the request. No delay due to the significant difficulty or the extensiveness of any request for access to information or records shall exceed three calendar weeks after actual receipt of such request by any public entity. (Emphasis added.) A proper system of internal control includes procedures to ensure the Department’s fiscal monitoring polices are followed. Good internal control also requires procedures to ensure audit information is provided promptly in accordance with State and Federal requirements. Condition: The Agency failed to perform fiscal monitoring of one subrecipient tested for the Twenty-First Century Community Learning Centers grant. Contrary to § 84-305(2), moreover, the Agency failed to respond promptly to requests for information. Repeat Finding: No Questioned Costs: None Statistical Sample: No Context: The Agency performed a review of a reimbursement request for $183,825, where staff compared the amount claimed to the school-provided accounting records and payroll reports with employee names. The Agency’s policy then requires further fiscal monitoring on at least a three-year rotational basis for all school districts. As part of this process, a more detailed review of time and effort documentation is supposed to be completed. According to Agency staff, fiscal monitoring was scheduled for October 2022; however, school district staff stated that the timing would not work for them. The Agency began its review in December 2022, but the process had yet to be completed – more than a year later – due to a lack of responsiveness from the school district. Fiscal monitoring of the school district was last performed in fiscal year 2020. Additionally, the APA asked the Agency on January 11, 2024, for documentation to support the payroll expenses on the reimbursement request. On January 12, 2024, the Agency presented the APA with the documentation from the school district; however, this was the same documentation provided previously to the Agency at the time of reimbursement. This documentation was insufficient to support the payroll expenses questioned. On March 1, 2024, seven weeks after the APA’s request, the Agency produced the additional information to support the payroll expenses. Cause: Inadequate subrecipient monitoring procedures. Effect: Without adequate monitoring procedures, there is an increased risk for the payment of unallowable Federal expenses. Recommendation: We recommend the Agency strengthen its procedures for ensuring that fiscal monitoring is completed in accordance with the Agency’s policies. We further recommend the Agency implement procedures to ensure compliance with both 2 CFR § 200.508 and § 84-305(2). Management Response: The Grants Compliance Section is the Agency’s internal control function performing the requirements within 2 CFR 200.332, applying risk assessment to determine the annual fiscal monitoring base cadence and sequential sampling; non-probability sampling ensuring all recipients are subject to fiscal monitoring efforts in a three-year cycle at a minimum. As education subrecipients have received a significant influx of subawards to mitigate post-COVID supports for Nebraska education with limited staff capacity, the Department has remained mindful of these conditions and completed fiscal monitoring activities and issued an exit letter on September 5, 2023. APA Response: This finding was included as Comment 4 in the Annual Comprehensive Financial Report (ACFR) management letter dated December 13, 2023. The Agency responded, in part, “Fiscal monitoring of Lexington Public Schools was being performed in 2023 but was not completed as of the time of the ACFR audit.” When the Single Audit team requested the payroll documentation, the Agency did not inform the APA that monitoring was completed until March 5, 2024, which is well past the time requirements set out in § 84-305(2). Regardless, the fiscal monitoring was not completed within three years.
Program: Various, including AL 84.027 – Special Education Grants to States; AL 84.173 – COVID-19 Special Education Preschool Grants; AL 84.425D – COVID-19 Education Stabilization Fund – Elementary and Secondary School Emergency Relief Fund (ESSER I and ESSER II); AL 84.425U – COVID-19 Education Stabilization Fund – American Rescue Plan – Elementary and Secondary School Emergency Relief Fund (ARP ESSER) – Subrecipient Monitoring Grant Number & Year: Various, including H027A210079, FFY 2022; H173X210077, FFY 2022; S425D200048, grant period ending 9/30/2022; S425D210048, grant period ending 9/30/2023; S425U210048, grant period ending 9/30/2024. Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR § 3474.1 (January 1, 2023), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). Per 2 CFR § 200.403 (January 1, 2023), allowable costs must be necessary, reasonable, and adequately documented. 2 CFR § 200.332 (January 1, 2023) states, in relevant part, the following: All pass-through entities must: * * * * (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. * * * * (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward[.] * * * * (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. 2 CFR § 200.521 (January 1, 2023) states, in relevant part, the following: (c) Pass-through entity. As provided in § 200.332(d), the pass-through entity must be responsible for issuing a management decision for audit findings that relate to Federal awards it makes to subrecipients. (d) Time requirements. The Federal awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. Good internal control requires procedures to ensure that subrecipients are using grant funds for allowable purposes. Good internal control also requires procedures to ensure that subrecipient Single Audit reports are being reviewed, and management decision letters are being issued in a timely manner to ensure that corrective action is being implemented. Condition: For 3 of 27 subrecipients tested that received Federal funds from the Special Education Cluster, the Agency did not perform adequate subrecipient monitoring to ensure that funds were used for allowable purposes. For seven subrecipients tested that received Federal funds from the Education Stabilization Fund and/or Special Education Cluster, the Agency did not issue a management decision letter within the time requirement for five subrecipients and did not issue a management decision letter for two subrecipients. The Agency also failed to track and review the Single Audit report for one subrecipient. Repeat Finding: No Questioned Costs: Unknown Statistical Sample: No Context: The Agency performs various subrecipient monitoring activities during the year to ensure that subrecipients are using funds for an allowable purpose. These activities include reviewing a sample of expenditures from all reimbursement requests, tracking subrecipient audit requirements and reviewing Single Audit reports, and performing fiscal monitoring on a three-year basis. During review of reimbursement requests, the Agency does not perform procedures to ensure that salary and benefits allocated to the Special Education (SPED) grants are adequately supported by underlying documentation for a majority of its subrecipients. Rather the Agency relies on the fiscal monitoring to test that payroll is being properly allocated to grants, and the subrecipients have procedures in place to comply with Uniform Guidance Requirements. During testing of 27 subrecipients that received SPED grants, we noted the following for three subrecipients: • For the first subrecipient, the Agency had never completed a fiscal monitoring review. The Agency indicated that it was currently conducting fiscal monitoring of the school, but the subrecipient had been slow to provide documentation, resulting in delays. • The second subrecipient also did not have a fiscal monitoring review. At the time of the reimbursement, moreover, the Agency did not review any underlying documentation to support the costs allocated to the grant. The Agency stated that it relied on the entity’s annual audit to ensure costs were allocated properly; however, the subrecipient had not had a recent Single Audit in which the Special Education Cluster was a major program. • The third subrecipient had a fiscal monitoring review of payroll costs, but there was no documentation to show that the Agency had reviewed other purchased services at the time of reimbursement or during the fiscal monitoring. During review of the Agency’s procedures for reviewing subrecipient Single Audits, we noted the following: • For two subrecipients tested, their Single Audits noted significant deficiencies and material weaknesses, including one instance of questioned costs totaling $105,273; however, the Agency did not issue a management decision letter on the findings or provide documentation of any follow-up performed. • For five subrecipients tested, the management decision letter was issued eight to nine months after the audit was made available on the Federal Audit Clearinghouse (FAC). • One subrecipient was not being tracked by the Agency. This subrecipient had received $939,358 in Federal funds from the Agency. After the APA pointed this out, the Agency obtained a copy of the subrecipient’s Single Audit report, which noted no findings. Cause: Inadequate subrecipient monitoring procedures. The Agency stated it had other priorities during the year that delayed its review of the subrecipients’ Single Audit reports. Effect: Without adequate procedures, there is increased risk of noncompliance with Federal regulations, audit findings of subrecipients not being corrected, and an increased risk of loss or misuse of funds. Recommendation: We recommend the Agency review its procedures for reimbursements and fiscal monitoring to ensure subrecipients are operating in compliance with Federal requirements. We also recommend the Agency improve procedures to ensure that all subrecipients are being tracked for Single Audit requirements, and management decisions are issued in response to all findings in a timely manner. Management Response: First SPED subrecipient – The first recipient’s fiscal monitoring review is part of the current annual group of recipients being monitored; set to close June 30, 2024. Second SPED subrecipient – As part of the FY2020 federal Single Audit testing conducted by KPMG, determined the after-the-fact verification as a method to certify that the payment received on a project is reasonable in relation to the amount of work performed. Third SPED subrecipient – Purchased services and supplies were reviewed during fiscal monitoring, but the documentation was in paper form, not electronic, and was not initially provided to the auditors when requested. It was provided on March 4, 2024, when located. Single Audits – Due to extensive time commitment to State audit facilitation and Education Stabilization Fund Annual Performance Reporting, some management decision letters were not issued or were issued late. The NDE staff member performing the annual audit reviews was not aware of an additional subrecipient that needed reviewed. APA Response: The Special Education Cluster was not a major program for the second subrecipient in FY2020. For the third subrecipient, we originally requested the Agency’s fiscal monitoring documentation on December 21, 2023. Neb. Rev. Stat. § 84-305(2) (Cum. Supp. 2022) requires compliance with such a request to occur within “three business days after actual receipt of the request.” The only exceptions to that three-day response requirement are if there is “a legal basis for refusal to comply with the request” or “the entire request cannot with reasonable good faith efforts be fulfilled within three business days after actual receipt of the request due to the significant difficulty or the extensiveness of the request.” In either instance, § 84-305(2) requires the recipient of the request to take specific action in claiming the exception. The Agency failed to do so, clearly violating § 84-305(2). In no case not involving a legal basis for noncompliance, moreover, may the required compliance “exceed three calendar weeks after actual receipt of such request by any public entity.” Nevertheless, the additional documentation was not provided until over 11 weeks after being requested, which is another clear violation of § 84-305(2).
Program: Various, including AL 84.027 – Special Education Grants to States; AL 84.173 – COVID-19 Special Education Preschool Grants; AL 84.425D – COVID-19 Education Stabilization Fund – Elementary and Secondary School Emergency Relief Fund (ESSER I and ESSER II); AL 84.425U – COVID-19 Education Stabilization Fund – American Rescue Plan – Elementary and Secondary School Emergency Relief Fund (ARP ESSER) – Subrecipient Monitoring Grant Number & Year: Various, including H027A210079, FFY 2022; H173X210077, FFY 2022; S425D200048, grant period ending 9/30/2022; S425D210048, grant period ending 9/30/2023; S425U210048, grant period ending 9/30/2024. Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR § 3474.1 (January 1, 2023), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). Per 2 CFR § 200.403 (January 1, 2023), allowable costs must be necessary, reasonable, and adequately documented. 2 CFR § 200.332 (January 1, 2023) states, in relevant part, the following: All pass-through entities must: * * * * (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. * * * * (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward[.] * * * * (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. 2 CFR § 200.521 (January 1, 2023) states, in relevant part, the following: (c) Pass-through entity. As provided in § 200.332(d), the pass-through entity must be responsible for issuing a management decision for audit findings that relate to Federal awards it makes to subrecipients. (d) Time requirements. The Federal awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. Good internal control requires procedures to ensure that subrecipients are using grant funds for allowable purposes. Good internal control also requires procedures to ensure that subrecipient Single Audit reports are being reviewed, and management decision letters are being issued in a timely manner to ensure that corrective action is being implemented. Condition: For 3 of 27 subrecipients tested that received Federal funds from the Special Education Cluster, the Agency did not perform adequate subrecipient monitoring to ensure that funds were used for allowable purposes. For seven subrecipients tested that received Federal funds from the Education Stabilization Fund and/or Special Education Cluster, the Agency did not issue a management decision letter within the time requirement for five subrecipients and did not issue a management decision letter for two subrecipients. The Agency also failed to track and review the Single Audit report for one subrecipient. Repeat Finding: No Questioned Costs: Unknown Statistical Sample: No Context: The Agency performs various subrecipient monitoring activities during the year to ensure that subrecipients are using funds for an allowable purpose. These activities include reviewing a sample of expenditures from all reimbursement requests, tracking subrecipient audit requirements and reviewing Single Audit reports, and performing fiscal monitoring on a three-year basis. During review of reimbursement requests, the Agency does not perform procedures to ensure that salary and benefits allocated to the Special Education (SPED) grants are adequately supported by underlying documentation for a majority of its subrecipients. Rather the Agency relies on the fiscal monitoring to test that payroll is being properly allocated to grants, and the subrecipients have procedures in place to comply with Uniform Guidance Requirements. During testing of 27 subrecipients that received SPED grants, we noted the following for three subrecipients: • For the first subrecipient, the Agency had never completed a fiscal monitoring review. The Agency indicated that it was currently conducting fiscal monitoring of the school, but the subrecipient had been slow to provide documentation, resulting in delays. • The second subrecipient also did not have a fiscal monitoring review. At the time of the reimbursement, moreover, the Agency did not review any underlying documentation to support the costs allocated to the grant. The Agency stated that it relied on the entity’s annual audit to ensure costs were allocated properly; however, the subrecipient had not had a recent Single Audit in which the Special Education Cluster was a major program. • The third subrecipient had a fiscal monitoring review of payroll costs, but there was no documentation to show that the Agency had reviewed other purchased services at the time of reimbursement or during the fiscal monitoring. During review of the Agency’s procedures for reviewing subrecipient Single Audits, we noted the following: • For two subrecipients tested, their Single Audits noted significant deficiencies and material weaknesses, including one instance of questioned costs totaling $105,273; however, the Agency did not issue a management decision letter on the findings or provide documentation of any follow-up performed. • For five subrecipients tested, the management decision letter was issued eight to nine months after the audit was made available on the Federal Audit Clearinghouse (FAC). • One subrecipient was not being tracked by the Agency. This subrecipient had received $939,358 in Federal funds from the Agency. After the APA pointed this out, the Agency obtained a copy of the subrecipient’s Single Audit report, which noted no findings. Cause: Inadequate subrecipient monitoring procedures. The Agency stated it had other priorities during the year that delayed its review of the subrecipients’ Single Audit reports. Effect: Without adequate procedures, there is increased risk of noncompliance with Federal regulations, audit findings of subrecipients not being corrected, and an increased risk of loss or misuse of funds. Recommendation: We recommend the Agency review its procedures for reimbursements and fiscal monitoring to ensure subrecipients are operating in compliance with Federal requirements. We also recommend the Agency improve procedures to ensure that all subrecipients are being tracked for Single Audit requirements, and management decisions are issued in response to all findings in a timely manner. Management Response: First SPED subrecipient – The first recipient’s fiscal monitoring review is part of the current annual group of recipients being monitored; set to close June 30, 2024. Second SPED subrecipient – As part of the FY2020 federal Single Audit testing conducted by KPMG, determined the after-the-fact verification as a method to certify that the payment received on a project is reasonable in relation to the amount of work performed. Third SPED subrecipient – Purchased services and supplies were reviewed during fiscal monitoring, but the documentation was in paper form, not electronic, and was not initially provided to the auditors when requested. It was provided on March 4, 2024, when located. Single Audits – Due to extensive time commitment to State audit facilitation and Education Stabilization Fund Annual Performance Reporting, some management decision letters were not issued or were issued late. The NDE staff member performing the annual audit reviews was not aware of an additional subrecipient that needed reviewed. APA Response: The Special Education Cluster was not a major program for the second subrecipient in FY2020. For the third subrecipient, we originally requested the Agency’s fiscal monitoring documentation on December 21, 2023. Neb. Rev. Stat. § 84-305(2) (Cum. Supp. 2022) requires compliance with such a request to occur within “three business days after actual receipt of the request.” The only exceptions to that three-day response requirement are if there is “a legal basis for refusal to comply with the request” or “the entire request cannot with reasonable good faith efforts be fulfilled within three business days after actual receipt of the request due to the significant difficulty or the extensiveness of the request.” In either instance, § 84-305(2) requires the recipient of the request to take specific action in claiming the exception. The Agency failed to do so, clearly violating § 84-305(2). In no case not involving a legal basis for noncompliance, moreover, may the required compliance “exceed three calendar weeks after actual receipt of such request by any public entity.” Nevertheless, the additional documentation was not provided until over 11 weeks after being requested, which is another clear violation of § 84-305(2).
Program: Various, including AL 84.027 – Special Education Grants to States; AL 84.173 – COVID-19 Special Education Preschool Grants; AL 84.425D – COVID-19 Education Stabilization Fund – Elementary and Secondary School Emergency Relief Fund (ESSER I and ESSER II); AL 84.425U – COVID-19 Education Stabilization Fund – American Rescue Plan – Elementary and Secondary School Emergency Relief Fund (ARP ESSER) – Subrecipient Monitoring Grant Number & Year: Various, including H027A210079, FFY 2022; H173X210077, FFY 2022; S425D200048, grant period ending 9/30/2022; S425D210048, grant period ending 9/30/2023; S425U210048, grant period ending 9/30/2024. Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR § 3474.1 (January 1, 2023), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). Per 2 CFR § 200.403 (January 1, 2023), allowable costs must be necessary, reasonable, and adequately documented. 2 CFR § 200.332 (January 1, 2023) states, in relevant part, the following: All pass-through entities must: * * * * (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. * * * * (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward[.] * * * * (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. 2 CFR § 200.521 (January 1, 2023) states, in relevant part, the following: (c) Pass-through entity. As provided in § 200.332(d), the pass-through entity must be responsible for issuing a management decision for audit findings that relate to Federal awards it makes to subrecipients. (d) Time requirements. The Federal awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. Good internal control requires procedures to ensure that subrecipients are using grant funds for allowable purposes. Good internal control also requires procedures to ensure that subrecipient Single Audit reports are being reviewed, and management decision letters are being issued in a timely manner to ensure that corrective action is being implemented. Condition: For 3 of 27 subrecipients tested that received Federal funds from the Special Education Cluster, the Agency did not perform adequate subrecipient monitoring to ensure that funds were used for allowable purposes. For seven subrecipients tested that received Federal funds from the Education Stabilization Fund and/or Special Education Cluster, the Agency did not issue a management decision letter within the time requirement for five subrecipients and did not issue a management decision letter for two subrecipients. The Agency also failed to track and review the Single Audit report for one subrecipient. Repeat Finding: No Questioned Costs: Unknown Statistical Sample: No Context: The Agency performs various subrecipient monitoring activities during the year to ensure that subrecipients are using funds for an allowable purpose. These activities include reviewing a sample of expenditures from all reimbursement requests, tracking subrecipient audit requirements and reviewing Single Audit reports, and performing fiscal monitoring on a three-year basis. During review of reimbursement requests, the Agency does not perform procedures to ensure that salary and benefits allocated to the Special Education (SPED) grants are adequately supported by underlying documentation for a majority of its subrecipients. Rather the Agency relies on the fiscal monitoring to test that payroll is being properly allocated to grants, and the subrecipients have procedures in place to comply with Uniform Guidance Requirements. During testing of 27 subrecipients that received SPED grants, we noted the following for three subrecipients: • For the first subrecipient, the Agency had never completed a fiscal monitoring review. The Agency indicated that it was currently conducting fiscal monitoring of the school, but the subrecipient had been slow to provide documentation, resulting in delays. • The second subrecipient also did not have a fiscal monitoring review. At the time of the reimbursement, moreover, the Agency did not review any underlying documentation to support the costs allocated to the grant. The Agency stated that it relied on the entity’s annual audit to ensure costs were allocated properly; however, the subrecipient had not had a recent Single Audit in which the Special Education Cluster was a major program. • The third subrecipient had a fiscal monitoring review of payroll costs, but there was no documentation to show that the Agency had reviewed other purchased services at the time of reimbursement or during the fiscal monitoring. During review of the Agency’s procedures for reviewing subrecipient Single Audits, we noted the following: • For two subrecipients tested, their Single Audits noted significant deficiencies and material weaknesses, including one instance of questioned costs totaling $105,273; however, the Agency did not issue a management decision letter on the findings or provide documentation of any follow-up performed. • For five subrecipients tested, the management decision letter was issued eight to nine months after the audit was made available on the Federal Audit Clearinghouse (FAC). • One subrecipient was not being tracked by the Agency. This subrecipient had received $939,358 in Federal funds from the Agency. After the APA pointed this out, the Agency obtained a copy of the subrecipient’s Single Audit report, which noted no findings. Cause: Inadequate subrecipient monitoring procedures. The Agency stated it had other priorities during the year that delayed its review of the subrecipients’ Single Audit reports. Effect: Without adequate procedures, there is increased risk of noncompliance with Federal regulations, audit findings of subrecipients not being corrected, and an increased risk of loss or misuse of funds. Recommendation: We recommend the Agency review its procedures for reimbursements and fiscal monitoring to ensure subrecipients are operating in compliance with Federal requirements. We also recommend the Agency improve procedures to ensure that all subrecipients are being tracked for Single Audit requirements, and management decisions are issued in response to all findings in a timely manner. Management Response: First SPED subrecipient – The first recipient’s fiscal monitoring review is part of the current annual group of recipients being monitored; set to close June 30, 2024. Second SPED subrecipient – As part of the FY2020 federal Single Audit testing conducted by KPMG, determined the after-the-fact verification as a method to certify that the payment received on a project is reasonable in relation to the amount of work performed. Third SPED subrecipient – Purchased services and supplies were reviewed during fiscal monitoring, but the documentation was in paper form, not electronic, and was not initially provided to the auditors when requested. It was provided on March 4, 2024, when located. Single Audits – Due to extensive time commitment to State audit facilitation and Education Stabilization Fund Annual Performance Reporting, some management decision letters were not issued or were issued late. The NDE staff member performing the annual audit reviews was not aware of an additional subrecipient that needed reviewed. APA Response: The Special Education Cluster was not a major program for the second subrecipient in FY2020. For the third subrecipient, we originally requested the Agency’s fiscal monitoring documentation on December 21, 2023. Neb. Rev. Stat. § 84-305(2) (Cum. Supp. 2022) requires compliance with such a request to occur within “three business days after actual receipt of the request.” The only exceptions to that three-day response requirement are if there is “a legal basis for refusal to comply with the request” or “the entire request cannot with reasonable good faith efforts be fulfilled within three business days after actual receipt of the request due to the significant difficulty or the extensiveness of the request.” In either instance, § 84-305(2) requires the recipient of the request to take specific action in claiming the exception. The Agency failed to do so, clearly violating § 84-305(2). In no case not involving a legal basis for noncompliance, moreover, may the required compliance “exceed three calendar weeks after actual receipt of such request by any public entity.” Nevertheless, the additional documentation was not provided until over 11 weeks after being requested, which is another clear violation of § 84-305(2).
1. Final Expenditure Report Finding Number: 2023-002 Assistance Listing Number and Title: AL #84.425 COVID-19 – Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. As documented by the Ohio Department of Education and Workforce Office of Federal and State Grants Management, the Ohio Department of Education and Workforce requires school districts to submit the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grant Final Expenditure Report (FER) by December 1, 2023. School Districts must complete the FER at the end of each fiscal year for the prior state fiscal year’s Elementary and Secondary School Emergency Relief expenditures. All expenses reported on the FER should be paid. There should be no encumbered amounts. The Treasurer and Superintendent approved and submitted the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grant on September 26, 2023. However, the expenditures in this submission included the American Rescue Plan Elementary and Secondary School Emergency Relief 2022 grant expenditures as well as the 2023 grant. In an attempt to correct this, the Treasurer posted adjustments to the American Rescue Plan Elementary and Secondary School Emergency Relief Fund on November 28, 2023 totaling $50,798 and on January 23, 2024 totaling $242,907. However, the amounts adjusted by the Treasurer in November 2023 and January 2024 would not be considered federal expenditures until the time management made the decision to allocate those allowable costs to the program. As such, those adjusted expenditures could appear on the fiscal year 2024 Final Expenditure Report but not fiscal year 2023. Therefore, the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grant Final Expenditure Report submitted to the Ohio Department of Education and Workforce overstated object codes 100 by $174,529, 200 by $81,982, 400 by $29,536, and 500 by $7,689. The School District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
1. Final Expenditure Report Finding Number: 2023-002 Assistance Listing Number and Title: AL #84.425 COVID-19 – Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. As documented by the Ohio Department of Education and Workforce Office of Federal and State Grants Management, the Ohio Department of Education and Workforce requires school districts to submit the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grant Final Expenditure Report (FER) by December 1, 2023. School Districts must complete the FER at the end of each fiscal year for the prior state fiscal year’s Elementary and Secondary School Emergency Relief expenditures. All expenses reported on the FER should be paid. There should be no encumbered amounts. The Treasurer and Superintendent approved and submitted the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grant on September 26, 2023. However, the expenditures in this submission included the American Rescue Plan Elementary and Secondary School Emergency Relief 2022 grant expenditures as well as the 2023 grant. In an attempt to correct this, the Treasurer posted adjustments to the American Rescue Plan Elementary and Secondary School Emergency Relief Fund on November 28, 2023 totaling $50,798 and on January 23, 2024 totaling $242,907. However, the amounts adjusted by the Treasurer in November 2023 and January 2024 would not be considered federal expenditures until the time management made the decision to allocate those allowable costs to the program. As such, those adjusted expenditures could appear on the fiscal year 2024 Final Expenditure Report but not fiscal year 2023. Therefore, the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grant Final Expenditure Report submitted to the Ohio Department of Education and Workforce overstated object codes 100 by $174,529, 200 by $81,982, 400 by $29,536, and 500 by $7,689. The School District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. 2 CFR § 200.329(a) provides that the non-Federal entity is responsible for oversight of the operations of the Federal award supported activities. The non-Federal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Monitoring by the non-Federal entity must cover each program, function or activity. See also § 200.332. 2 CFR § 200.302(b)(2) provides, in part, that the financial management system of each non-Federal entity must provide for accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. 2 CFR § 200.332(d) provides, in part, that a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) reviewing financial and performance reports required by the pass-through entity. The Ohio Department of Education requires school districts to file a Final Expenditure Report each year by September 30, unless stated otherwise in the grant application. ODE further requires subgrantees to obligate funds within the approved project period as set forth in the approved application and to liquidate said obligations not later than 90 days after the end of the project period for electronic applications for grants, with obligations having the same meaning as in 2 CFR §§ 200.343 and 200.1. ODE also requires all allowable grant expenditures obligated by the project end date as designated in the grant agreement to be reported in the FER. The District did file the Final Expenditure Report with ODE before the required reporting deadline, however, due to deficiencies in the internal policies and procedures over Federal compliance, the District did not exclude the prior grant year expenditures obligated during the prior fiscal year, but not paid until after June 30, 2022. This resulted in expenditures being overreported in the amount of $78,795; however, this oversight did not result in additional federal funding. Failure to file accurate financial information in the Final Expenditure Report could lead to material misstatements and could impact future grant funding. The District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. 2 CFR § 200.329(a) provides that the non-Federal entity is responsible for oversight of the operations of the Federal award supported activities. The non-Federal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Monitoring by the non-Federal entity must cover each program, function or activity. See also § 200.332. 2 CFR § 200.302(b)(2) provides, in part, that the financial management system of each non-Federal entity must provide for accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. 2 CFR § 200.332(d) provides, in part, that a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) reviewing financial and performance reports required by the pass-through entity. The Ohio Department of Education requires school districts to file a Final Expenditure Report each year by September 30, unless stated otherwise in the grant application. ODE further requires subgrantees to obligate funds within the approved project period as set forth in the approved application and to liquidate said obligations not later than 90 days after the end of the project period for electronic applications for grants, with obligations having the same meaning as in 2 CFR §§ 200.343 and 200.1. ODE also requires all allowable grant expenditures obligated by the project end date as designated in the grant agreement to be reported in the FER. The District did file the Final Expenditure Report with ODE before the required reporting deadline, however, due to deficiencies in the internal policies and procedures over Federal compliance, the District did not exclude the prior grant year expenditures obligated during the prior fiscal year, but not paid until after June 30, 2022. This resulted in expenditures being overreported in the amount of $78,795; however, this oversight did not result in additional federal funding. Failure to file accurate financial information in the Final Expenditure Report could lead to material misstatements and could impact future grant funding. The District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
Program: Various, including AL 84.027 – Special Education Grants to States; AL 84.173 – COVID-19 Special Education Preschool Grants; AL 84.425D – COVID-19 Education Stabilization Fund – Elementary and Secondary School Emergency Relief Fund (ESSER I and ESSER II); AL 84.425U – COVID-19 Education Stabilization Fund – American Rescue Plan – Elementary and Secondary School Emergency Relief Fund (ARP ESSER) – Subrecipient Monitoring Grant Number & Year: Various, including H027A210079, FFY 2022; H173X210077, FFY 2022; S425D200048, grant period ending 9/30/2022; S425D210048, grant period ending 9/30/2023; S425U210048, grant period ending 9/30/2024. Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR § 3474.1 (January 1, 2023), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). Per 2 CFR § 200.403 (January 1, 2023), allowable costs must be necessary, reasonable, and adequately documented. 2 CFR § 200.332 (January 1, 2023) states, in relevant part, the following: All pass-through entities must: * * * * (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. * * * * (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward[.] * * * * (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. 2 CFR § 200.521 (January 1, 2023) states, in relevant part, the following: (c) Pass-through entity. As provided in § 200.332(d), the pass-through entity must be responsible for issuing a management decision for audit findings that relate to Federal awards it makes to subrecipients. (d) Time requirements. The Federal awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. Good internal control requires procedures to ensure that subrecipients are using grant funds for allowable purposes. Good internal control also requires procedures to ensure that subrecipient Single Audit reports are being reviewed, and management decision letters are being issued in a timely manner to ensure that corrective action is being implemented. Condition: For 3 of 27 subrecipients tested that received Federal funds from the Special Education Cluster, the Agency did not perform adequate subrecipient monitoring to ensure that funds were used for allowable purposes. For seven subrecipients tested that received Federal funds from the Education Stabilization Fund and/or Special Education Cluster, the Agency did not issue a management decision letter within the time requirement for five subrecipients and did not issue a management decision letter for two subrecipients. The Agency also failed to track and review the Single Audit report for one subrecipient. Repeat Finding: No Questioned Costs: Unknown Statistical Sample: No Context: The Agency performs various subrecipient monitoring activities during the year to ensure that subrecipients are using funds for an allowable purpose. These activities include reviewing a sample of expenditures from all reimbursement requests, tracking subrecipient audit requirements and reviewing Single Audit reports, and performing fiscal monitoring on a three-year basis. During review of reimbursement requests, the Agency does not perform procedures to ensure that salary and benefits allocated to the Special Education (SPED) grants are adequately supported by underlying documentation for a majority of its subrecipients. Rather the Agency relies on the fiscal monitoring to test that payroll is being properly allocated to grants, and the subrecipients have procedures in place to comply with Uniform Guidance Requirements. During testing of 27 subrecipients that received SPED grants, we noted the following for three subrecipients: • For the first subrecipient, the Agency had never completed a fiscal monitoring review. The Agency indicated that it was currently conducting fiscal monitoring of the school, but the subrecipient had been slow to provide documentation, resulting in delays. • The second subrecipient also did not have a fiscal monitoring review. At the time of the reimbursement, moreover, the Agency did not review any underlying documentation to support the costs allocated to the grant. The Agency stated that it relied on the entity’s annual audit to ensure costs were allocated properly; however, the subrecipient had not had a recent Single Audit in which the Special Education Cluster was a major program. • The third subrecipient had a fiscal monitoring review of payroll costs, but there was no documentation to show that the Agency had reviewed other purchased services at the time of reimbursement or during the fiscal monitoring. During review of the Agency’s procedures for reviewing subrecipient Single Audits, we noted the following: • For two subrecipients tested, their Single Audits noted significant deficiencies and material weaknesses, including one instance of questioned costs totaling $105,273; however, the Agency did not issue a management decision letter on the findings or provide documentation of any follow-up performed. • For five subrecipients tested, the management decision letter was issued eight to nine months after the audit was made available on the Federal Audit Clearinghouse (FAC). • One subrecipient was not being tracked by the Agency. This subrecipient had received $939,358 in Federal funds from the Agency. After the APA pointed this out, the Agency obtained a copy of the subrecipient’s Single Audit report, which noted no findings. Cause: Inadequate subrecipient monitoring procedures. The Agency stated it had other priorities during the year that delayed its review of the subrecipients’ Single Audit reports. Effect: Without adequate procedures, there is increased risk of noncompliance with Federal regulations, audit findings of subrecipients not being corrected, and an increased risk of loss or misuse of funds. Recommendation: We recommend the Agency review its procedures for reimbursements and fiscal monitoring to ensure subrecipients are operating in compliance with Federal requirements. We also recommend the Agency improve procedures to ensure that all subrecipients are being tracked for Single Audit requirements, and management decisions are issued in response to all findings in a timely manner. Management Response: First SPED subrecipient – The first recipient’s fiscal monitoring review is part of the current annual group of recipients being monitored; set to close June 30, 2024. Second SPED subrecipient – As part of the FY2020 federal Single Audit testing conducted by KPMG, determined the after-the-fact verification as a method to certify that the payment received on a project is reasonable in relation to the amount of work performed. Third SPED subrecipient – Purchased services and supplies were reviewed during fiscal monitoring, but the documentation was in paper form, not electronic, and was not initially provided to the auditors when requested. It was provided on March 4, 2024, when located. Single Audits – Due to extensive time commitment to State audit facilitation and Education Stabilization Fund Annual Performance Reporting, some management decision letters were not issued or were issued late. The NDE staff member performing the annual audit reviews was not aware of an additional subrecipient that needed reviewed. APA Response: The Special Education Cluster was not a major program for the second subrecipient in FY2020. For the third subrecipient, we originally requested the Agency’s fiscal monitoring documentation on December 21, 2023. Neb. Rev. Stat. § 84-305(2) (Cum. Supp. 2022) requires compliance with such a request to occur within “three business days after actual receipt of the request.” The only exceptions to that three-day response requirement are if there is “a legal basis for refusal to comply with the request” or “the entire request cannot with reasonable good faith efforts be fulfilled within three business days after actual receipt of the request due to the significant difficulty or the extensiveness of the request.” In either instance, § 84-305(2) requires the recipient of the request to take specific action in claiming the exception. The Agency failed to do so, clearly violating § 84-305(2). In no case not involving a legal basis for noncompliance, moreover, may the required compliance “exceed three calendar weeks after actual receipt of such request by any public entity.” Nevertheless, the additional documentation was not provided until over 11 weeks after being requested, which is another clear violation of § 84-305(2).
Program: Various, including AL 84.027 – Special Education Grants to States; AL 84.173 – COVID-19 Special Education Preschool Grants; AL 84.425D – COVID-19 Education Stabilization Fund – Elementary and Secondary School Emergency Relief Fund (ESSER I and ESSER II); AL 84.425U – COVID-19 Education Stabilization Fund – American Rescue Plan – Elementary and Secondary School Emergency Relief Fund (ARP ESSER) – Subrecipient Monitoring Grant Number & Year: Various, including H027A210079, FFY 2022; H173X210077, FFY 2022; S425D200048, grant period ending 9/30/2022; S425D210048, grant period ending 9/30/2023; S425U210048, grant period ending 9/30/2024. Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR § 3474.1 (January 1, 2023), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). Per 2 CFR § 200.403 (January 1, 2023), allowable costs must be necessary, reasonable, and adequately documented. 2 CFR § 200.332 (January 1, 2023) states, in relevant part, the following: All pass-through entities must: * * * * (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. * * * * (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward[.] * * * * (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. 2 CFR § 200.521 (January 1, 2023) states, in relevant part, the following: (c) Pass-through entity. As provided in § 200.332(d), the pass-through entity must be responsible for issuing a management decision for audit findings that relate to Federal awards it makes to subrecipients. (d) Time requirements. The Federal awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. Good internal control requires procedures to ensure that subrecipients are using grant funds for allowable purposes. Good internal control also requires procedures to ensure that subrecipient Single Audit reports are being reviewed, and management decision letters are being issued in a timely manner to ensure that corrective action is being implemented. Condition: For 3 of 27 subrecipients tested that received Federal funds from the Special Education Cluster, the Agency did not perform adequate subrecipient monitoring to ensure that funds were used for allowable purposes. For seven subrecipients tested that received Federal funds from the Education Stabilization Fund and/or Special Education Cluster, the Agency did not issue a management decision letter within the time requirement for five subrecipients and did not issue a management decision letter for two subrecipients. The Agency also failed to track and review the Single Audit report for one subrecipient. Repeat Finding: No Questioned Costs: Unknown Statistical Sample: No Context: The Agency performs various subrecipient monitoring activities during the year to ensure that subrecipients are using funds for an allowable purpose. These activities include reviewing a sample of expenditures from all reimbursement requests, tracking subrecipient audit requirements and reviewing Single Audit reports, and performing fiscal monitoring on a three-year basis. During review of reimbursement requests, the Agency does not perform procedures to ensure that salary and benefits allocated to the Special Education (SPED) grants are adequately supported by underlying documentation for a majority of its subrecipients. Rather the Agency relies on the fiscal monitoring to test that payroll is being properly allocated to grants, and the subrecipients have procedures in place to comply with Uniform Guidance Requirements. During testing of 27 subrecipients that received SPED grants, we noted the following for three subrecipients: • For the first subrecipient, the Agency had never completed a fiscal monitoring review. The Agency indicated that it was currently conducting fiscal monitoring of the school, but the subrecipient had been slow to provide documentation, resulting in delays. • The second subrecipient also did not have a fiscal monitoring review. At the time of the reimbursement, moreover, the Agency did not review any underlying documentation to support the costs allocated to the grant. The Agency stated that it relied on the entity’s annual audit to ensure costs were allocated properly; however, the subrecipient had not had a recent Single Audit in which the Special Education Cluster was a major program. • The third subrecipient had a fiscal monitoring review of payroll costs, but there was no documentation to show that the Agency had reviewed other purchased services at the time of reimbursement or during the fiscal monitoring. During review of the Agency’s procedures for reviewing subrecipient Single Audits, we noted the following: • For two subrecipients tested, their Single Audits noted significant deficiencies and material weaknesses, including one instance of questioned costs totaling $105,273; however, the Agency did not issue a management decision letter on the findings or provide documentation of any follow-up performed. • For five subrecipients tested, the management decision letter was issued eight to nine months after the audit was made available on the Federal Audit Clearinghouse (FAC). • One subrecipient was not being tracked by the Agency. This subrecipient had received $939,358 in Federal funds from the Agency. After the APA pointed this out, the Agency obtained a copy of the subrecipient’s Single Audit report, which noted no findings. Cause: Inadequate subrecipient monitoring procedures. The Agency stated it had other priorities during the year that delayed its review of the subrecipients’ Single Audit reports. Effect: Without adequate procedures, there is increased risk of noncompliance with Federal regulations, audit findings of subrecipients not being corrected, and an increased risk of loss or misuse of funds. Recommendation: We recommend the Agency review its procedures for reimbursements and fiscal monitoring to ensure subrecipients are operating in compliance with Federal requirements. We also recommend the Agency improve procedures to ensure that all subrecipients are being tracked for Single Audit requirements, and management decisions are issued in response to all findings in a timely manner. Management Response: First SPED subrecipient – The first recipient’s fiscal monitoring review is part of the current annual group of recipients being monitored; set to close June 30, 2024. Second SPED subrecipient – As part of the FY2020 federal Single Audit testing conducted by KPMG, determined the after-the-fact verification as a method to certify that the payment received on a project is reasonable in relation to the amount of work performed. Third SPED subrecipient – Purchased services and supplies were reviewed during fiscal monitoring, but the documentation was in paper form, not electronic, and was not initially provided to the auditors when requested. It was provided on March 4, 2024, when located. Single Audits – Due to extensive time commitment to State audit facilitation and Education Stabilization Fund Annual Performance Reporting, some management decision letters were not issued or were issued late. The NDE staff member performing the annual audit reviews was not aware of an additional subrecipient that needed reviewed. APA Response: The Special Education Cluster was not a major program for the second subrecipient in FY2020. For the third subrecipient, we originally requested the Agency’s fiscal monitoring documentation on December 21, 2023. Neb. Rev. Stat. § 84-305(2) (Cum. Supp. 2022) requires compliance with such a request to occur within “three business days after actual receipt of the request.” The only exceptions to that three-day response requirement are if there is “a legal basis for refusal to comply with the request” or “the entire request cannot with reasonable good faith efforts be fulfilled within three business days after actual receipt of the request due to the significant difficulty or the extensiveness of the request.” In either instance, § 84-305(2) requires the recipient of the request to take specific action in claiming the exception. The Agency failed to do so, clearly violating § 84-305(2). In no case not involving a legal basis for noncompliance, moreover, may the required compliance “exceed three calendar weeks after actual receipt of such request by any public entity.” Nevertheless, the additional documentation was not provided until over 11 weeks after being requested, which is another clear violation of § 84-305(2).
Program: AL 84.287 – Twenty-First Century Community Learning Centers – Subrecipient Monitoring Grant Number & Year: S287C210027, FFY 2022 Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR § 3474.1 (January 1, 2023), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). 2 CFR § 200.332 (January 1, 2023) states, in relevant part, the following: All pass-through entities must: * * * * (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. 2 CFR § 200.508 (January 1, 2023) states, in relevant part, the following: The auditee must: * * * * (d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by this part. Neb. Rev. Stat. § 84-305(2) (Cum. Supp. 2022) states, in relevant part, the following: Upon receipt of a written request by the Auditor of Public Accounts for access to any information or records, the public entity shall provide to the auditor as soon as is practicable and without delay, but not more than three business days after actual receipt of the request, either (a) the requested materials or (b)(i) if there is a legal basis for refusal to comply with the request, a written denial of the request together with the information specified in subsection (1) of this section or (ii) if the entire request cannot with reasonable good faith efforts be fulfilled within three business days after actual receipt of the request due to the significant difficulty or the extensiveness of the request, a written explanation, including the earliest practicable date for fulfilling the request, and an opportunity for the auditor to modify or prioritize the items within the request. No delay due to the significant difficulty or the extensiveness of any request for access to information or records shall exceed three calendar weeks after actual receipt of such request by any public entity. (Emphasis added.) A proper system of internal control includes procedures to ensure the Department’s fiscal monitoring polices are followed. Good internal control also requires procedures to ensure audit information is provided promptly in accordance with State and Federal requirements. Condition: The Agency failed to perform fiscal monitoring of one subrecipient tested for the Twenty-First Century Community Learning Centers grant. Contrary to § 84-305(2), moreover, the Agency failed to respond promptly to requests for information. Repeat Finding: No Questioned Costs: None Statistical Sample: No Context: The Agency performed a review of a reimbursement request for $183,825, where staff compared the amount claimed to the school-provided accounting records and payroll reports with employee names. The Agency’s policy then requires further fiscal monitoring on at least a three-year rotational basis for all school districts. As part of this process, a more detailed review of time and effort documentation is supposed to be completed. According to Agency staff, fiscal monitoring was scheduled for October 2022; however, school district staff stated that the timing would not work for them. The Agency began its review in December 2022, but the process had yet to be completed – more than a year later – due to a lack of responsiveness from the school district. Fiscal monitoring of the school district was last performed in fiscal year 2020. Additionally, the APA asked the Agency on January 11, 2024, for documentation to support the payroll expenses on the reimbursement request. On January 12, 2024, the Agency presented the APA with the documentation from the school district; however, this was the same documentation provided previously to the Agency at the time of reimbursement. This documentation was insufficient to support the payroll expenses questioned. On March 1, 2024, seven weeks after the APA’s request, the Agency produced the additional information to support the payroll expenses. Cause: Inadequate subrecipient monitoring procedures. Effect: Without adequate monitoring procedures, there is an increased risk for the payment of unallowable Federal expenses. Recommendation: We recommend the Agency strengthen its procedures for ensuring that fiscal monitoring is completed in accordance with the Agency’s policies. We further recommend the Agency implement procedures to ensure compliance with both 2 CFR § 200.508 and § 84-305(2). Management Response: The Grants Compliance Section is the Agency’s internal control function performing the requirements within 2 CFR 200.332, applying risk assessment to determine the annual fiscal monitoring base cadence and sequential sampling; non-probability sampling ensuring all recipients are subject to fiscal monitoring efforts in a three-year cycle at a minimum. As education subrecipients have received a significant influx of subawards to mitigate post-COVID supports for Nebraska education with limited staff capacity, the Department has remained mindful of these conditions and completed fiscal monitoring activities and issued an exit letter on September 5, 2023. APA Response: This finding was included as Comment 4 in the Annual Comprehensive Financial Report (ACFR) management letter dated December 13, 2023. The Agency responded, in part, “Fiscal monitoring of Lexington Public Schools was being performed in 2023 but was not completed as of the time of the ACFR audit.” When the Single Audit team requested the payroll documentation, the Agency did not inform the APA that monitoring was completed until March 5, 2024, which is well past the time requirements set out in § 84-305(2). Regardless, the fiscal monitoring was not completed within three years.
Program: Various, including AL 84.027 – Special Education Grants to States; AL 84.173 – COVID-19 Special Education Preschool Grants; AL 84.425D – COVID-19 Education Stabilization Fund – Elementary and Secondary School Emergency Relief Fund (ESSER I and ESSER II); AL 84.425U – COVID-19 Education Stabilization Fund – American Rescue Plan – Elementary and Secondary School Emergency Relief Fund (ARP ESSER) – Subrecipient Monitoring Grant Number & Year: Various, including H027A210079, FFY 2022; H173X210077, FFY 2022; S425D200048, grant period ending 9/30/2022; S425D210048, grant period ending 9/30/2023; S425U210048, grant period ending 9/30/2024. Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR § 3474.1 (January 1, 2023), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). Per 2 CFR § 200.403 (January 1, 2023), allowable costs must be necessary, reasonable, and adequately documented. 2 CFR § 200.332 (January 1, 2023) states, in relevant part, the following: All pass-through entities must: * * * * (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. * * * * (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward[.] * * * * (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. 2 CFR § 200.521 (January 1, 2023) states, in relevant part, the following: (c) Pass-through entity. As provided in § 200.332(d), the pass-through entity must be responsible for issuing a management decision for audit findings that relate to Federal awards it makes to subrecipients. (d) Time requirements. The Federal awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. Good internal control requires procedures to ensure that subrecipients are using grant funds for allowable purposes. Good internal control also requires procedures to ensure that subrecipient Single Audit reports are being reviewed, and management decision letters are being issued in a timely manner to ensure that corrective action is being implemented. Condition: For 3 of 27 subrecipients tested that received Federal funds from the Special Education Cluster, the Agency did not perform adequate subrecipient monitoring to ensure that funds were used for allowable purposes. For seven subrecipients tested that received Federal funds from the Education Stabilization Fund and/or Special Education Cluster, the Agency did not issue a management decision letter within the time requirement for five subrecipients and did not issue a management decision letter for two subrecipients. The Agency also failed to track and review the Single Audit report for one subrecipient. Repeat Finding: No Questioned Costs: Unknown Statistical Sample: No Context: The Agency performs various subrecipient monitoring activities during the year to ensure that subrecipients are using funds for an allowable purpose. These activities include reviewing a sample of expenditures from all reimbursement requests, tracking subrecipient audit requirements and reviewing Single Audit reports, and performing fiscal monitoring on a three-year basis. During review of reimbursement requests, the Agency does not perform procedures to ensure that salary and benefits allocated to the Special Education (SPED) grants are adequately supported by underlying documentation for a majority of its subrecipients. Rather the Agency relies on the fiscal monitoring to test that payroll is being properly allocated to grants, and the subrecipients have procedures in place to comply with Uniform Guidance Requirements. During testing of 27 subrecipients that received SPED grants, we noted the following for three subrecipients: • For the first subrecipient, the Agency had never completed a fiscal monitoring review. The Agency indicated that it was currently conducting fiscal monitoring of the school, but the subrecipient had been slow to provide documentation, resulting in delays. • The second subrecipient also did not have a fiscal monitoring review. At the time of the reimbursement, moreover, the Agency did not review any underlying documentation to support the costs allocated to the grant. The Agency stated that it relied on the entity’s annual audit to ensure costs were allocated properly; however, the subrecipient had not had a recent Single Audit in which the Special Education Cluster was a major program. • The third subrecipient had a fiscal monitoring review of payroll costs, but there was no documentation to show that the Agency had reviewed other purchased services at the time of reimbursement or during the fiscal monitoring. During review of the Agency’s procedures for reviewing subrecipient Single Audits, we noted the following: • For two subrecipients tested, their Single Audits noted significant deficiencies and material weaknesses, including one instance of questioned costs totaling $105,273; however, the Agency did not issue a management decision letter on the findings or provide documentation of any follow-up performed. • For five subrecipients tested, the management decision letter was issued eight to nine months after the audit was made available on the Federal Audit Clearinghouse (FAC). • One subrecipient was not being tracked by the Agency. This subrecipient had received $939,358 in Federal funds from the Agency. After the APA pointed this out, the Agency obtained a copy of the subrecipient’s Single Audit report, which noted no findings. Cause: Inadequate subrecipient monitoring procedures. The Agency stated it had other priorities during the year that delayed its review of the subrecipients’ Single Audit reports. Effect: Without adequate procedures, there is increased risk of noncompliance with Federal regulations, audit findings of subrecipients not being corrected, and an increased risk of loss or misuse of funds. Recommendation: We recommend the Agency review its procedures for reimbursements and fiscal monitoring to ensure subrecipients are operating in compliance with Federal requirements. We also recommend the Agency improve procedures to ensure that all subrecipients are being tracked for Single Audit requirements, and management decisions are issued in response to all findings in a timely manner. Management Response: First SPED subrecipient – The first recipient’s fiscal monitoring review is part of the current annual group of recipients being monitored; set to close June 30, 2024. Second SPED subrecipient – As part of the FY2020 federal Single Audit testing conducted by KPMG, determined the after-the-fact verification as a method to certify that the payment received on a project is reasonable in relation to the amount of work performed. Third SPED subrecipient – Purchased services and supplies were reviewed during fiscal monitoring, but the documentation was in paper form, not electronic, and was not initially provided to the auditors when requested. It was provided on March 4, 2024, when located. Single Audits – Due to extensive time commitment to State audit facilitation and Education Stabilization Fund Annual Performance Reporting, some management decision letters were not issued or were issued late. The NDE staff member performing the annual audit reviews was not aware of an additional subrecipient that needed reviewed. APA Response: The Special Education Cluster was not a major program for the second subrecipient in FY2020. For the third subrecipient, we originally requested the Agency’s fiscal monitoring documentation on December 21, 2023. Neb. Rev. Stat. § 84-305(2) (Cum. Supp. 2022) requires compliance with such a request to occur within “three business days after actual receipt of the request.” The only exceptions to that three-day response requirement are if there is “a legal basis for refusal to comply with the request” or “the entire request cannot with reasonable good faith efforts be fulfilled within three business days after actual receipt of the request due to the significant difficulty or the extensiveness of the request.” In either instance, § 84-305(2) requires the recipient of the request to take specific action in claiming the exception. The Agency failed to do so, clearly violating § 84-305(2). In no case not involving a legal basis for noncompliance, moreover, may the required compliance “exceed three calendar weeks after actual receipt of such request by any public entity.” Nevertheless, the additional documentation was not provided until over 11 weeks after being requested, which is another clear violation of § 84-305(2).
Program: Various, including AL 84.027 – Special Education Grants to States; AL 84.173 – COVID-19 Special Education Preschool Grants; AL 84.425D – COVID-19 Education Stabilization Fund – Elementary and Secondary School Emergency Relief Fund (ESSER I and ESSER II); AL 84.425U – COVID-19 Education Stabilization Fund – American Rescue Plan – Elementary and Secondary School Emergency Relief Fund (ARP ESSER) – Subrecipient Monitoring Grant Number & Year: Various, including H027A210079, FFY 2022; H173X210077, FFY 2022; S425D200048, grant period ending 9/30/2022; S425D210048, grant period ending 9/30/2023; S425U210048, grant period ending 9/30/2024. Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR § 3474.1 (January 1, 2023), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). Per 2 CFR § 200.403 (January 1, 2023), allowable costs must be necessary, reasonable, and adequately documented. 2 CFR § 200.332 (January 1, 2023) states, in relevant part, the following: All pass-through entities must: * * * * (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. * * * * (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward[.] * * * * (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. 2 CFR § 200.521 (January 1, 2023) states, in relevant part, the following: (c) Pass-through entity. As provided in § 200.332(d), the pass-through entity must be responsible for issuing a management decision for audit findings that relate to Federal awards it makes to subrecipients. (d) Time requirements. The Federal awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. Good internal control requires procedures to ensure that subrecipients are using grant funds for allowable purposes. Good internal control also requires procedures to ensure that subrecipient Single Audit reports are being reviewed, and management decision letters are being issued in a timely manner to ensure that corrective action is being implemented. Condition: For 3 of 27 subrecipients tested that received Federal funds from the Special Education Cluster, the Agency did not perform adequate subrecipient monitoring to ensure that funds were used for allowable purposes. For seven subrecipients tested that received Federal funds from the Education Stabilization Fund and/or Special Education Cluster, the Agency did not issue a management decision letter within the time requirement for five subrecipients and did not issue a management decision letter for two subrecipients. The Agency also failed to track and review the Single Audit report for one subrecipient. Repeat Finding: No Questioned Costs: Unknown Statistical Sample: No Context: The Agency performs various subrecipient monitoring activities during the year to ensure that subrecipients are using funds for an allowable purpose. These activities include reviewing a sample of expenditures from all reimbursement requests, tracking subrecipient audit requirements and reviewing Single Audit reports, and performing fiscal monitoring on a three-year basis. During review of reimbursement requests, the Agency does not perform procedures to ensure that salary and benefits allocated to the Special Education (SPED) grants are adequately supported by underlying documentation for a majority of its subrecipients. Rather the Agency relies on the fiscal monitoring to test that payroll is being properly allocated to grants, and the subrecipients have procedures in place to comply with Uniform Guidance Requirements. During testing of 27 subrecipients that received SPED grants, we noted the following for three subrecipients: • For the first subrecipient, the Agency had never completed a fiscal monitoring review. The Agency indicated that it was currently conducting fiscal monitoring of the school, but the subrecipient had been slow to provide documentation, resulting in delays. • The second subrecipient also did not have a fiscal monitoring review. At the time of the reimbursement, moreover, the Agency did not review any underlying documentation to support the costs allocated to the grant. The Agency stated that it relied on the entity’s annual audit to ensure costs were allocated properly; however, the subrecipient had not had a recent Single Audit in which the Special Education Cluster was a major program. • The third subrecipient had a fiscal monitoring review of payroll costs, but there was no documentation to show that the Agency had reviewed other purchased services at the time of reimbursement or during the fiscal monitoring. During review of the Agency’s procedures for reviewing subrecipient Single Audits, we noted the following: • For two subrecipients tested, their Single Audits noted significant deficiencies and material weaknesses, including one instance of questioned costs totaling $105,273; however, the Agency did not issue a management decision letter on the findings or provide documentation of any follow-up performed. • For five subrecipients tested, the management decision letter was issued eight to nine months after the audit was made available on the Federal Audit Clearinghouse (FAC). • One subrecipient was not being tracked by the Agency. This subrecipient had received $939,358 in Federal funds from the Agency. After the APA pointed this out, the Agency obtained a copy of the subrecipient’s Single Audit report, which noted no findings. Cause: Inadequate subrecipient monitoring procedures. The Agency stated it had other priorities during the year that delayed its review of the subrecipients’ Single Audit reports. Effect: Without adequate procedures, there is increased risk of noncompliance with Federal regulations, audit findings of subrecipients not being corrected, and an increased risk of loss or misuse of funds. Recommendation: We recommend the Agency review its procedures for reimbursements and fiscal monitoring to ensure subrecipients are operating in compliance with Federal requirements. We also recommend the Agency improve procedures to ensure that all subrecipients are being tracked for Single Audit requirements, and management decisions are issued in response to all findings in a timely manner. Management Response: First SPED subrecipient – The first recipient’s fiscal monitoring review is part of the current annual group of recipients being monitored; set to close June 30, 2024. Second SPED subrecipient – As part of the FY2020 federal Single Audit testing conducted by KPMG, determined the after-the-fact verification as a method to certify that the payment received on a project is reasonable in relation to the amount of work performed. Third SPED subrecipient – Purchased services and supplies were reviewed during fiscal monitoring, but the documentation was in paper form, not electronic, and was not initially provided to the auditors when requested. It was provided on March 4, 2024, when located. Single Audits – Due to extensive time commitment to State audit facilitation and Education Stabilization Fund Annual Performance Reporting, some management decision letters were not issued or were issued late. The NDE staff member performing the annual audit reviews was not aware of an additional subrecipient that needed reviewed. APA Response: The Special Education Cluster was not a major program for the second subrecipient in FY2020. For the third subrecipient, we originally requested the Agency’s fiscal monitoring documentation on December 21, 2023. Neb. Rev. Stat. § 84-305(2) (Cum. Supp. 2022) requires compliance with such a request to occur within “three business days after actual receipt of the request.” The only exceptions to that three-day response requirement are if there is “a legal basis for refusal to comply with the request” or “the entire request cannot with reasonable good faith efforts be fulfilled within three business days after actual receipt of the request due to the significant difficulty or the extensiveness of the request.” In either instance, § 84-305(2) requires the recipient of the request to take specific action in claiming the exception. The Agency failed to do so, clearly violating § 84-305(2). In no case not involving a legal basis for noncompliance, moreover, may the required compliance “exceed three calendar weeks after actual receipt of such request by any public entity.” Nevertheless, the additional documentation was not provided until over 11 weeks after being requested, which is another clear violation of § 84-305(2).
Program: Various, including AL 84.027 – Special Education Grants to States; AL 84.173 – COVID-19 Special Education Preschool Grants; AL 84.425D – COVID-19 Education Stabilization Fund – Elementary and Secondary School Emergency Relief Fund (ESSER I and ESSER II); AL 84.425U – COVID-19 Education Stabilization Fund – American Rescue Plan – Elementary and Secondary School Emergency Relief Fund (ARP ESSER) – Subrecipient Monitoring Grant Number & Year: Various, including H027A210079, FFY 2022; H173X210077, FFY 2022; S425D200048, grant period ending 9/30/2022; S425D210048, grant period ending 9/30/2023; S425U210048, grant period ending 9/30/2024. Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR § 3474.1 (January 1, 2023), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 200.207(a). Per 2 CFR § 200.403 (January 1, 2023), allowable costs must be necessary, reasonable, and adequately documented. 2 CFR § 200.332 (January 1, 2023) states, in relevant part, the following: All pass-through entities must: * * * * (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. * * * * (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521. (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward[.] * * * * (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. 2 CFR § 200.521 (January 1, 2023) states, in relevant part, the following: (c) Pass-through entity. As provided in § 200.332(d), the pass-through entity must be responsible for issuing a management decision for audit findings that relate to Federal awards it makes to subrecipients. (d) Time requirements. The Federal awarding agency or pass-through entity responsible for issuing a management decision must do so within six months of acceptance of the audit report by the FAC. Good internal control requires procedures to ensure that subrecipients are using grant funds for allowable purposes. Good internal control also requires procedures to ensure that subrecipient Single Audit reports are being reviewed, and management decision letters are being issued in a timely manner to ensure that corrective action is being implemented. Condition: For 3 of 27 subrecipients tested that received Federal funds from the Special Education Cluster, the Agency did not perform adequate subrecipient monitoring to ensure that funds were used for allowable purposes. For seven subrecipients tested that received Federal funds from the Education Stabilization Fund and/or Special Education Cluster, the Agency did not issue a management decision letter within the time requirement for five subrecipients and did not issue a management decision letter for two subrecipients. The Agency also failed to track and review the Single Audit report for one subrecipient. Repeat Finding: No Questioned Costs: Unknown Statistical Sample: No Context: The Agency performs various subrecipient monitoring activities during the year to ensure that subrecipients are using funds for an allowable purpose. These activities include reviewing a sample of expenditures from all reimbursement requests, tracking subrecipient audit requirements and reviewing Single Audit reports, and performing fiscal monitoring on a three-year basis. During review of reimbursement requests, the Agency does not perform procedures to ensure that salary and benefits allocated to the Special Education (SPED) grants are adequately supported by underlying documentation for a majority of its subrecipients. Rather the Agency relies on the fiscal monitoring to test that payroll is being properly allocated to grants, and the subrecipients have procedures in place to comply with Uniform Guidance Requirements. During testing of 27 subrecipients that received SPED grants, we noted the following for three subrecipients: • For the first subrecipient, the Agency had never completed a fiscal monitoring review. The Agency indicated that it was currently conducting fiscal monitoring of the school, but the subrecipient had been slow to provide documentation, resulting in delays. • The second subrecipient also did not have a fiscal monitoring review. At the time of the reimbursement, moreover, the Agency did not review any underlying documentation to support the costs allocated to the grant. The Agency stated that it relied on the entity’s annual audit to ensure costs were allocated properly; however, the subrecipient had not had a recent Single Audit in which the Special Education Cluster was a major program. • The third subrecipient had a fiscal monitoring review of payroll costs, but there was no documentation to show that the Agency had reviewed other purchased services at the time of reimbursement or during the fiscal monitoring. During review of the Agency’s procedures for reviewing subrecipient Single Audits, we noted the following: • For two subrecipients tested, their Single Audits noted significant deficiencies and material weaknesses, including one instance of questioned costs totaling $105,273; however, the Agency did not issue a management decision letter on the findings or provide documentation of any follow-up performed. • For five subrecipients tested, the management decision letter was issued eight to nine months after the audit was made available on the Federal Audit Clearinghouse (FAC). • One subrecipient was not being tracked by the Agency. This subrecipient had received $939,358 in Federal funds from the Agency. After the APA pointed this out, the Agency obtained a copy of the subrecipient’s Single Audit report, which noted no findings. Cause: Inadequate subrecipient monitoring procedures. The Agency stated it had other priorities during the year that delayed its review of the subrecipients’ Single Audit reports. Effect: Without adequate procedures, there is increased risk of noncompliance with Federal regulations, audit findings of subrecipients not being corrected, and an increased risk of loss or misuse of funds. Recommendation: We recommend the Agency review its procedures for reimbursements and fiscal monitoring to ensure subrecipients are operating in compliance with Federal requirements. We also recommend the Agency improve procedures to ensure that all subrecipients are being tracked for Single Audit requirements, and management decisions are issued in response to all findings in a timely manner. Management Response: First SPED subrecipient – The first recipient’s fiscal monitoring review is part of the current annual group of recipients being monitored; set to close June 30, 2024. Second SPED subrecipient – As part of the FY2020 federal Single Audit testing conducted by KPMG, determined the after-the-fact verification as a method to certify that the payment received on a project is reasonable in relation to the amount of work performed. Third SPED subrecipient – Purchased services and supplies were reviewed during fiscal monitoring, but the documentation was in paper form, not electronic, and was not initially provided to the auditors when requested. It was provided on March 4, 2024, when located. Single Audits – Due to extensive time commitment to State audit facilitation and Education Stabilization Fund Annual Performance Reporting, some management decision letters were not issued or were issued late. The NDE staff member performing the annual audit reviews was not aware of an additional subrecipient that needed reviewed. APA Response: The Special Education Cluster was not a major program for the second subrecipient in FY2020. For the third subrecipient, we originally requested the Agency’s fiscal monitoring documentation on December 21, 2023. Neb. Rev. Stat. § 84-305(2) (Cum. Supp. 2022) requires compliance with such a request to occur within “three business days after actual receipt of the request.” The only exceptions to that three-day response requirement are if there is “a legal basis for refusal to comply with the request” or “the entire request cannot with reasonable good faith efforts be fulfilled within three business days after actual receipt of the request due to the significant difficulty or the extensiveness of the request.” In either instance, § 84-305(2) requires the recipient of the request to take specific action in claiming the exception. The Agency failed to do so, clearly violating § 84-305(2). In no case not involving a legal basis for noncompliance, moreover, may the required compliance “exceed three calendar weeks after actual receipt of such request by any public entity.” Nevertheless, the additional documentation was not provided until over 11 weeks after being requested, which is another clear violation of § 84-305(2).
1. Final Expenditure Report Finding Number: 2023-002 Assistance Listing Number and Title: AL #84.425 COVID-19 – Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. As documented by the Ohio Department of Education and Workforce Office of Federal and State Grants Management, the Ohio Department of Education and Workforce requires school districts to submit the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grant Final Expenditure Report (FER) by December 1, 2023. School Districts must complete the FER at the end of each fiscal year for the prior state fiscal year’s Elementary and Secondary School Emergency Relief expenditures. All expenses reported on the FER should be paid. There should be no encumbered amounts. The Treasurer and Superintendent approved and submitted the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grant on September 26, 2023. However, the expenditures in this submission included the American Rescue Plan Elementary and Secondary School Emergency Relief 2022 grant expenditures as well as the 2023 grant. In an attempt to correct this, the Treasurer posted adjustments to the American Rescue Plan Elementary and Secondary School Emergency Relief Fund on November 28, 2023 totaling $50,798 and on January 23, 2024 totaling $242,907. However, the amounts adjusted by the Treasurer in November 2023 and January 2024 would not be considered federal expenditures until the time management made the decision to allocate those allowable costs to the program. As such, those adjusted expenditures could appear on the fiscal year 2024 Final Expenditure Report but not fiscal year 2023. Therefore, the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grant Final Expenditure Report submitted to the Ohio Department of Education and Workforce overstated object codes 100 by $174,529, 200 by $81,982, 400 by $29,536, and 500 by $7,689. The School District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
1. Final Expenditure Report Finding Number: 2023-002 Assistance Listing Number and Title: AL #84.425 COVID-19 – Education Stabilization Fund Federal Award Identification Number / Year: 2023 Federal Agency: Department of Education Compliance Requirement: Reporting Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. As documented by the Ohio Department of Education and Workforce Office of Federal and State Grants Management, the Ohio Department of Education and Workforce requires school districts to submit the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grant Final Expenditure Report (FER) by December 1, 2023. School Districts must complete the FER at the end of each fiscal year for the prior state fiscal year’s Elementary and Secondary School Emergency Relief expenditures. All expenses reported on the FER should be paid. There should be no encumbered amounts. The Treasurer and Superintendent approved and submitted the Final Expenditure Report for the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grant on September 26, 2023. However, the expenditures in this submission included the American Rescue Plan Elementary and Secondary School Emergency Relief 2022 grant expenditures as well as the 2023 grant. In an attempt to correct this, the Treasurer posted adjustments to the American Rescue Plan Elementary and Secondary School Emergency Relief Fund on November 28, 2023 totaling $50,798 and on January 23, 2024 totaling $242,907. However, the amounts adjusted by the Treasurer in November 2023 and January 2024 would not be considered federal expenditures until the time management made the decision to allocate those allowable costs to the program. As such, those adjusted expenditures could appear on the fiscal year 2024 Final Expenditure Report but not fiscal year 2023. Therefore, the American Rescue Plan Elementary and Secondary School Emergency Relief 2023 grant Final Expenditure Report submitted to the Ohio Department of Education and Workforce overstated object codes 100 by $174,529, 200 by $81,982, 400 by $29,536, and 500 by $7,689. The School District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. 2 CFR § 200.329(a) provides that the non-Federal entity is responsible for oversight of the operations of the Federal award supported activities. The non-Federal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Monitoring by the non-Federal entity must cover each program, function or activity. See also § 200.332. 2 CFR § 200.302(b)(2) provides, in part, that the financial management system of each non-Federal entity must provide for accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. 2 CFR § 200.332(d) provides, in part, that a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) reviewing financial and performance reports required by the pass-through entity. The Ohio Department of Education requires school districts to file a Final Expenditure Report each year by September 30, unless stated otherwise in the grant application. ODE further requires subgrantees to obligate funds within the approved project period as set forth in the approved application and to liquidate said obligations not later than 90 days after the end of the project period for electronic applications for grants, with obligations having the same meaning as in 2 CFR §§ 200.343 and 200.1. ODE also requires all allowable grant expenditures obligated by the project end date as designated in the grant agreement to be reported in the FER. The District did file the Final Expenditure Report with ODE before the required reporting deadline, however, due to deficiencies in the internal policies and procedures over Federal compliance, the District did not exclude the prior grant year expenditures obligated during the prior fiscal year, but not paid until after June 30, 2022. This resulted in expenditures being overreported in the amount of $78,795; however, this oversight did not result in additional federal funding. Failure to file accurate financial information in the Final Expenditure Report could lead to material misstatements and could impact future grant funding. The District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR § 200.102(a) and 2 CFR § 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. 2 CFR § 200.329(a) provides that the non-Federal entity is responsible for oversight of the operations of the Federal award supported activities. The non-Federal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Monitoring by the non-Federal entity must cover each program, function or activity. See also § 200.332. 2 CFR § 200.302(b)(2) provides, in part, that the financial management system of each non-Federal entity must provide for accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. 2 CFR § 200.332(d) provides, in part, that a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) reviewing financial and performance reports required by the pass-through entity. The Ohio Department of Education requires school districts to file a Final Expenditure Report each year by September 30, unless stated otherwise in the grant application. ODE further requires subgrantees to obligate funds within the approved project period as set forth in the approved application and to liquidate said obligations not later than 90 days after the end of the project period for electronic applications for grants, with obligations having the same meaning as in 2 CFR §§ 200.343 and 200.1. ODE also requires all allowable grant expenditures obligated by the project end date as designated in the grant agreement to be reported in the FER. The District did file the Final Expenditure Report with ODE before the required reporting deadline, however, due to deficiencies in the internal policies and procedures over Federal compliance, the District did not exclude the prior grant year expenditures obligated during the prior fiscal year, but not paid until after June 30, 2022. This resulted in expenditures being overreported in the amount of $78,795; however, this oversight did not result in additional federal funding. Failure to file accurate financial information in the Final Expenditure Report could lead to material misstatements and could impact future grant funding. The District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
2 CFR ? 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR ? 200.102(a) and 2 CFR ? 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. The Ohio Department of Education requires school districts to file a Final Expenditure Report each year by September 30, unless stated otherwise in the grant application. ODE further requires subgrantees to obligate funds within the approved project period as set forth in the approved application and to liquidate said obligations not later than 90 days after the end of the project period for electronic applications for grants. ODE also requires all allowable grant expenditures obligated by the project end date and liquidated no later than 90 days after the end of the project period as designated in the grant agreement to be reported in the FER. The District did file the Final Expenditure Report with ODE before the required reporting deadline, however, due to deficiencies in the internal policies and procedures over Federal compliance, the District did not report expenditures obligated after fiscal year end and prior to the project end date for the Assistance Listing #84.425U American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) Fund grant, resulting in expenditures being underreported in the amount of $51,114. In addition, the District did not report any Assistance Listing #84.425D Elementary and Secondary School Emergency Relief (ESSER I) Fund expenditures, totaling $2,843, that occurred during the fiscal year. Failure to file accurate financial information in the Final Expenditure Report could lead to material misstatements and could impact future grant funding. The District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
2 CFR ? 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR ? 200.102(a) and 2 CFR ? 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. The Ohio Department of Education requires school districts to file a Final Expenditure Report each year by September 30, unless stated otherwise in the grant application. ODE further requires subgrantees to obligate funds within the approved project period as set forth in the approved application and to liquidate said obligations not later than 90 days after the end of the project period for electronic applications for grants. ODE also requires all allowable grant expenditures obligated by the project end date and liquidated no later than 90 days after the end of the project period as designated in the grant agreement to be reported in the FER. The District did file the Final Expenditure Report with ODE before the required reporting deadline, however, due to deficiencies in the internal policies and procedures over Federal compliance, the District did not report expenditures obligated after fiscal year end and prior to the project end date for the Assistance Listing #84.425U American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) Fund grant, resulting in expenditures being underreported in the amount of $51,114. In addition, the District did not report any Assistance Listing #84.425D Elementary and Secondary School Emergency Relief (ESSER I) Fund expenditures, totaling $2,843, that occurred during the fiscal year. Failure to file accurate financial information in the Final Expenditure Report could lead to material misstatements and could impact future grant funding. The District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
2 CFR ? 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR ? 200.102(a) and 2 CFR ? 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. The Ohio Department of Education requires school districts to file a Final Expenditure Report each year by September 30, unless stated otherwise in the grant application. ODE further requires subgrantees to obligate funds within the approved project period as set forth in the approved application and to liquidate said obligations not later than 90 days after the end of the project period for electronic applications for grants. ODE also requires all allowable grant expenditures obligated by the project end date and liquidated no later than 90 days after the end of the project period as designated in the grant agreement to be reported in the FER. The District did file the Final Expenditure Report with ODE before the required reporting deadline, however, due to deficiencies in the internal policies and procedures over Federal compliance, the District did not report expenditures obligated after fiscal year end and prior to the project end date for the Assistance Listing #84.425U American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) Fund grant, resulting in expenditures being underreported in the amount of $51,114. In addition, the District did not report any Assistance Listing #84.425D Elementary and Secondary School Emergency Relief (ESSER I) Fund expenditures, totaling $2,843, that occurred during the fiscal year. Failure to file accurate financial information in the Final Expenditure Report could lead to material misstatements and could impact future grant funding. The District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
Program: AL 84.010 ? Title I Grants to Local Educational Agencies ? Allowability and Subrecipient Monitoring Grant Number & Year: S010A190027, FFY 2020; S010A200027, FFY 2021 Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR ? 3474.1 (January 1, 2022), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR ? 200.102(a) and 200.207(a). Per 2 CFR ? 200.403 (January 1, 2022), allowable costs must be necessary, reasonable, and adequately documented. 2 CFR ? 200.430(i)(1) (January 1, 2022) states, in relevant part, the following: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . . ; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity . . . . ; and * * * * (vii) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Enclosure A of the ?Letter to Chief State School Officers on Granting Administrative Flexibility for Better Measures of Success? (September 7, 2012) provides guidelines for local educational agencies (LEAs), using a substitute system for time-and-effort reporting. Enclosure A states, in relevant part, the following: (3) Employee schedules must: a. Indicate the specific activity or cost objective that the employee worked on for each segment of the employee?s schedule; b. Account for the total hours for which each employee is compensated during the period reflected on the employee?s schedule; and c. Be certified at least semiannually and signed by the employee and a supervisory official having firsthand knowledge of the work performed by the employee. 2 CFR ? 200.332 (January 1, 2022) states, in relevant part, the following: All pass-through entities must: * * * * (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: * * * * (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient . . . . A good internal control plan requires that adequate documentation be maintained to support amounts claimed by and paid to subrecipients. Good internal control also requires procedures to follow up with subrecipients to ensure they are correcting deficiencies and in compliance with applicable regulations. Condition: The Agency lacked procedures to ensure that subrecipients documented their use of Federal awards appropriately. Repeat Finding: No Questioned Costs: $145,101 known (S010A190027, $8,041; S010A200027, $137,060) Statistical Sample: No Context: We randomly selected 25 subrecipient payments and also chose the largest subrecipient payment for testing. We noted the following: ? Several employees? salaries and benefits were included in the reimbursement requests; however, the Agency did not require subrecipients to submit documentation for these expenditures, other than reports from their accountings systems, at the time of reimbursement. We provided the Agency with an opportunity to request documentation from its subrecipients to support that their salaries and benefits expenses were allowable and in accordance with Federal cost principles; however, two of the subrecipients did not provide adequate support to show that their salaries and benefits were allocable to the grant, resulting in $8,041 sample questioned costs and $137,060 non-sample questioned costs. ? The Agency?s procedure is to perform fiscal reviews of each subrecipient at least once every three years. We reviewed the most recent fiscal reviews for the same 26 subrecipients selected for testing above. For five of these reviews, the Agency noted that the subrecipient did not maintain adequate documentation for salaries and benefits. When we inquired with the Agency regarding what had been done to follow up on its findings, the Agency replied that the findings did not require follow-up. Payment errors noted for the sample tested were $8,041. The total sample tested was $1,494,006. Subrecipient aid payments for the fiscal year ended June 30, 2022, totaled $91,043,602. The sample population was $84,396,850 (total population $91,043,602 less $6,646,752 to largest subrecipient that was separately determined to be allowable). Based on the sample tested, the case error rate was 8% (2/25). The dollar error rate for the sample was 0.54% ($8,041/$1,494,006), which estimates the potential dollars at risk for fiscal year 2022 to be $455,753 (dollar rate multiplied by the population). Cause: Inadequate procedures. Effect: Without adequate supporting documentation and monitoring procedures, there is an increased risk that Federal awards could be used for unallowable costs. Recommendation: We recommend the Agency improve procedures to monitor subrecipients, including reviewing detailed supporting documentation for payroll expenses and following up with subrecipients to ensure that they correct errors noted. Management Response: The Department agrees the two subrecipients sampled did not complete one time and effort certification semi-annually (rather completed annually instead) or with all language suggested in the guidelines from the U.S. Department of Education. However, the Department disagrees with the reimbursement being questioned costs as the time and effort certifications demonstrated adequate documentation to support the employees? activities were allowable for the Title I grant. In the absence of this information, the Department submitted affidavits from the two LEA?s supervisory staff with personal knowledge of the work performed consistent with the U.S. Department of Education?s audit resolutions practices; whereas the APA does not consider documentation after the fact to be adequate to eliminate the finding. The findings noted in the subrecipient fiscal monitoring exit letters were identified for technical assistance purposes only and not considered to have met a level of materiality that required a corrective action plan. Corrective action plans are clearly noted in subrecipient fiscal monitoring exit letters when issued and proper follow-up action is taken when this occurs. Technical assistance was provided to each of the subrecipients at the time of the monitoring review as well as to all subrecipients periodically throughout the year. APA Response: Per the Uniform Guidance, questioned costs include expenditures that lack adequate supporting documentation at the time of the audit. 2 CFR ? 200.430(i)(1) (January 1, 2022), as referenced in the report comment, says that such documentation must ?accurately reflect the work performed? and be ?supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.? Affidavits dated February 27, 2023, some 18 months after the salary and benefit expenses occurred, cannot possibly satisfy either of these requirements and are, therefore, not acceptable. As the documentation provided did not meet the minimum requirements set forth in Uniform Guidance and guidance issued by the U.S. Department of Education, the expenditures at issue must be considered questioned costs. Moreover, the Uniform Guidance requires the Agency, as the pass-through entity, to ensure that the subrecipient takes timely and appropriate action to address deficiencies identified not only during audits but also from the Agency?s own reviews. The Agency has noted issues similar to those addressed by the APA ? namely, that the subrecipients have lacked adequate supporting documentation for salary and benefit expenses. The Agency performs subrecipient fiscal monitoring for most subrecipients only every third year. Thus, effective follow-up procedures, as required by 2 CFR ? 200.332 (January 1, 2022), are needed to ensure that subrecipients implement the technical assistance provided by the Agency.
2 CFR ? 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR ? 200.102(a) and 2 CFR ? 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. The Ohio Department of Education requires school districts to file a Final Expenditure Report each year by September 30, unless stated otherwise in the grant application. ODE further requires subgrantees to obligate funds within the approved project period as set forth in the approved application and to liquidate said obligations not later than 90 days after the end of the project period for electronic applications for grants. ODE also requires all allowable grant expenditures obligated by the project end date and liquidated no later than 90 days after the end of the project period as designated in the grant agreement to be reported in the FER. The District did file the Final Expenditure Report with ODE before the required reporting deadline, however, due to deficiencies in the internal policies and procedures over Federal compliance, the District did not report expenditures obligated after fiscal year end and prior to the project end date for the Assistance Listing #84.425U American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) Fund grant, resulting in expenditures being underreported in the amount of $51,114. In addition, the District did not report any Assistance Listing #84.425D Elementary and Secondary School Emergency Relief (ESSER I) Fund expenditures, totaling $2,843, that occurred during the fiscal year. Failure to file accurate financial information in the Final Expenditure Report could lead to material misstatements and could impact future grant funding. The District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
2 CFR ? 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR ? 200.102(a) and 2 CFR ? 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. The Ohio Department of Education requires school districts to file a Final Expenditure Report each year by September 30, unless stated otherwise in the grant application. ODE further requires subgrantees to obligate funds within the approved project period as set forth in the approved application and to liquidate said obligations not later than 90 days after the end of the project period for electronic applications for grants. ODE also requires all allowable grant expenditures obligated by the project end date and liquidated no later than 90 days after the end of the project period as designated in the grant agreement to be reported in the FER. The District did file the Final Expenditure Report with ODE before the required reporting deadline, however, due to deficiencies in the internal policies and procedures over Federal compliance, the District did not report expenditures obligated after fiscal year end and prior to the project end date for the Assistance Listing #84.425U American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) Fund grant, resulting in expenditures being underreported in the amount of $51,114. In addition, the District did not report any Assistance Listing #84.425D Elementary and Secondary School Emergency Relief (ESSER I) Fund expenditures, totaling $2,843, that occurred during the fiscal year. Failure to file accurate financial information in the Final Expenditure Report could lead to material misstatements and could impact future grant funding. The District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
2 CFR ? 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR ? 200.102(a) and 2 CFR ? 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. The Ohio Department of Education requires school districts to file a Final Expenditure Report each year by September 30, unless stated otherwise in the grant application. ODE further requires subgrantees to obligate funds within the approved project period as set forth in the approved application and to liquidate said obligations not later than 90 days after the end of the project period for electronic applications for grants. ODE also requires all allowable grant expenditures obligated by the project end date and liquidated no later than 90 days after the end of the project period as designated in the grant agreement to be reported in the FER. The District did file the Final Expenditure Report with ODE before the required reporting deadline, however, due to deficiencies in the internal policies and procedures over Federal compliance, the District did not report expenditures obligated after fiscal year end and prior to the project end date for the Assistance Listing #84.425U American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) Fund grant, resulting in expenditures being underreported in the amount of $51,114. In addition, the District did not report any Assistance Listing #84.425D Elementary and Secondary School Emergency Relief (ESSER I) Fund expenditures, totaling $2,843, that occurred during the fiscal year. Failure to file accurate financial information in the Final Expenditure Report could lead to material misstatements and could impact future grant funding. The District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
Program: AL 84.010 ? Title I Grants to Local Educational Agencies ? Allowability and Subrecipient Monitoring Grant Number & Year: S010A190027, FFY 2020; S010A200027, FFY 2021 Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR ? 3474.1 (January 1, 2022), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR ? 200.102(a) and 200.207(a). Per 2 CFR ? 200.403 (January 1, 2022), allowable costs must be necessary, reasonable, and adequately documented. 2 CFR ? 200.430(i)(1) (January 1, 2022) states, in relevant part, the following: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . . ; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity . . . . ; and * * * * (vii) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Enclosure A of the ?Letter to Chief State School Officers on Granting Administrative Flexibility for Better Measures of Success? (September 7, 2012) provides guidelines for local educational agencies (LEAs), using a substitute system for time-and-effort reporting. Enclosure A states, in relevant part, the following: (3) Employee schedules must: a. Indicate the specific activity or cost objective that the employee worked on for each segment of the employee?s schedule; b. Account for the total hours for which each employee is compensated during the period reflected on the employee?s schedule; and c. Be certified at least semiannually and signed by the employee and a supervisory official having firsthand knowledge of the work performed by the employee. 2 CFR ? 200.332 (January 1, 2022) states, in relevant part, the following: All pass-through entities must: * * * * (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: * * * * (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient . . . . A good internal control plan requires that adequate documentation be maintained to support amounts claimed by and paid to subrecipients. Good internal control also requires procedures to follow up with subrecipients to ensure they are correcting deficiencies and in compliance with applicable regulations. Condition: The Agency lacked procedures to ensure that subrecipients documented their use of Federal awards appropriately. Repeat Finding: No Questioned Costs: $145,101 known (S010A190027, $8,041; S010A200027, $137,060) Statistical Sample: No Context: We randomly selected 25 subrecipient payments and also chose the largest subrecipient payment for testing. We noted the following: ? Several employees? salaries and benefits were included in the reimbursement requests; however, the Agency did not require subrecipients to submit documentation for these expenditures, other than reports from their accountings systems, at the time of reimbursement. We provided the Agency with an opportunity to request documentation from its subrecipients to support that their salaries and benefits expenses were allowable and in accordance with Federal cost principles; however, two of the subrecipients did not provide adequate support to show that their salaries and benefits were allocable to the grant, resulting in $8,041 sample questioned costs and $137,060 non-sample questioned costs. ? The Agency?s procedure is to perform fiscal reviews of each subrecipient at least once every three years. We reviewed the most recent fiscal reviews for the same 26 subrecipients selected for testing above. For five of these reviews, the Agency noted that the subrecipient did not maintain adequate documentation for salaries and benefits. When we inquired with the Agency regarding what had been done to follow up on its findings, the Agency replied that the findings did not require follow-up. Payment errors noted for the sample tested were $8,041. The total sample tested was $1,494,006. Subrecipient aid payments for the fiscal year ended June 30, 2022, totaled $91,043,602. The sample population was $84,396,850 (total population $91,043,602 less $6,646,752 to largest subrecipient that was separately determined to be allowable). Based on the sample tested, the case error rate was 8% (2/25). The dollar error rate for the sample was 0.54% ($8,041/$1,494,006), which estimates the potential dollars at risk for fiscal year 2022 to be $455,753 (dollar rate multiplied by the population). Cause: Inadequate procedures. Effect: Without adequate supporting documentation and monitoring procedures, there is an increased risk that Federal awards could be used for unallowable costs. Recommendation: We recommend the Agency improve procedures to monitor subrecipients, including reviewing detailed supporting documentation for payroll expenses and following up with subrecipients to ensure that they correct errors noted. Management Response: The Department agrees the two subrecipients sampled did not complete one time and effort certification semi-annually (rather completed annually instead) or with all language suggested in the guidelines from the U.S. Department of Education. However, the Department disagrees with the reimbursement being questioned costs as the time and effort certifications demonstrated adequate documentation to support the employees? activities were allowable for the Title I grant. In the absence of this information, the Department submitted affidavits from the two LEA?s supervisory staff with personal knowledge of the work performed consistent with the U.S. Department of Education?s audit resolutions practices; whereas the APA does not consider documentation after the fact to be adequate to eliminate the finding. The findings noted in the subrecipient fiscal monitoring exit letters were identified for technical assistance purposes only and not considered to have met a level of materiality that required a corrective action plan. Corrective action plans are clearly noted in subrecipient fiscal monitoring exit letters when issued and proper follow-up action is taken when this occurs. Technical assistance was provided to each of the subrecipients at the time of the monitoring review as well as to all subrecipients periodically throughout the year. APA Response: Per the Uniform Guidance, questioned costs include expenditures that lack adequate supporting documentation at the time of the audit. 2 CFR ? 200.430(i)(1) (January 1, 2022), as referenced in the report comment, says that such documentation must ?accurately reflect the work performed? and be ?supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.? Affidavits dated February 27, 2023, some 18 months after the salary and benefit expenses occurred, cannot possibly satisfy either of these requirements and are, therefore, not acceptable. As the documentation provided did not meet the minimum requirements set forth in Uniform Guidance and guidance issued by the U.S. Department of Education, the expenditures at issue must be considered questioned costs. Moreover, the Uniform Guidance requires the Agency, as the pass-through entity, to ensure that the subrecipient takes timely and appropriate action to address deficiencies identified not only during audits but also from the Agency?s own reviews. The Agency has noted issues similar to those addressed by the APA ? namely, that the subrecipients have lacked adequate supporting documentation for salary and benefit expenses. The Agency performs subrecipient fiscal monitoring for most subrecipients only every third year. Thus, effective follow-up procedures, as required by 2 CFR ? 200.332 (January 1, 2022), are needed to ensure that subrecipients implement the technical assistance provided by the Agency.