Federal Agency: Department of Education Federal Program: Special Education Cluster Pass-Through Agency: Massachusetts State Department of Elementary and Secondary Education Pass-Through Number(s): Various – See Schedule of Expenditures of Federal Awards Assistance Listing Numbers: 84.027, 84.173 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Qualified Opinion) Compliance Requirement: Allowable Costs/Cost Principles Criteria or specific requirement: 2 CFR, Part 200, 200.303 requires an auditee to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR Part 200.403 (g) states that costs must be adequately documented to be allowable under federal awards. Condition: We identified that the District’s internal controls were not designed to ensure proper documentation of the time charged to the grant is maintained. Questioned Costs: $85,252. These identified costs along with the projection of additionally likely questioned costs over the unsampled population resulted in likely questioned costs exceeding program materiality. Context: 20 of the 40 transactions tested, no documentation of time and effort was provided. In addition, 15 of 40 transactions, the documentation of time and effort lacked appropriate approval. Cause: Procedures were not in place to ensure the proper documentation of the time and effort for related payroll charged to the was grant were maintained. Effect: The salaries charged are subject to disallowance and are considered questioned costs. Recommendation: We recommend management review their policies and procedures in place to ensure salaries charged to the grants are appropriate and necessary supporting documentation of time and effort is maintained. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Education Federal Program: Special Education Cluster Pass-Through Agency: Massachusetts State Department of Elementary and Secondary Education Pass-Through Number(s): Various – See Schedule of Expenditures of Federal Awards Assistance Listing Numbers: 84.027, 84.173 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Qualified Opinion) Compliance Requirement: Allowable Costs/Cost Principles Criteria or specific requirement: 2 CFR, Part 200, 200.303 requires an auditee to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR Part 200.403 (g) states that costs must be adequately documented to be allowable under federal awards. Condition: We identified that the District’s internal controls were not designed to ensure proper documentation of the time charged to the grant is maintained. Questioned Costs: $85,252. These identified costs along with the projection of additionally likely questioned costs over the unsampled population resulted in likely questioned costs exceeding program materiality. Context: 20 of the 40 transactions tested, no documentation of time and effort was provided. In addition, 15 of 40 transactions, the documentation of time and effort lacked appropriate approval. Cause: Procedures were not in place to ensure the proper documentation of the time and effort for related payroll charged to the was grant were maintained. Effect: The salaries charged are subject to disallowance and are considered questioned costs. Recommendation: We recommend management review their policies and procedures in place to ensure salaries charged to the grants are appropriate and necessary supporting documentation of time and effort is maintained. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Education Federal Program: Special Education Cluster Pass-Through Agency: Massachusetts State Department of Elementary and Secondary Education Pass-Through Number(s): Various – See Schedule of Expenditures of Federal Awards Assistance Listing Numbers: 84.027, 84.173 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Qualified Opinion) Compliance Requirement: Allowable Costs/Cost Principles Criteria or specific requirement: 2 CFR, Part 200, 200.303 requires an auditee to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR Part 200.403 (g) states that costs must be adequately documented to be allowable under federal awards. Condition: We identified that the District’s internal controls were not designed to ensure proper documentation of the time charged to the grant is maintained. Questioned Costs: $85,252. These identified costs along with the projection of additionally likely questioned costs over the unsampled population resulted in likely questioned costs exceeding program materiality. Context: 20 of the 40 transactions tested, no documentation of time and effort was provided. In addition, 15 of 40 transactions, the documentation of time and effort lacked appropriate approval. Cause: Procedures were not in place to ensure the proper documentation of the time and effort for related payroll charged to the was grant were maintained. Effect: The salaries charged are subject to disallowance and are considered questioned costs. Recommendation: We recommend management review their policies and procedures in place to ensure salaries charged to the grants are appropriate and necessary supporting documentation of time and effort is maintained. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Education Federal Program: Special Education Cluster Pass-Through Agency: Massachusetts State Department of Elementary and Secondary Education Pass-Through Number(s): Various – See Schedule of Expenditures of Federal Awards Assistance Listing Numbers: 84.027, 84.173 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Qualified Opinion) Compliance Requirement: Allowable Costs/Cost Principles Criteria or specific requirement: 2 CFR, Part 200, 200.303 requires an auditee to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR Part 200.403 (g) states that costs must be adequately documented to be allowable under federal awards. Condition: We identified that the District’s internal controls were not designed to ensure proper documentation of the time charged to the grant is maintained. Questioned Costs: $85,252. These identified costs along with the projection of additionally likely questioned costs over the unsampled population resulted in likely questioned costs exceeding program materiality. Context: 20 of the 40 transactions tested, no documentation of time and effort was provided. In addition, 15 of 40 transactions, the documentation of time and effort lacked appropriate approval. Cause: Procedures were not in place to ensure the proper documentation of the time and effort for related payroll charged to the was grant were maintained. Effect: The salaries charged are subject to disallowance and are considered questioned costs. Recommendation: We recommend management review their policies and procedures in place to ensure salaries charged to the grants are appropriate and necessary supporting documentation of time and effort is maintained. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Education Federal Program: Special Education Cluster Pass-Through Agency: Massachusetts State Department of Elementary and Secondary Education Pass-Through Number(s): Various – See Schedule of Expenditures of Federal Awards Assistance Listing Numbers: 84.027, 84.173 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Qualified Opinion) Compliance Requirement: Allowable Costs/Cost Principles Criteria or specific requirement: 2 CFR, Part 200, 200.303 requires an auditee to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR Part 200.403 (g) states that costs must be adequately documented to be allowable under federal awards. Condition: We identified that the District’s internal controls were not designed to ensure proper documentation of the time charged to the grant is maintained. Questioned Costs: $85,252. These identified costs along with the projection of additionally likely questioned costs over the unsampled population resulted in likely questioned costs exceeding program materiality. Context: 20 of the 40 transactions tested, no documentation of time and effort was provided. In addition, 15 of 40 transactions, the documentation of time and effort lacked appropriate approval. Cause: Procedures were not in place to ensure the proper documentation of the time and effort for related payroll charged to the was grant were maintained. Effect: The salaries charged are subject to disallowance and are considered questioned costs. Recommendation: We recommend management review their policies and procedures in place to ensure salaries charged to the grants are appropriate and necessary supporting documentation of time and effort is maintained. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Education Federal Program: Special Education Cluster Pass-Through Agency: Massachusetts State Department of Elementary and Secondary Education Pass-Through Number(s): Various – See Schedule of Expenditures of Federal Awards Assistance Listing Numbers: 84.027, 84.173 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Qualified Opinion) Compliance Requirement: Allowable Costs/Cost Principles Criteria or specific requirement: 2 CFR, Part 200, 200.303 requires an auditee to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR Part 200.403 (g) states that costs must be adequately documented to be allowable under federal awards. Condition: We identified that the District’s internal controls were not designed to ensure proper documentation of the time charged to the grant is maintained. Questioned Costs: $85,252. These identified costs along with the projection of additionally likely questioned costs over the unsampled population resulted in likely questioned costs exceeding program materiality. Context: 20 of the 40 transactions tested, no documentation of time and effort was provided. In addition, 15 of 40 transactions, the documentation of time and effort lacked appropriate approval. Cause: Procedures were not in place to ensure the proper documentation of the time and effort for related payroll charged to the was grant were maintained. Effect: The salaries charged are subject to disallowance and are considered questioned costs. Recommendation: We recommend management review their policies and procedures in place to ensure salaries charged to the grants are appropriate and necessary supporting documentation of time and effort is maintained. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Education Federal Program: Special Education Cluster Pass-Through Agency: Massachusetts State Department of Elementary and Secondary Education Pass-Through Number(s): Various – See Schedule of Expenditures of Federal Awards Assistance Listing Numbers: 84.027, 84.173 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Qualified Opinion) Compliance Requirement: Allowable Costs/Cost Principles Criteria or specific requirement: 2 CFR, Part 200, 200.303 requires an auditee to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR Part 200.403 (g) states that costs must be adequately documented to be allowable under federal awards. Condition: We identified that the District’s internal controls were not designed to ensure proper documentation of the time charged to the grant is maintained. Questioned Costs: $85,252. These identified costs along with the projection of additionally likely questioned costs over the unsampled population resulted in likely questioned costs exceeding program materiality. Context: 20 of the 40 transactions tested, no documentation of time and effort was provided. In addition, 15 of 40 transactions, the documentation of time and effort lacked appropriate approval. Cause: Procedures were not in place to ensure the proper documentation of the time and effort for related payroll charged to the was grant were maintained. Effect: The salaries charged are subject to disallowance and are considered questioned costs. Recommendation: We recommend management review their policies and procedures in place to ensure salaries charged to the grants are appropriate and necessary supporting documentation of time and effort is maintained. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Education Federal Program: Special Education Cluster Pass-Through Agency: Massachusetts State Department of Elementary and Secondary Education Pass-Through Number(s): Various – See Schedule of Expenditures of Federal Awards Assistance Listing Numbers: 84.027, 84.173 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Qualified Opinion) Compliance Requirement: Allowable Costs/Cost Principles Criteria or specific requirement: 2 CFR, Part 200, 200.303 requires an auditee to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR Part 200.403 (g) states that costs must be adequately documented to be allowable under federal awards. Condition: We identified that the District’s internal controls were not designed to ensure proper documentation of the time charged to the grant is maintained. Questioned Costs: $85,252. These identified costs along with the projection of additionally likely questioned costs over the unsampled population resulted in likely questioned costs exceeding program materiality. Context: 20 of the 40 transactions tested, no documentation of time and effort was provided. In addition, 15 of 40 transactions, the documentation of time and effort lacked appropriate approval. Cause: Procedures were not in place to ensure the proper documentation of the time and effort for related payroll charged to the was grant were maintained. Effect: The salaries charged are subject to disallowance and are considered questioned costs. Recommendation: We recommend management review their policies and procedures in place to ensure salaries charged to the grants are appropriate and necessary supporting documentation of time and effort is maintained. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Education Federal Program: Special Education Cluster Pass-Through Agency: Massachusetts State Department of Elementary and Secondary Education Pass-Through Number(s): Various – See Schedule of Expenditures of Federal Awards Assistance Listing Numbers: 84.027, 84.173 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Qualified Opinion) Compliance Requirement: Allowable Costs/Cost Principles Criteria or specific requirement: 2 CFR, Part 200, 200.303 requires an auditee to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR Part 200.403 (g) states that costs must be adequately documented to be allowable under federal awards. Condition: We identified that the District’s internal controls were not designed to ensure proper documentation of the time charged to the grant is maintained. Questioned Costs: $85,252. These identified costs along with the projection of additionally likely questioned costs over the unsampled population resulted in likely questioned costs exceeding program materiality. Context: 20 of the 40 transactions tested, no documentation of time and effort was provided. In addition, 15 of 40 transactions, the documentation of time and effort lacked appropriate approval. Cause: Procedures were not in place to ensure the proper documentation of the time and effort for related payroll charged to the was grant were maintained. Effect: The salaries charged are subject to disallowance and are considered questioned costs. Recommendation: We recommend management review their policies and procedures in place to ensure salaries charged to the grants are appropriate and necessary supporting documentation of time and effort is maintained. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Education Federal Program: Special Education Cluster Pass-Through Agency: Massachusetts State Department of Elementary and Secondary Education Pass-Through Number(s): Various – See Schedule of Expenditures of Federal Awards Assistance Listing Numbers: 84.027, 84.173 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Qualified Opinion) Compliance Requirement: Allowable Costs/Cost Principles Criteria or specific requirement: 2 CFR, Part 200, 200.303 requires an auditee to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR Part 200.403 (g) states that costs must be adequately documented to be allowable under federal awards. Condition: We identified that the District’s internal controls were not designed to ensure proper documentation of the time charged to the grant is maintained. Questioned Costs: $85,252. These identified costs along with the projection of additionally likely questioned costs over the unsampled population resulted in likely questioned costs exceeding program materiality. Context: 20 of the 40 transactions tested, no documentation of time and effort was provided. In addition, 15 of 40 transactions, the documentation of time and effort lacked appropriate approval. Cause: Procedures were not in place to ensure the proper documentation of the time and effort for related payroll charged to the was grant were maintained. Effect: The salaries charged are subject to disallowance and are considered questioned costs. Recommendation: We recommend management review their policies and procedures in place to ensure salaries charged to the grants are appropriate and necessary supporting documentation of time and effort is maintained. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Education Federal Program: Special Education Cluster Pass-Through Agency: Massachusetts State Department of Elementary and Secondary Education Pass-Through Number(s): Various – See Schedule of Expenditures of Federal Awards Assistance Listing Numbers: 84.027, 84.173 Type of Finding: • Significant Deficiency in Internal Control Over Compliance Compliance Requirement: Allowable Costs/Cost Principles Criteria or specific requirement: 2 CFR, Part 200, 200.303 requires an auditee to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR Part 200.403 (g) states that costs must be adequately documented to be allowable under federal awards. Condition: The District charged costs to the program which were not properly approved. Questioned Costs: None. Context: For 2 of 40 transactions selected for testing, the District was unable to provide documentation of supervisory review and approval prior to issuance of payment. Cause: The District’s procedures were not sufficient to ensure that payments were reviewed and approved prior to issuance of payment. Effect: Unallowable costs could be charged to the program if disbursements are not reviewed by a supervisor who is knowledgeable of program regulations regarding allowable costs. Recommendation: We recommend the District reviews and enhances its procedures and controls regarding payment processing to ensure that, prior to charging costs to the program, they are reviewed by a supervisor who is knowledgeable of the regulations regarding allowable program costs and that documentation of the review is maintained. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Education Federal Program: Special Education Cluster Pass-Through Agency: Massachusetts State Department of Elementary and Secondary Education Pass-Through Number(s): Various – See Schedule of Expenditures of Federal Awards Assistance Listing Numbers: 84.027, 84.173 Type of Finding: • Significant Deficiency in Internal Control Over Compliance Compliance Requirement: Allowable Costs/Cost Principles Criteria or specific requirement: 2 CFR, Part 200, 200.303 requires an auditee to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR Part 200.403 (g) states that costs must be adequately documented to be allowable under federal awards. Condition: The District charged costs to the program which were not properly approved. Questioned Costs: None. Context: For 2 of 40 transactions selected for testing, the District was unable to provide documentation of supervisory review and approval prior to issuance of payment. Cause: The District’s procedures were not sufficient to ensure that payments were reviewed and approved prior to issuance of payment. Effect: Unallowable costs could be charged to the program if disbursements are not reviewed by a supervisor who is knowledgeable of program regulations regarding allowable costs. Recommendation: We recommend the District reviews and enhances its procedures and controls regarding payment processing to ensure that, prior to charging costs to the program, they are reviewed by a supervisor who is knowledgeable of the regulations regarding allowable program costs and that documentation of the review is maintained. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Education Federal Program: Special Education Cluster Pass-Through Agency: Massachusetts State Department of Elementary and Secondary Education Pass-Through Number(s): Various – See Schedule of Expenditures of Federal Awards Assistance Listing Numbers: 84.027, 84.173 Type of Finding: • Significant Deficiency in Internal Control Over Compliance Compliance Requirement: Allowable Costs/Cost Principles Criteria or specific requirement: 2 CFR, Part 200, 200.303 requires an auditee to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR Part 200.403 (g) states that costs must be adequately documented to be allowable under federal awards. Condition: The District charged costs to the program which were not properly approved. Questioned Costs: None. Context: For 2 of 40 transactions selected for testing, the District was unable to provide documentation of supervisory review and approval prior to issuance of payment. Cause: The District’s procedures were not sufficient to ensure that payments were reviewed and approved prior to issuance of payment. Effect: Unallowable costs could be charged to the program if disbursements are not reviewed by a supervisor who is knowledgeable of program regulations regarding allowable costs. Recommendation: We recommend the District reviews and enhances its procedures and controls regarding payment processing to ensure that, prior to charging costs to the program, they are reviewed by a supervisor who is knowledgeable of the regulations regarding allowable program costs and that documentation of the review is maintained. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Education Federal Program: Special Education Cluster Pass-Through Agency: Massachusetts State Department of Elementary and Secondary Education Pass-Through Number(s): Various – See Schedule of Expenditures of Federal Awards Assistance Listing Numbers: 84.027, 84.173 Type of Finding: • Significant Deficiency in Internal Control Over Compliance Compliance Requirement: Allowable Costs/Cost Principles Criteria or specific requirement: 2 CFR, Part 200, 200.303 requires an auditee to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR Part 200.403 (g) states that costs must be adequately documented to be allowable under federal awards. Condition: The District charged costs to the program which were not properly approved. Questioned Costs: None. Context: For 2 of 40 transactions selected for testing, the District was unable to provide documentation of supervisory review and approval prior to issuance of payment. Cause: The District’s procedures were not sufficient to ensure that payments were reviewed and approved prior to issuance of payment. Effect: Unallowable costs could be charged to the program if disbursements are not reviewed by a supervisor who is knowledgeable of program regulations regarding allowable costs. Recommendation: We recommend the District reviews and enhances its procedures and controls regarding payment processing to ensure that, prior to charging costs to the program, they are reviewed by a supervisor who is knowledgeable of the regulations regarding allowable program costs and that documentation of the review is maintained. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Education Federal Program: Special Education Cluster Pass-Through Agency: Massachusetts State Department of Elementary and Secondary Education Pass-Through Number(s): Various – See Schedule of Expenditures of Federal Awards Assistance Listing Numbers: 84.027, 84.173 Type of Finding: • Significant Deficiency in Internal Control Over Compliance Compliance Requirement: Allowable Costs/Cost Principles Criteria or specific requirement: 2 CFR, Part 200, 200.303 requires an auditee to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR Part 200.403 (g) states that costs must be adequately documented to be allowable under federal awards. Condition: The District charged costs to the program which were not properly approved. Questioned Costs: None. Context: For 2 of 40 transactions selected for testing, the District was unable to provide documentation of supervisory review and approval prior to issuance of payment. Cause: The District’s procedures were not sufficient to ensure that payments were reviewed and approved prior to issuance of payment. Effect: Unallowable costs could be charged to the program if disbursements are not reviewed by a supervisor who is knowledgeable of program regulations regarding allowable costs. Recommendation: We recommend the District reviews and enhances its procedures and controls regarding payment processing to ensure that, prior to charging costs to the program, they are reviewed by a supervisor who is knowledgeable of the regulations regarding allowable program costs and that documentation of the review is maintained. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Education Federal Program: Special Education Cluster Pass-Through Agency: Massachusetts State Department of Elementary and Secondary Education Pass-Through Number(s): Various – See Schedule of Expenditures of Federal Awards Assistance Listing Numbers: 84.027, 84.173 Type of Finding: • Significant Deficiency in Internal Control Over Compliance Compliance Requirement: Allowable Costs/Cost Principles Criteria or specific requirement: 2 CFR, Part 200, 200.303 requires an auditee to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR Part 200.403 (g) states that costs must be adequately documented to be allowable under federal awards. Condition: The District charged costs to the program which were not properly approved. Questioned Costs: None. Context: For 2 of 40 transactions selected for testing, the District was unable to provide documentation of supervisory review and approval prior to issuance of payment. Cause: The District’s procedures were not sufficient to ensure that payments were reviewed and approved prior to issuance of payment. Effect: Unallowable costs could be charged to the program if disbursements are not reviewed by a supervisor who is knowledgeable of program regulations regarding allowable costs. Recommendation: We recommend the District reviews and enhances its procedures and controls regarding payment processing to ensure that, prior to charging costs to the program, they are reviewed by a supervisor who is knowledgeable of the regulations regarding allowable program costs and that documentation of the review is maintained. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Education Federal Program: Special Education Cluster Pass-Through Agency: Massachusetts State Department of Elementary and Secondary Education Pass-Through Number(s): Various – See Schedule of Expenditures of Federal Awards Assistance Listing Numbers: 84.027, 84.173 Type of Finding: • Significant Deficiency in Internal Control Over Compliance Compliance Requirement: Allowable Costs/Cost Principles Criteria or specific requirement: 2 CFR, Part 200, 200.303 requires an auditee to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR Part 200.403 (g) states that costs must be adequately documented to be allowable under federal awards. Condition: The District charged costs to the program which were not properly approved. Questioned Costs: None. Context: For 2 of 40 transactions selected for testing, the District was unable to provide documentation of supervisory review and approval prior to issuance of payment. Cause: The District’s procedures were not sufficient to ensure that payments were reviewed and approved prior to issuance of payment. Effect: Unallowable costs could be charged to the program if disbursements are not reviewed by a supervisor who is knowledgeable of program regulations regarding allowable costs. Recommendation: We recommend the District reviews and enhances its procedures and controls regarding payment processing to ensure that, prior to charging costs to the program, they are reviewed by a supervisor who is knowledgeable of the regulations regarding allowable program costs and that documentation of the review is maintained. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Education Federal Program: Special Education Cluster Pass-Through Agency: Massachusetts State Department of Elementary and Secondary Education Pass-Through Number(s): Various – See Schedule of Expenditures of Federal Awards Assistance Listing Numbers: 84.027, 84.173 Type of Finding: • Significant Deficiency in Internal Control Over Compliance Compliance Requirement: Allowable Costs/Cost Principles Criteria or specific requirement: 2 CFR, Part 200, 200.303 requires an auditee to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR Part 200.403 (g) states that costs must be adequately documented to be allowable under federal awards. Condition: The District charged costs to the program which were not properly approved. Questioned Costs: None. Context: For 2 of 40 transactions selected for testing, the District was unable to provide documentation of supervisory review and approval prior to issuance of payment. Cause: The District’s procedures were not sufficient to ensure that payments were reviewed and approved prior to issuance of payment. Effect: Unallowable costs could be charged to the program if disbursements are not reviewed by a supervisor who is knowledgeable of program regulations regarding allowable costs. Recommendation: We recommend the District reviews and enhances its procedures and controls regarding payment processing to ensure that, prior to charging costs to the program, they are reviewed by a supervisor who is knowledgeable of the regulations regarding allowable program costs and that documentation of the review is maintained. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Education Federal Program: Special Education Cluster Pass-Through Agency: Massachusetts State Department of Elementary and Secondary Education Pass-Through Number(s): Various – See Schedule of Expenditures of Federal Awards Assistance Listing Numbers: 84.027, 84.173 Type of Finding: • Significant Deficiency in Internal Control Over Compliance Compliance Requirement: Allowable Costs/Cost Principles Criteria or specific requirement: 2 CFR, Part 200, 200.303 requires an auditee to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR Part 200.403 (g) states that costs must be adequately documented to be allowable under federal awards. Condition: The District charged costs to the program which were not properly approved. Questioned Costs: None. Context: For 2 of 40 transactions selected for testing, the District was unable to provide documentation of supervisory review and approval prior to issuance of payment. Cause: The District’s procedures were not sufficient to ensure that payments were reviewed and approved prior to issuance of payment. Effect: Unallowable costs could be charged to the program if disbursements are not reviewed by a supervisor who is knowledgeable of program regulations regarding allowable costs. Recommendation: We recommend the District reviews and enhances its procedures and controls regarding payment processing to ensure that, prior to charging costs to the program, they are reviewed by a supervisor who is knowledgeable of the regulations regarding allowable program costs and that documentation of the review is maintained. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Education Federal Program: Special Education Cluster Pass-Through Agency: Massachusetts State Department of Elementary and Secondary Education Pass-Through Number(s): Various – See Schedule of Expenditures of Federal Awards Assistance Listing Numbers: 84.027, 84.173 Type of Finding: • Significant Deficiency in Internal Control Over Compliance Compliance Requirement: Allowable Costs/Cost Principles Criteria or specific requirement: 2 CFR, Part 200, 200.303 requires an auditee to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR Part 200.403 (g) states that costs must be adequately documented to be allowable under federal awards. Condition: The District charged costs to the program which were not properly approved. Questioned Costs: None. Context: For 2 of 40 transactions selected for testing, the District was unable to provide documentation of supervisory review and approval prior to issuance of payment. Cause: The District’s procedures were not sufficient to ensure that payments were reviewed and approved prior to issuance of payment. Effect: Unallowable costs could be charged to the program if disbursements are not reviewed by a supervisor who is knowledgeable of program regulations regarding allowable costs. Recommendation: We recommend the District reviews and enhances its procedures and controls regarding payment processing to ensure that, prior to charging costs to the program, they are reviewed by a supervisor who is knowledgeable of the regulations regarding allowable program costs and that documentation of the review is maintained. Views of responsible officials: There is no disagreement with the audit finding.
CRITERIA Campus management is responsible for establishing and maintaining internal controls over disbursements that are adequate to ensure that all financial activities are properly processed and reported. Additionally, the Campus is required, except where otherwise authorized by statute, to ensure costs meet the general criteria outlined in 2 CFR 200.403 in order to be allowable under federal awards, including the costs be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles. The Single Audit Reporting Package must have a report date nine months after fiscal year-end. CONDITION The Campus did not follow its Board adopted policies for federal regulations regarding disbursements to ensure all financial activities were properly processed, recorded in the appropriate fiscal year, and supported. The Campus did not provide all of the audit information for fiscal year 2021-22 in a timely manner to allow sufficient time for the audit to be completed by the deadline. CAUSE The Campus has not implemented controls over disbursement transactions. In addition, documentation was not always maintained. EFFECT The Campus was not in compliance with Board adopted policies for federal regulations and guidelines. CONTEXT The following items were noted during our review of disbursement transactions: For four of 40 disbursements reviewed, supporting documentation was not maintained. The Campus did not maintain credit card statements for all credit cards. The Campus did not maintain a complete list of credit card users to ensure possession was monitored. For six of 40 disbursements reviewed, dual signatures were not obtained when issuing the check.
CRITERIA Campus management is responsible for establishing and maintaining internal controls over disbursements that are adequate to ensure that all financial activities are properly processed and reported. Additionally, the Campus is required, except where otherwise authorized by statute, to ensure costs meet the general criteria outlined in 2 CFR 200.403 in order to be allowable under federal awards, including the costs be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles. The Single Audit Reporting Package must have a report date nine months after fiscal year-end. CONDITION The Campus did not follow its Board adopted policies for federal regulations regarding disbursements to ensure all financial activities were properly processed, recorded in the appropriate fiscal year, and supported. The Campus did not provide all of the audit information for fiscal year 2021-22 in a timely manner to allow sufficient time for the audit to be completed by the deadline. CAUSE The Campus has not implemented controls over disbursement transactions. In addition, documentation was not always maintained. EFFECT The Campus was not in compliance with Board adopted policies for federal regulations and guidelines. CONTEXT The following items were noted during our review of disbursement transactions: For four of 40 disbursements reviewed, supporting documentation was not maintained. The Campus did not maintain credit card statements for all credit cards. The Campus did not maintain a complete list of credit card users to ensure possession was monitored. For six of 40 disbursements reviewed, dual signatures were not obtained when issuing the check.
Information on Federal Program(s) - Department of Health and Human Services, Assistance Listing Number 93.498 COVID-19 - Provider Relief Fund and American Rescue Plan Rural Distribution, Schedule of Expenditures of Federal Awards Reporting Periods 2 and 3, Agency Fiscal Year-Ended June 30, 2022. Criteria – The Code of Federal Regulations Section 200.403(g) states that for costs to be allowable under Federal awards, they must be adequately documented. Pursuant to 2 CFR section 200.303(a), the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition – During our testing of direct expenditures, we noted the following exceptions: • Two of the sixty expenditures sampled did not have necessary approvals. The original invoices with approvals could not be found, however we were able to determine that the invoices were properly recorded to the general ledger. • Two of the sixty expenditures sampled did not have adequate supporting documentation. • Two of the sixty expenditures had supporting documentation that was coded to cost centers and/or accounts that were inconsistent with what was recorded in the general ledger. However, the actual postings to the general ledger were recorded to the correct cost centers and/or accounts. Cause - Policies and procedures were not appropriately adhered to in certain instances to ensure that supporting documentation was maintained correctly to evidence that costs were allowable and that an appropriate level of review and approval was completed prior to charging costs to a federal program. Effect or Potential Effect - We were unable to confirm the allowability, validity, or completeness of the two expenses lacking supporting documentation that were claimed as federal expenditures. Questioned Costs – Likely questioned costs were projected to be less than $25,000 based on the sampling procedures that were performed. Context – We tested a sample of forty direct expense transactions using a statistically valid sample and found four exceptions relating to the absence of supporting documentation and/or necessary approvals. At that point, a significant deficiency was raised and we revised our risk assessment over compliance and determined it to be high risk. We then selected an additional twenty direct expense transactions using a statistically valid sample and found two additional exceptions relating to improper adherence to certain activity level controls, however, no additional compliance deviations were identified. Views of Responsible Officials – The nature of the COVID emergency, and local shutdown orders, as well as the timing of the funding made available to prevent the viruses spread, challenged long established and effective internal control procedures. In response the Agency, under the direction of the Controller, created emergency overrides to existing protocols to be administered within the accounting department that in the cases above were not documented as they would have been under non-emergency circumstances. In order to mitigate the possible impact of these emergency overrides a detailed review for reasonableness of all items funded with the funds appropriated was performed by the Controller prior to the completion of the audit. Internal control procedures for use in future emergency situations will be developed that will address the deficiencies or challenges identified above. Recommendation - We recommend that the Agency ensure its policies and procedures are followed on a consistent basis and for emergency situations, have alternative policies and procedures that can be implemented without delay.
Finding 2022-004 Lack of Internal Controls over Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: Office of Naval Research Federal Program: Office of Naval Research Technology and Innovation Development in Alaska ALN Number: 12.300 Award Number: N00014-19-1-2030 Award Years: 2022 Type of Finding: Material Weakness over compliance and noncompliance Criteria: 2 CFR Part 200.403.g states that costs must be adequately documented in order to be allowable under Federal awards. Condition and Context: There was not an adequate system in place to track the payroll costs charged to this program. The client was unable to provide support for the salary expenses charged to this program, or support for which employees were eligible to be paid from this award, making it impossible to test transactions for allowable costs. Cause: Lack of internal control over allowable payroll transactions charged to the major program. Repeat Finding: This is not a repeat finding. Effect: The lack of supporting documentation allows for the potential for misstatement of expenditures due to employees being incorrectly charged to funding sources for which their payroll is an unallowable cost. Questioned Costs: The total amount of salary and fringe expenditures charged to the program was $749,570. Recommendation: We recommend that Launch Alaska begins to maintain documentation for employees eligible to charge to various programs, as well as maintaining documentation for tracking the payroll costs charged to each program. Management Response: Management concurs with this finding. See Corrective Action Plan.
FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Federal Communications Commission AL Number and Title: COVID-19 – 32.009 – Emergency Connectivity Fund Federal Award Number: ECF202105452 (Year: 2022) Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425U – American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D210012 (Year: 2021) Questioned Costs: $63,399 Description: A review of expenditures charged to the Emergency Connectivity Fund and Elementary and Secondary School Emergency Relief Fund programs revealed that the School District’s internal control procedures were not operating appropriately to ensure that expenditures were allowable. Background Information: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. Additionally, Congress established the Emergency Connectivity Fund (ECF) through the American Rescue Plan Act and appropriated $7.2 billion for the purchase of eligible equipment, advanced telecommunications, and information services for use by students, school staff, and library patrons at locations that include locations other than at a school or library. The ECF program provides funding to meet the remote learning needs of students, school staff, and library patrons who would otherwise lack access to connected devices and broadband connections sufficient to engage in remote learning during the COVID-19 emergency period. ECF funds totaling $491,994.00 and ESSER funds totaling $3,963,756.96 were expended and reported on the Jeff Davis County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Additionally, provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (f) Not be included as a cost or used to meet the cost sharing or matching requirements of any other federally-financed program in either the current or a prior period, (g) Be adequately documented…” Furthermore, provisions included in Title 47 CFR Section 54.1712 – Duplicate Support state that “Entities participating in the Emergency Connectivity Fund may not seek Emergency Connectivity Fund support or reimbursement for eligible equipment or services that have been purchased with or reimbursed in full from other Federal pandemic-relief funding, targeted state funding, other external sources of targeted funding or targeted gifts, or eligible for discounts from the schools and libraries universal service support mechanism or other universal service support mechanisms.” Condition: All expenditures related to the ECF program were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. It was noted that expenditures for electronic devices totaling $63,399 were approved through the budget process and recorded under the ESSER program. Upon further review, it was noted that reimbursement was requested and received through the ECF program during fiscal year 2022 and the ESSER program after year-end. Additionally, a refund of such funding had not been processed for either of the programs until the issue was pointed out by auditors. Therefore, duplicate federal funding was received for the same expenditure. Questioned Costs: Known questioned costs of $63,399 were identified for expenditures that were reimbursed through both the ECF and ESSER programs. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: In discussing these deficiencies with management, they stated that these expenditures were initially charged to the ESSER program on the general ledger. However, the director over the ECF program was unaware of this and submitted and received reimbursement through the ECF program, as well. Once this occurred, the duplicate expenditures were not removed from the ESSER program, and ESSER funding was requested in the subsequent period. Effect: The School District is not in compliance with the Uniform Guidance, the U.S. Federal Communications Commission guidance related to the ECF program, and the U.S. Department of Education guidance related to the ESSER program. Failure to ensure that appropriate controls exist to support the allowability of payments from federal programs may expose the School District to unnecessary financial strains and shortages as the grantor and/or pass-through entity may require the School District to return funds associated with the unallowable expenditures. Recommendation: The School District should review current internal control procedures related to federal program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that duplicate reimbursements are not sought from multiple federal programs for the same expenditure. Additionally, as discussed with management, the School District has initiated a refund in the amount of $63,399 to the ESSER program. Views of Responsible Officials: We concur with this finding.
FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Federal Communications Commission AL Number and Title: COVID-19 – 32.009 – Emergency Connectivity Fund Federal Award Number: ECF202105452 (Year: 2022) Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425U – American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D210012 (Year: 2021) Questioned Costs: $63,399 Description: A review of expenditures charged to the Emergency Connectivity Fund and Elementary and Secondary School Emergency Relief Fund programs revealed that the School District’s internal control procedures were not operating appropriately to ensure that expenditures were allowable. Background Information: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. Additionally, Congress established the Emergency Connectivity Fund (ECF) through the American Rescue Plan Act and appropriated $7.2 billion for the purchase of eligible equipment, advanced telecommunications, and information services for use by students, school staff, and library patrons at locations that include locations other than at a school or library. The ECF program provides funding to meet the remote learning needs of students, school staff, and library patrons who would otherwise lack access to connected devices and broadband connections sufficient to engage in remote learning during the COVID-19 emergency period. ECF funds totaling $491,994.00 and ESSER funds totaling $3,963,756.96 were expended and reported on the Jeff Davis County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Additionally, provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (f) Not be included as a cost or used to meet the cost sharing or matching requirements of any other federally-financed program in either the current or a prior period, (g) Be adequately documented…” Furthermore, provisions included in Title 47 CFR Section 54.1712 – Duplicate Support state that “Entities participating in the Emergency Connectivity Fund may not seek Emergency Connectivity Fund support or reimbursement for eligible equipment or services that have been purchased with or reimbursed in full from other Federal pandemic-relief funding, targeted state funding, other external sources of targeted funding or targeted gifts, or eligible for discounts from the schools and libraries universal service support mechanism or other universal service support mechanisms.” Condition: All expenditures related to the ECF program were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. It was noted that expenditures for electronic devices totaling $63,399 were approved through the budget process and recorded under the ESSER program. Upon further review, it was noted that reimbursement was requested and received through the ECF program during fiscal year 2022 and the ESSER program after year-end. Additionally, a refund of such funding had not been processed for either of the programs until the issue was pointed out by auditors. Therefore, duplicate federal funding was received for the same expenditure. Questioned Costs: Known questioned costs of $63,399 were identified for expenditures that were reimbursed through both the ECF and ESSER programs. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: In discussing these deficiencies with management, they stated that these expenditures were initially charged to the ESSER program on the general ledger. However, the director over the ECF program was unaware of this and submitted and received reimbursement through the ECF program, as well. Once this occurred, the duplicate expenditures were not removed from the ESSER program, and ESSER funding was requested in the subsequent period. Effect: The School District is not in compliance with the Uniform Guidance, the U.S. Federal Communications Commission guidance related to the ECF program, and the U.S. Department of Education guidance related to the ESSER program. Failure to ensure that appropriate controls exist to support the allowability of payments from federal programs may expose the School District to unnecessary financial strains and shortages as the grantor and/or pass-through entity may require the School District to return funds associated with the unallowable expenditures. Recommendation: The School District should review current internal control procedures related to federal program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that duplicate reimbursements are not sought from multiple federal programs for the same expenditure. Additionally, as discussed with management, the School District has initiated a refund in the amount of $63,399 to the ESSER program. Views of Responsible Officials: We concur with this finding.
FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Federal Communications Commission AL Number and Title: COVID-19 – 32.009 – Emergency Connectivity Fund Federal Award Number: ECF202105452 (Year: 2022) Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425U – American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D210012 (Year: 2021) Questioned Costs: $63,399 Description: A review of expenditures charged to the Emergency Connectivity Fund and Elementary and Secondary School Emergency Relief Fund programs revealed that the School District’s internal control procedures were not operating appropriately to ensure that expenditures were allowable. Background Information: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. Additionally, Congress established the Emergency Connectivity Fund (ECF) through the American Rescue Plan Act and appropriated $7.2 billion for the purchase of eligible equipment, advanced telecommunications, and information services for use by students, school staff, and library patrons at locations that include locations other than at a school or library. The ECF program provides funding to meet the remote learning needs of students, school staff, and library patrons who would otherwise lack access to connected devices and broadband connections sufficient to engage in remote learning during the COVID-19 emergency period. ECF funds totaling $491,994.00 and ESSER funds totaling $3,963,756.96 were expended and reported on the Jeff Davis County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Additionally, provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (f) Not be included as a cost or used to meet the cost sharing or matching requirements of any other federally-financed program in either the current or a prior period, (g) Be adequately documented…” Furthermore, provisions included in Title 47 CFR Section 54.1712 – Duplicate Support state that “Entities participating in the Emergency Connectivity Fund may not seek Emergency Connectivity Fund support or reimbursement for eligible equipment or services that have been purchased with or reimbursed in full from other Federal pandemic-relief funding, targeted state funding, other external sources of targeted funding or targeted gifts, or eligible for discounts from the schools and libraries universal service support mechanism or other universal service support mechanisms.” Condition: All expenditures related to the ECF program were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. It was noted that expenditures for electronic devices totaling $63,399 were approved through the budget process and recorded under the ESSER program. Upon further review, it was noted that reimbursement was requested and received through the ECF program during fiscal year 2022 and the ESSER program after year-end. Additionally, a refund of such funding had not been processed for either of the programs until the issue was pointed out by auditors. Therefore, duplicate federal funding was received for the same expenditure. Questioned Costs: Known questioned costs of $63,399 were identified for expenditures that were reimbursed through both the ECF and ESSER programs. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: In discussing these deficiencies with management, they stated that these expenditures were initially charged to the ESSER program on the general ledger. However, the director over the ECF program was unaware of this and submitted and received reimbursement through the ECF program, as well. Once this occurred, the duplicate expenditures were not removed from the ESSER program, and ESSER funding was requested in the subsequent period. Effect: The School District is not in compliance with the Uniform Guidance, the U.S. Federal Communications Commission guidance related to the ECF program, and the U.S. Department of Education guidance related to the ESSER program. Failure to ensure that appropriate controls exist to support the allowability of payments from federal programs may expose the School District to unnecessary financial strains and shortages as the grantor and/or pass-through entity may require the School District to return funds associated with the unallowable expenditures. Recommendation: The School District should review current internal control procedures related to federal program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that duplicate reimbursements are not sought from multiple federal programs for the same expenditure. Additionally, as discussed with management, the School District has initiated a refund in the amount of $63,399 to the ESSER program. Views of Responsible Officials: We concur with this finding.
FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Period of Performance Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425C – Coronavirus Aid, Relief and Economic Security Act – Governor’s Emergency Education Relief Fund COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425U – American Rescue Plan Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425W – American Rescue Plan Elementary and Secondary School Emergency Relief Fund – Homeless Children and Youth Federal Award Numbers: S425C210012 (Year: 2021), S425D200012 (Year: 2020), S425D210012 (Year: 2021), S425U210012 (Year: 2021) S425W210011 (Year: 2021) Questioned Costs: $101,681 Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund program revealed that the School District’s internal control procedures were not operating appropriately to ensure that expenditures were allowable for the program. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $6,346,257 were expended and reported on the Brooks County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented… (h) Cost must be incurred during the approved budget period…” Additionally, provisions included in the Uniform Guidance, Section 200.77 state, “Period of performance means the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award.” Further, to assist school districts in improving their financial management systems and associated compliance over federal programs, GaDOE published the Financial Management for Georgia Local Units of Administration (FMGLUA) manual. The FMGLUA manual requires that LEAs submit a budget as part of each federal program’s Consolidated Application process. The program budget reflects details regarding the manner in which each school district intends to expend the program funds. The Consolidated Application, including the budget, for each program must be reviewed and approved by GaDOE personnel before the LEA is authorized to expend program funds. Amendments to the budget are to be submitted to and approved by GaDOE when a school district intends to spend funds in a manner not initially reported. Lastly, LEA personnel must also provide program-specific assurances related to the ESSER program within the Consolidated Application system. These assurances are reflected in the Uniform Guidance, Section 200.415 – Required Certifications, and include provisions that require LEAs “to assure that expenditures are proper and in accordance with the terms and conditions of the Federal award and approved project budgets...” Condition: A sample of 60 non-personal services expenditures was randomly selected for testing using a nonstatistical sampling approach. In addition, seven individually significant items were selected for testing. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. It was noted that subscription charges related to learning software were prepaid for a five-year period. Because the period of performance for this funding ends on September 30, 2024 and the liquidation period for the program ends 120 days thereafter, it was determined that $85,681 of these expenditures were unallowable as the amounts were incurred after the period of performance and School District personnel did not maintain appropriate documentation to evidence its analysis leading to the decision to enter into the multi-year contract as required by ED. Additionally, a sample of 60 personal services expenditures was randomly selected for testing using a non-statistical sampling approach. Two individually significant items were also selected for testing. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. It was noted that eight employees were paid a $2,000 bonus, which totaled $16,000, that was not approved by GaDOE through the Consolidated Application process, as required. Questioned Costs: Upon testing a sample of $444,121 in personal services expenditures, known questioned costs of $16,000 were identified. Using the total personal services expenditures population of $1,560,088, we project the likely questioned costs to be approximately $56,204. In addition, known questioned costs of $85,681 were also identified for non-personal services expenditures that were not tested as part of a sample and were not incurred during the appropriate period. Therefore, the known and likely questioned costs identified for all unallowable payments totaled $101,681 and $56,204, respectively. Cause: In discussing these deficiencies with management, they stated that unallowable bonuses paid were due to human error since they were intended to be paid from QBE funds in Fund 100. In addition, management was unaware of the documentation requirements for the multi-year service agreements that extend beyond the period of performance. Effect: The School District is not in compliance with the Uniform Guidance or GaDOE guidance related to the ESSER program. Additionally, failure to verify compliance with applicable policies and regulations, including reviewing approved budgets prior to the expenditure of federal program funds and ensuring that expenditures are incurred for a necessary and reasonable purpose and within the appropriate period of performance, may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unapproved and unallowable expenditures. Recommendation: The School District should develop and/or modify its policies and procedures to ensure that potential expenditures are approved through the Consolidated Application process, fall within the respective federal program’s period of performance, and are deemed to be allowable before spending federal funds. Further, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.
FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Period of Performance Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425C – Coronavirus Aid, Relief and Economic Security Act – Governor’s Emergency Education Relief Fund COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425U – American Rescue Plan Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425W – American Rescue Plan Elementary and Secondary School Emergency Relief Fund – Homeless Children and Youth Federal Award Numbers: S425C210012 (Year: 2021), S425D200012 (Year: 2020), S425D210012 (Year: 2021), S425U210012 (Year: 2021) S425W210011 (Year: 2021) Questioned Costs: $101,681 Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund program revealed that the School District’s internal control procedures were not operating appropriately to ensure that expenditures were allowable for the program. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $6,346,257 were expended and reported on the Brooks County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented… (h) Cost must be incurred during the approved budget period…” Additionally, provisions included in the Uniform Guidance, Section 200.77 state, “Period of performance means the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award.” Further, to assist school districts in improving their financial management systems and associated compliance over federal programs, GaDOE published the Financial Management for Georgia Local Units of Administration (FMGLUA) manual. The FMGLUA manual requires that LEAs submit a budget as part of each federal program’s Consolidated Application process. The program budget reflects details regarding the manner in which each school district intends to expend the program funds. The Consolidated Application, including the budget, for each program must be reviewed and approved by GaDOE personnel before the LEA is authorized to expend program funds. Amendments to the budget are to be submitted to and approved by GaDOE when a school district intends to spend funds in a manner not initially reported. Lastly, LEA personnel must also provide program-specific assurances related to the ESSER program within the Consolidated Application system. These assurances are reflected in the Uniform Guidance, Section 200.415 – Required Certifications, and include provisions that require LEAs “to assure that expenditures are proper and in accordance with the terms and conditions of the Federal award and approved project budgets...” Condition: A sample of 60 non-personal services expenditures was randomly selected for testing using a nonstatistical sampling approach. In addition, seven individually significant items were selected for testing. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. It was noted that subscription charges related to learning software were prepaid for a five-year period. Because the period of performance for this funding ends on September 30, 2024 and the liquidation period for the program ends 120 days thereafter, it was determined that $85,681 of these expenditures were unallowable as the amounts were incurred after the period of performance and School District personnel did not maintain appropriate documentation to evidence its analysis leading to the decision to enter into the multi-year contract as required by ED. Additionally, a sample of 60 personal services expenditures was randomly selected for testing using a non-statistical sampling approach. Two individually significant items were also selected for testing. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. It was noted that eight employees were paid a $2,000 bonus, which totaled $16,000, that was not approved by GaDOE through the Consolidated Application process, as required. Questioned Costs: Upon testing a sample of $444,121 in personal services expenditures, known questioned costs of $16,000 were identified. Using the total personal services expenditures population of $1,560,088, we project the likely questioned costs to be approximately $56,204. In addition, known questioned costs of $85,681 were also identified for non-personal services expenditures that were not tested as part of a sample and were not incurred during the appropriate period. Therefore, the known and likely questioned costs identified for all unallowable payments totaled $101,681 and $56,204, respectively. Cause: In discussing these deficiencies with management, they stated that unallowable bonuses paid were due to human error since they were intended to be paid from QBE funds in Fund 100. In addition, management was unaware of the documentation requirements for the multi-year service agreements that extend beyond the period of performance. Effect: The School District is not in compliance with the Uniform Guidance or GaDOE guidance related to the ESSER program. Additionally, failure to verify compliance with applicable policies and regulations, including reviewing approved budgets prior to the expenditure of federal program funds and ensuring that expenditures are incurred for a necessary and reasonable purpose and within the appropriate period of performance, may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unapproved and unallowable expenditures. Recommendation: The School District should develop and/or modify its policies and procedures to ensure that potential expenditures are approved through the Consolidated Application process, fall within the respective federal program’s period of performance, and are deemed to be allowable before spending federal funds. Further, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.
FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Period of Performance Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425C – Coronavirus Aid, Relief and Economic Security Act – Governor’s Emergency Education Relief Fund COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425U – American Rescue Plan Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425W – American Rescue Plan Elementary and Secondary School Emergency Relief Fund – Homeless Children and Youth Federal Award Numbers: S425C210012 (Year: 2021), S425D200012 (Year: 2020), S425D210012 (Year: 2021), S425U210012 (Year: 2021) S425W210011 (Year: 2021) Questioned Costs: $101,681 Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund program revealed that the School District’s internal control procedures were not operating appropriately to ensure that expenditures were allowable for the program. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $6,346,257 were expended and reported on the Brooks County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented… (h) Cost must be incurred during the approved budget period…” Additionally, provisions included in the Uniform Guidance, Section 200.77 state, “Period of performance means the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award.” Further, to assist school districts in improving their financial management systems and associated compliance over federal programs, GaDOE published the Financial Management for Georgia Local Units of Administration (FMGLUA) manual. The FMGLUA manual requires that LEAs submit a budget as part of each federal program’s Consolidated Application process. The program budget reflects details regarding the manner in which each school district intends to expend the program funds. The Consolidated Application, including the budget, for each program must be reviewed and approved by GaDOE personnel before the LEA is authorized to expend program funds. Amendments to the budget are to be submitted to and approved by GaDOE when a school district intends to spend funds in a manner not initially reported. Lastly, LEA personnel must also provide program-specific assurances related to the ESSER program within the Consolidated Application system. These assurances are reflected in the Uniform Guidance, Section 200.415 – Required Certifications, and include provisions that require LEAs “to assure that expenditures are proper and in accordance with the terms and conditions of the Federal award and approved project budgets...” Condition: A sample of 60 non-personal services expenditures was randomly selected for testing using a nonstatistical sampling approach. In addition, seven individually significant items were selected for testing. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. It was noted that subscription charges related to learning software were prepaid for a five-year period. Because the period of performance for this funding ends on September 30, 2024 and the liquidation period for the program ends 120 days thereafter, it was determined that $85,681 of these expenditures were unallowable as the amounts were incurred after the period of performance and School District personnel did not maintain appropriate documentation to evidence its analysis leading to the decision to enter into the multi-year contract as required by ED. Additionally, a sample of 60 personal services expenditures was randomly selected for testing using a non-statistical sampling approach. Two individually significant items were also selected for testing. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. It was noted that eight employees were paid a $2,000 bonus, which totaled $16,000, that was not approved by GaDOE through the Consolidated Application process, as required. Questioned Costs: Upon testing a sample of $444,121 in personal services expenditures, known questioned costs of $16,000 were identified. Using the total personal services expenditures population of $1,560,088, we project the likely questioned costs to be approximately $56,204. In addition, known questioned costs of $85,681 were also identified for non-personal services expenditures that were not tested as part of a sample and were not incurred during the appropriate period. Therefore, the known and likely questioned costs identified for all unallowable payments totaled $101,681 and $56,204, respectively. Cause: In discussing these deficiencies with management, they stated that unallowable bonuses paid were due to human error since they were intended to be paid from QBE funds in Fund 100. In addition, management was unaware of the documentation requirements for the multi-year service agreements that extend beyond the period of performance. Effect: The School District is not in compliance with the Uniform Guidance or GaDOE guidance related to the ESSER program. Additionally, failure to verify compliance with applicable policies and regulations, including reviewing approved budgets prior to the expenditure of federal program funds and ensuring that expenditures are incurred for a necessary and reasonable purpose and within the appropriate period of performance, may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unapproved and unallowable expenditures. Recommendation: The School District should develop and/or modify its policies and procedures to ensure that potential expenditures are approved through the Consolidated Application process, fall within the respective federal program’s period of performance, and are deemed to be allowable before spending federal funds. Further, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.
FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Period of Performance Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425C – Coronavirus Aid, Relief and Economic Security Act – Governor’s Emergency Education Relief Fund COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425U – American Rescue Plan Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425W – American Rescue Plan Elementary and Secondary School Emergency Relief Fund – Homeless Children and Youth Federal Award Numbers: S425C210012 (Year: 2021), S425D200012 (Year: 2020), S425D210012 (Year: 2021), S425U210012 (Year: 2021) S425W210011 (Year: 2021) Questioned Costs: $101,681 Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund program revealed that the School District’s internal control procedures were not operating appropriately to ensure that expenditures were allowable for the program. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $6,346,257 were expended and reported on the Brooks County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented… (h) Cost must be incurred during the approved budget period…” Additionally, provisions included in the Uniform Guidance, Section 200.77 state, “Period of performance means the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award.” Further, to assist school districts in improving their financial management systems and associated compliance over federal programs, GaDOE published the Financial Management for Georgia Local Units of Administration (FMGLUA) manual. The FMGLUA manual requires that LEAs submit a budget as part of each federal program’s Consolidated Application process. The program budget reflects details regarding the manner in which each school district intends to expend the program funds. The Consolidated Application, including the budget, for each program must be reviewed and approved by GaDOE personnel before the LEA is authorized to expend program funds. Amendments to the budget are to be submitted to and approved by GaDOE when a school district intends to spend funds in a manner not initially reported. Lastly, LEA personnel must also provide program-specific assurances related to the ESSER program within the Consolidated Application system. These assurances are reflected in the Uniform Guidance, Section 200.415 – Required Certifications, and include provisions that require LEAs “to assure that expenditures are proper and in accordance with the terms and conditions of the Federal award and approved project budgets...” Condition: A sample of 60 non-personal services expenditures was randomly selected for testing using a nonstatistical sampling approach. In addition, seven individually significant items were selected for testing. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. It was noted that subscription charges related to learning software were prepaid for a five-year period. Because the period of performance for this funding ends on September 30, 2024 and the liquidation period for the program ends 120 days thereafter, it was determined that $85,681 of these expenditures were unallowable as the amounts were incurred after the period of performance and School District personnel did not maintain appropriate documentation to evidence its analysis leading to the decision to enter into the multi-year contract as required by ED. Additionally, a sample of 60 personal services expenditures was randomly selected for testing using a non-statistical sampling approach. Two individually significant items were also selected for testing. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. It was noted that eight employees were paid a $2,000 bonus, which totaled $16,000, that was not approved by GaDOE through the Consolidated Application process, as required. Questioned Costs: Upon testing a sample of $444,121 in personal services expenditures, known questioned costs of $16,000 were identified. Using the total personal services expenditures population of $1,560,088, we project the likely questioned costs to be approximately $56,204. In addition, known questioned costs of $85,681 were also identified for non-personal services expenditures that were not tested as part of a sample and were not incurred during the appropriate period. Therefore, the known and likely questioned costs identified for all unallowable payments totaled $101,681 and $56,204, respectively. Cause: In discussing these deficiencies with management, they stated that unallowable bonuses paid were due to human error since they were intended to be paid from QBE funds in Fund 100. In addition, management was unaware of the documentation requirements for the multi-year service agreements that extend beyond the period of performance. Effect: The School District is not in compliance with the Uniform Guidance or GaDOE guidance related to the ESSER program. Additionally, failure to verify compliance with applicable policies and regulations, including reviewing approved budgets prior to the expenditure of federal program funds and ensuring that expenditures are incurred for a necessary and reasonable purpose and within the appropriate period of performance, may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unapproved and unallowable expenditures. Recommendation: The School District should develop and/or modify its policies and procedures to ensure that potential expenditures are approved through the Consolidated Application process, fall within the respective federal program’s period of performance, and are deemed to be allowable before spending federal funds. Further, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.
FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Period of Performance Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425C – Coronavirus Aid, Relief and Economic Security Act – Governor’s Emergency Education Relief Fund COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425U – American Rescue Plan Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425W – American Rescue Plan Elementary and Secondary School Emergency Relief Fund – Homeless Children and Youth Federal Award Numbers: S425C210012 (Year: 2021), S425D200012 (Year: 2020), S425D210012 (Year: 2021), S425U210012 (Year: 2021) S425W210011 (Year: 2021) Questioned Costs: $101,681 Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund program revealed that the School District’s internal control procedures were not operating appropriately to ensure that expenditures were allowable for the program. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $6,346,257 were expended and reported on the Brooks County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented… (h) Cost must be incurred during the approved budget period…” Additionally, provisions included in the Uniform Guidance, Section 200.77 state, “Period of performance means the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award.” Further, to assist school districts in improving their financial management systems and associated compliance over federal programs, GaDOE published the Financial Management for Georgia Local Units of Administration (FMGLUA) manual. The FMGLUA manual requires that LEAs submit a budget as part of each federal program’s Consolidated Application process. The program budget reflects details regarding the manner in which each school district intends to expend the program funds. The Consolidated Application, including the budget, for each program must be reviewed and approved by GaDOE personnel before the LEA is authorized to expend program funds. Amendments to the budget are to be submitted to and approved by GaDOE when a school district intends to spend funds in a manner not initially reported. Lastly, LEA personnel must also provide program-specific assurances related to the ESSER program within the Consolidated Application system. These assurances are reflected in the Uniform Guidance, Section 200.415 – Required Certifications, and include provisions that require LEAs “to assure that expenditures are proper and in accordance with the terms and conditions of the Federal award and approved project budgets...” Condition: A sample of 60 non-personal services expenditures was randomly selected for testing using a nonstatistical sampling approach. In addition, seven individually significant items were selected for testing. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. It was noted that subscription charges related to learning software were prepaid for a five-year period. Because the period of performance for this funding ends on September 30, 2024 and the liquidation period for the program ends 120 days thereafter, it was determined that $85,681 of these expenditures were unallowable as the amounts were incurred after the period of performance and School District personnel did not maintain appropriate documentation to evidence its analysis leading to the decision to enter into the multi-year contract as required by ED. Additionally, a sample of 60 personal services expenditures was randomly selected for testing using a non-statistical sampling approach. Two individually significant items were also selected for testing. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. It was noted that eight employees were paid a $2,000 bonus, which totaled $16,000, that was not approved by GaDOE through the Consolidated Application process, as required. Questioned Costs: Upon testing a sample of $444,121 in personal services expenditures, known questioned costs of $16,000 were identified. Using the total personal services expenditures population of $1,560,088, we project the likely questioned costs to be approximately $56,204. In addition, known questioned costs of $85,681 were also identified for non-personal services expenditures that were not tested as part of a sample and were not incurred during the appropriate period. Therefore, the known and likely questioned costs identified for all unallowable payments totaled $101,681 and $56,204, respectively. Cause: In discussing these deficiencies with management, they stated that unallowable bonuses paid were due to human error since they were intended to be paid from QBE funds in Fund 100. In addition, management was unaware of the documentation requirements for the multi-year service agreements that extend beyond the period of performance. Effect: The School District is not in compliance with the Uniform Guidance or GaDOE guidance related to the ESSER program. Additionally, failure to verify compliance with applicable policies and regulations, including reviewing approved budgets prior to the expenditure of federal program funds and ensuring that expenditures are incurred for a necessary and reasonable purpose and within the appropriate period of performance, may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unapproved and unallowable expenditures. Recommendation: The School District should develop and/or modify its policies and procedures to ensure that potential expenditures are approved through the Consolidated Application process, fall within the respective federal program’s period of performance, and are deemed to be allowable before spending federal funds. Further, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.
Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. Condition: For 8 of the 60 samples selected, EmployIndy was unable to reconcile the provided support to the selection amounts. As a result, we were unable to determine the allowability of these sample selections under the WIOA grant. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $265,000 of known questioned costs as this is the amount of the WIOA expenditures tested that could not be reconciled to source documents. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, Crowe was unable to reconcile and tie 8 of the 60 samples to source documents after multiple attempts of asking management to aid in reconciling the support to selection totals. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.
Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. Condition: For 8 of the 60 samples selected, EmployIndy was unable to reconcile the provided support to the selection amounts. As a result, we were unable to determine the allowability of these sample selections under the WIOA grant. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $265,000 of known questioned costs as this is the amount of the WIOA expenditures tested that could not be reconciled to source documents. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, Crowe was unable to reconcile and tie 8 of the 60 samples to source documents after multiple attempts of asking management to aid in reconciling the support to selection totals. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.
Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. Condition: For 8 of the 60 samples selected, EmployIndy was unable to reconcile the provided support to the selection amounts. As a result, we were unable to determine the allowability of these sample selections under the WIOA grant. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $265,000 of known questioned costs as this is the amount of the WIOA expenditures tested that could not be reconciled to source documents. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, Crowe was unable to reconcile and tie 8 of the 60 samples to source documents after multiple attempts of asking management to aid in reconciling the support to selection totals. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.
Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. Condition: For 8 of the 60 samples selected, EmployIndy was unable to reconcile the provided support to the selection amounts. As a result, we were unable to determine the allowability of these sample selections under the WIOA grant. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $265,000 of known questioned costs as this is the amount of the WIOA expenditures tested that could not be reconciled to source documents. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, Crowe was unable to reconcile and tie 8 of the 60 samples to source documents after multiple attempts of asking management to aid in reconciling the support to selection totals. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.
Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. Condition: EmployIndy did not formally review and approve 16 selected WIOA non-payroll expenditures in a sample of 60 to determine that they are allowable under the WIOA federal regulations. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are no questioned costs. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified recurring monthly expenditures that are not formally reviewed by management for allowability under the WIOA grant. We also identified expenditures submitted to EmployIndy by service providers that did not have a formal sign-off/review by EmployIndy management appropriately allocating these expenses to the WIOA grant. We noted that 16 of the 60 non-payroll items selected for testing did not have appropriate documented review. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.
Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. Condition: EmployIndy did not formally review and approve 16 selected WIOA non-payroll expenditures in a sample of 60 to determine that they are allowable under the WIOA federal regulations. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are no questioned costs. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified recurring monthly expenditures that are not formally reviewed by management for allowability under the WIOA grant. We also identified expenditures submitted to EmployIndy by service providers that did not have a formal sign-off/review by EmployIndy management appropriately allocating these expenses to the WIOA grant. We noted that 16 of the 60 non-payroll items selected for testing did not have appropriate documented review. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.
Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. Condition: EmployIndy did not formally review and approve 16 selected WIOA non-payroll expenditures in a sample of 60 to determine that they are allowable under the WIOA federal regulations. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are no questioned costs. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified recurring monthly expenditures that are not formally reviewed by management for allowability under the WIOA grant. We also identified expenditures submitted to EmployIndy by service providers that did not have a formal sign-off/review by EmployIndy management appropriately allocating these expenses to the WIOA grant. We noted that 16 of the 60 non-payroll items selected for testing did not have appropriate documented review. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.
Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. Condition: EmployIndy did not formally review and approve 16 selected WIOA non-payroll expenditures in a sample of 60 to determine that they are allowable under the WIOA federal regulations. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are no questioned costs. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified recurring monthly expenditures that are not formally reviewed by management for allowability under the WIOA grant. We also identified expenditures submitted to EmployIndy by service providers that did not have a formal sign-off/review by EmployIndy management appropriately allocating these expenses to the WIOA grant. We noted that 16 of the 60 non-payroll items selected for testing did not have appropriate documented review. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.
Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. Condition: EmployIndy did not retain up-to-date contracts for 5 out of 8 employees tested and was unable to reconcile fund codes and employee payroll charged to the WIOA grant. It was also noted that for 8 out of 13 timecards selected for testing, it did not appear that the time was approved to be recorded to the WIOA grant. Cause: The condition was caused by a lack of internal controls over EmployIndy administrative payroll processing. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $23,000 of known questioned costs related to this issue. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified several payroll expenditures charged to the WIOA cluster for which valid contracts were not provided, employee time records did not reflect hours spent on WIOA activities, and reconciliations for the allocation of employee payroll to WIOA were not provided. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.
Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. Condition: EmployIndy did not retain up-to-date contracts for 5 out of 8 employees tested and was unable to reconcile fund codes and employee payroll charged to the WIOA grant. It was also noted that for 8 out of 13 timecards selected for testing, it did not appear that the time was approved to be recorded to the WIOA grant. Cause: The condition was caused by a lack of internal controls over EmployIndy administrative payroll processing. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $23,000 of known questioned costs related to this issue. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified several payroll expenditures charged to the WIOA cluster for which valid contracts were not provided, employee time records did not reflect hours spent on WIOA activities, and reconciliations for the allocation of employee payroll to WIOA were not provided. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.
Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. Condition: EmployIndy did not retain up-to-date contracts for 5 out of 8 employees tested and was unable to reconcile fund codes and employee payroll charged to the WIOA grant. It was also noted that for 8 out of 13 timecards selected for testing, it did not appear that the time was approved to be recorded to the WIOA grant. Cause: The condition was caused by a lack of internal controls over EmployIndy administrative payroll processing. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $23,000 of known questioned costs related to this issue. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified several payroll expenditures charged to the WIOA cluster for which valid contracts were not provided, employee time records did not reflect hours spent on WIOA activities, and reconciliations for the allocation of employee payroll to WIOA were not provided. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.
Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. Condition: EmployIndy did not retain up-to-date contracts for 5 out of 8 employees tested and was unable to reconcile fund codes and employee payroll charged to the WIOA grant. It was also noted that for 8 out of 13 timecards selected for testing, it did not appear that the time was approved to be recorded to the WIOA grant. Cause: The condition was caused by a lack of internal controls over EmployIndy administrative payroll processing. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $23,000 of known questioned costs related to this issue. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified several payroll expenditures charged to the WIOA cluster for which valid contracts were not provided, employee time records did not reflect hours spent on WIOA activities, and reconciliations for the allocation of employee payroll to WIOA were not provided. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.
FA 2022-001 Strengthen Budgetary Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425U – American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D200012 (Year: 2020), S425D210012 (Year: 2021), S425U210012 (Year: 2021), Questioned Costs: $31,131 Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund program revealed instances in which expenditures had not been properly approved by the pass-through entity. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $790,945 were expended and reported on the Calhoun County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Additionally, provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Furthermore, to assist school districts in improving their financial management systems and associated compliance over federal programs, GaDOE published the Financial Management for Georgia Local Units of Administration (FMGLUA) manual. The FMGLUA manual requires that LEAs submit a budget as part of each federal program’s Consolidated Application process. The program budget reflects details regarding the manner in which each school district intends to expend the program funds. The Consolidated Application, including the budget, for each program must be reviewed and approved by GaDOE personnel before the LEA is authorized to expend program funds. Amendments to the budget are to be submitted to and approved by GaDOE when a school district intends to spend funds in a manner not initially reported. Lastly, LEA personnel must also provide program-specific assurances related to the ESSER program within the Consolidated Application system. These assurances are reflected in the Uniform Guidance, Section 200.415 – Required Certifications, and include provisions that require LEAs “to assure that expenditures are proper and in accordance with the terms and conditions of the Federal award and approved project budgets...” Condition: A sample of 25 expenditures was randomly selected for testing using a non-statistical sampling approach. In addition, seven individually significant expenditures were selected for testing. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. It was noted that prior approval was not obtained from GaDOE for nine expenditures totaling $31,131 as these expenditures were not reflected in the approved budget or subsequent amendments within the Consolidated Application system as required. Questioned Costs: Upon testing a sample of $14,677 in nonpersonal services expenditures, known questioned costs of $10,136 were identified for expenditures not properly approved through the Consolidated Application process. Using the population being sampled, which totaled $201,966, we project the likely questioned costs to be approximately $139,475. In addition, known questioned costs identified for unapproved payments associated with individually significant items tested totaled $20,995; therefore, the known and likely questioned costs identified for all unallowable payments throughout the sample and individually significant items tested totaled $31,131 and $139,475, respectively. Cause: In discussing these deficiencies with management, the School District believed that the Consolidated Application included the unallowable items purchased; however, the description reflected on the Consolidated Application did not agree to the items purchased. In addition, management was unaware that Consolidated Application was not approved by the GaDOE. Effect: The School District is not in compliance with the Uniform Guidance or GaDOE guidance related to the ESSER program. Failure to accurately develop and amend budget information through the Consolidated Application process and verify compliance with applicable policies and regulations prior to the expenditure of federal program funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unapproved and unallowable expenditures. Recommendation: The School District should revise current internal control procedures related to the ESSER program. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that potential expenditures are approved through the Consolidated Application process and deemed to be allowable before spending federal funds. In addition, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.
FA 2022-001 Strengthen Budgetary Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425U – American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D200012 (Year: 2020), S425D210012 (Year: 2021), S425U210012 (Year: 2021), Questioned Costs: $31,131 Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund program revealed instances in which expenditures had not been properly approved by the pass-through entity. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $790,945 were expended and reported on the Calhoun County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Additionally, provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Furthermore, to assist school districts in improving their financial management systems and associated compliance over federal programs, GaDOE published the Financial Management for Georgia Local Units of Administration (FMGLUA) manual. The FMGLUA manual requires that LEAs submit a budget as part of each federal program’s Consolidated Application process. The program budget reflects details regarding the manner in which each school district intends to expend the program funds. The Consolidated Application, including the budget, for each program must be reviewed and approved by GaDOE personnel before the LEA is authorized to expend program funds. Amendments to the budget are to be submitted to and approved by GaDOE when a school district intends to spend funds in a manner not initially reported. Lastly, LEA personnel must also provide program-specific assurances related to the ESSER program within the Consolidated Application system. These assurances are reflected in the Uniform Guidance, Section 200.415 – Required Certifications, and include provisions that require LEAs “to assure that expenditures are proper and in accordance with the terms and conditions of the Federal award and approved project budgets...” Condition: A sample of 25 expenditures was randomly selected for testing using a non-statistical sampling approach. In addition, seven individually significant expenditures were selected for testing. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. It was noted that prior approval was not obtained from GaDOE for nine expenditures totaling $31,131 as these expenditures were not reflected in the approved budget or subsequent amendments within the Consolidated Application system as required. Questioned Costs: Upon testing a sample of $14,677 in nonpersonal services expenditures, known questioned costs of $10,136 were identified for expenditures not properly approved through the Consolidated Application process. Using the population being sampled, which totaled $201,966, we project the likely questioned costs to be approximately $139,475. In addition, known questioned costs identified for unapproved payments associated with individually significant items tested totaled $20,995; therefore, the known and likely questioned costs identified for all unallowable payments throughout the sample and individually significant items tested totaled $31,131 and $139,475, respectively. Cause: In discussing these deficiencies with management, the School District believed that the Consolidated Application included the unallowable items purchased; however, the description reflected on the Consolidated Application did not agree to the items purchased. In addition, management was unaware that Consolidated Application was not approved by the GaDOE. Effect: The School District is not in compliance with the Uniform Guidance or GaDOE guidance related to the ESSER program. Failure to accurately develop and amend budget information through the Consolidated Application process and verify compliance with applicable policies and regulations prior to the expenditure of federal program funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unapproved and unallowable expenditures. Recommendation: The School District should revise current internal control procedures related to the ESSER program. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that potential expenditures are approved through the Consolidated Application process and deemed to be allowable before spending federal funds. In addition, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.
FA 2022-001 Strengthen Budgetary Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425U – American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D200012 (Year: 2020), S425D210012 (Year: 2021), S425U210012 (Year: 2021), Questioned Costs: $31,131 Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund program revealed instances in which expenditures had not been properly approved by the pass-through entity. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $790,945 were expended and reported on the Calhoun County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Additionally, provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Furthermore, to assist school districts in improving their financial management systems and associated compliance over federal programs, GaDOE published the Financial Management for Georgia Local Units of Administration (FMGLUA) manual. The FMGLUA manual requires that LEAs submit a budget as part of each federal program’s Consolidated Application process. The program budget reflects details regarding the manner in which each school district intends to expend the program funds. The Consolidated Application, including the budget, for each program must be reviewed and approved by GaDOE personnel before the LEA is authorized to expend program funds. Amendments to the budget are to be submitted to and approved by GaDOE when a school district intends to spend funds in a manner not initially reported. Lastly, LEA personnel must also provide program-specific assurances related to the ESSER program within the Consolidated Application system. These assurances are reflected in the Uniform Guidance, Section 200.415 – Required Certifications, and include provisions that require LEAs “to assure that expenditures are proper and in accordance with the terms and conditions of the Federal award and approved project budgets...” Condition: A sample of 25 expenditures was randomly selected for testing using a non-statistical sampling approach. In addition, seven individually significant expenditures were selected for testing. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. It was noted that prior approval was not obtained from GaDOE for nine expenditures totaling $31,131 as these expenditures were not reflected in the approved budget or subsequent amendments within the Consolidated Application system as required. Questioned Costs: Upon testing a sample of $14,677 in nonpersonal services expenditures, known questioned costs of $10,136 were identified for expenditures not properly approved through the Consolidated Application process. Using the population being sampled, which totaled $201,966, we project the likely questioned costs to be approximately $139,475. In addition, known questioned costs identified for unapproved payments associated with individually significant items tested totaled $20,995; therefore, the known and likely questioned costs identified for all unallowable payments throughout the sample and individually significant items tested totaled $31,131 and $139,475, respectively. Cause: In discussing these deficiencies with management, the School District believed that the Consolidated Application included the unallowable items purchased; however, the description reflected on the Consolidated Application did not agree to the items purchased. In addition, management was unaware that Consolidated Application was not approved by the GaDOE. Effect: The School District is not in compliance with the Uniform Guidance or GaDOE guidance related to the ESSER program. Failure to accurately develop and amend budget information through the Consolidated Application process and verify compliance with applicable policies and regulations prior to the expenditure of federal program funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unapproved and unallowable expenditures. Recommendation: The School District should revise current internal control procedures related to the ESSER program. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that potential expenditures are approved through the Consolidated Application process and deemed to be allowable before spending federal funds. In addition, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.
Identification of federal program: US DEPARTMENT OF EDUCATION, passed through the Indiana Department of Education, Charter Schools Program 84.282A Criteria : In accordance with 2 CFR 200.403(g), costs must be adequately documented in order to be allowable under Federal awards. Condition : The School was unable to provide documentation for three (3) out of sixty (60) non-payroll expenses. Cause : The School failed to follow its own policies for documentation of expenses and document retention. Effect: The costs were not allowable under the Federal award because they were not adequately documented. Questioned costs: $2,412. Context: Three (3) out of sixty (60) non-payroll expenditures tested did not have original invoice or payment support. Recommendation : We recommend the School implement a document retention system whereby invoices and payment support are retained for the appropriate time period. Recommendation : We recommend the School implement a document retention system whereby invoices and payment support are retained for the appropriate time period. Views of Responsible Officials: See attached Corrective Action Plan.
Finding No. 2022–007 – Activities Allowed or Unallowed, Eligible Uses – FEMA Federal Program ALN 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Program Name of Federal Agency U.S. Department of Homeland Security Pass-through Entity Central Office of Recovery, Reconstruction and Resiliency (COR3) Category Non-compliance / Material weakness in internal controls over compliance Compliance Requirement Activities Allowed or Unallowed, Eligible Uses Criteria As per 2 CFR section 200.403(g), except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: • Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. • Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. • Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. • Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. • Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. • Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). • Be adequately documented. See also §§ 200.300 through 200.309 of this part. • Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Condition During the closeout procedures, the Central Office of Recovery, Reconstruction and Resiliency (COR3) office performed a 100% validation on Rental Equipment, supporting documents including contract summary record, invoices, and proofs of payment. As a result of the validation, the total validated amount is $979,259 from an original amount of $1,260,775 submitted by the Corporation for reimbursement. Cause The Corporation claimed ineligible days in rent of equipment, certain invoices were claimed at a greater monthly rate, various expenses were claimed using retroactive memorandum of necessity as well as other transactions were found to not be eligible due to non-compliance with Puerto Rican Contract law, failing to comply with the proper documentation as required by the regulation. Effect The Corporation has to return a total amount of $281,516 due to the unallowed activities that were claimed to the fund. Questioned Cost The known questioned cost was calculated by the amount deemed to be unallowable activity of $281,516. Context • An amount of $26,127 was deducted from invoice #16307820 due to the dates 9/3/18 to 9/15/18 that falls in the 100% cost share." This amount was claimed under a different PW. • For chillers, invoice 16307877 was partially covered (15 days eligible), invoice 16308069 was partially covered (12 days eligible), and invoice 16308131 was partially covered (14 days eligible) due to the service order execution date. • For generators, invoices 16307884, 16307953, 16308033, 16308092, 16308146, 16308207, 16308270, 16308318, 16308357, 16308402, 16308449 and 16308476 were partially covered due to the maximum contract amount. • For generators, invoices 16307820, 16308622, 16308665, and 16308706 were found to not be eligible for reimbursement due to both retroactive execution as well as non-compliance with Puerto Rican Contract law. Identification of a repeat finding This is not a repeat finding from the immediate previous audit. Recommendation The management of the Corporation should reinforce its procedures of the administration of federal funds to ensure the compliance with the requirements with each program. Also, the Corporation should establish communication with the Central Office of Recovery, Reconstruction and Resiliency in order to obtain instructions for the correction of the non-compliance event and the related questioned cost. Views of responsible officials and planned corrective actions The Corporation’s management and responsible officers agree with this finding. Please refer to the corrective action plan section for the Corporation’s response on pages 89 to 98.
CONDITION -The Municipality’s staff could not provide us with the officially prepared and certified reports that supported compliance with the filing or submission of reports and financial information, as required by federal award and regulatory agreements. Likewise, reconciliations were not provided between the information used to prepare the required and submitted reports with the formal information presented and accounted for in the official Municipality’s accounting system. According to an analysis prepared by the Municipality of the bank account assigned to manage the use of Coronavirus Relief Fund (CRF) PHE - Transfer Funds, and transactions through this bank account during the fiscal year ended June 30, 2022, $1,802,962 has been expended or transferred to the general fund to cover eligible expenses under the terms allowed by the CRF PHE - Transfer Funds. As a consequence of these conditions, compliance with reporting requirements established by the pass-through entity, and related internal controls, could not be verified. CRITERIA - According to the Transfer Agreements, the transferee shall submit reports as the transferor determines are needed to verify use of the funds and compliance with conditions that are imposed on the transfer, and such reports shall be in such form, with such content, as specified by the transferor in the transfer plan and future program instructions directed to all recipients. Transferor will transfer emergency assistance fund to transferee for necessary expenditures related to the COVID-19 emergency by making a transfer on the basis set out in this Agreement and in the Transfer Plan. The reports must be due on the 15th day of each month, the transferee will submit a use of funds transfer report for the prior month’s expenses. Also, as established in the 2 CFR Section 200.302 (a) of the Uniform Guidance, the 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 such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, 2 CFR Section 200.403, states that otherwise authorized by statue, costs must be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity and be adequately documented. CAUSE - There is a lack of knowledge and training to the personnel assigned to the management and reports preparation, as required by this federal award. Additionally, the Municipality does not have an adequate monitoring and internal control regarding the activity, filing and custody of reports, as required by the federal awards and the pass-through entity, and in a way that documents and supports the compliance with reporting requirements. EFFECT - The program is exposed to not being in compliance with the Reporting Requirements as established in agreement. Also, the Municipality is exposed to the Grantor questioning the use of funds. RECOMMENDATION - We recommend that the staff or department in charge locate and document all required reports that were filed according to the requirements of the grant agreement, including the reconciliation thereof with the official Municipality’s accounting subsidiaries. Also, it is absolutely necessary for the Municipality to design, document, establish and provide the necessary and required training, including guidelines and procedures, to all personnel who work directly or indirectly with the management of these federal funds.