Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Brookwood School District 167 07-016-1670-02 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ending June 30, 2022 SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 1. FINDING NUMBER:14 2022 - 002 2. THIS FINDING IS: x New Repeat from Prior year? Year originally reported? 3. Federal Program Name and Year: COVID-19 - Elementary and Secondary School Emergency Relief E2 - 2021 4. Project No.: 21-4998-E2 5. AL No.: 84.425D 6. Passed Through: Illinois State Board of Education 7. Federal Agency: U.S. Department of Education 8. Criteria or specific requirement (including statutory, regulatory, or other citation) According to 2 CFR 200.403(g) allowable costs must "be adequately documented." 9. Condition15 The District's expenditure population was less than amounts claimed by $5,617. The District was unable to identify and support expenditures for this difference. 10. Questioned Costs16 $5,617 11. Context17 Finding is an isolated incident and resulted from reconciling the District's expenditure population to the SEFA. No exceptions were noted during activities allowed or unallowed and allowable costs testing for the amounts that were sampled during our audit procedures. 12. Effect The District received funding in excess of the expenditures incurred. 13. Cause The District's controls did not prevent or detect unsupported amounts from being reported and submitted for reimbursement. 14. Recommendation We recommend that the District implement additional review procedures prior to submitting request for reimbursement of grant expenditures incurred and ensure that amounts claimed are supported by allowable transactions. 15. Management's response18 The District will implement additional review procedures to ensure that expenditure claims submitted for reimbursement agree to supported transactions within the accounting system for allowable costs under the award. 14 See footnote 11. 15 Include facts that support the deficiency identified on the audit finding (?200.516 (b)(3)). 16 Identify questioned costs as required by ?200.516 (a)(3 - 4). 17 See footnote 12. 18 To the extent practical, indicate when management does not agree with the finding, questioned cost, or both.
2022-002 Allowable Costs ? Material Weakness Federal Program ? Victims of Crimes Act (VOCA) CFDA 16-575 Pass-through Entity - State of Florida Office of the Attorney General Federal Agency - Department of Justice Criteria: 2 CFR 200.303 states a non-Federal entity must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. VOCA funds provide reimbursement assistance to Hibiscus for services provided to the victims of crimes that are not otherwise paid. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Condition: Auditor tested 4 of the 12 months of services provided and noted no controls related to the verification of the employees time spent working under this grant. Amounts billed were directly related to the budgeted amounts. Auditor reviewed eCR billing system and timesheets maintained by the providers for billing and payroll processes and noted no controls were implemented to allow for quantification of the time spent with VOCA clients. The program director was listed as the provider in eCR in many instances when she was not, and time sheets are not maintained to allow for proper breakdown of providers time spent on each client. This condition could lead to a potential misstatement of the financial statements. Questioned Costs: Likely estimated questioned costs from $80,000-$166,000. Cause: During the preliminary review of the VOCA grant, auditor noted VOCA had changed the way reimbursements were paid; in prior years VOCA disbursed grant funds based on a fee for service, and during the current audit period changed to grant funds being disbursed based on actual salaries paid. Management did not have a full understanding of the change. Effect: Potential unallowable costs. Recommendation: We recommend Hibiscus implement and monitor the time value related to the services provided under the VOCA grant. Additionally, the appropriate provider should be selected in eCR and appropriate detailed time sheets maintained for the VOCA providers. Billings should be then created based on actual time spent of the providers working with VOCA clients. Management Response: Hibiscus is using eCR data verifying time value related services based on VOCA allowable cost. In addition, updates were made on time sheet for providers detailing actual percentage of services. Cost reimbursements submitted were reviewed, verified, and approved by VOCA.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.258, 17.259, and 17.278 U.S. Department of Labor - WIOA Cluster Federal Award Identification Number and Year - AA332361955A26 and AA347752055A26 2020, 2021 and 2022 Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403(g) indicates that costs must be adequately documented in order to be allowable under federal awards. Condition - DESC transferred $70,590 of expenditures to the WIOA cluster from another grant. There was no support to document the rationale for the transfer or to support allowability. Questioned Costs - $70,590 Identification of How Questioned Costs Were Computed - The questioned cost is made up of the total amount that was transferred. Context - There was only one journal entry transferring expenditures from another grant activity into the WIOA cluster. Cause and Effect - The journal entry was made by a departed staff member, and DESC was unable to locate support for the transfer of expenditures to the WIOA grant. Since there is not adequate documentation to support the transfer, there are questioned costs. In addition, the pass-through agency could disallow the unsupported cost and require a return of funds. Recommendation - DESC should ensure there is adequate support for each cost charged to a federal award. Views of Responsible Officials and Corrective Action Plan - DESC has updated fiscal policies and procedures, requiring supporting documentation for all journal entries that has been reviewed with all fiscal staff. Additionally, a review of the supervisor requirements to review the support documentation prior to approval has been completed. Additionally, the Abila MIP financial accounting system has been updated to allow for supporting documentation to be attached to each individual journal entry. Finally, a SharePoint site has been created for all supporting documentation to be stored for access by the appropriate staff members.
FINDING 2022-002 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2020-2021, 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and only for the operation of the food service program. The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Two invoices for payment to the FSMC, which totaled $420,481, were selected for testing. Supporting documentation was presented for only $347,867 of the costs invoiced. Due to the lack of supporting documentation, we were unable to determine if the remaining costs paid, $72,614, were allowable expenditures. The costs that were not properly documented were considered questioned costs. INDIANA STATE BOARD OF ACCOUNTS 20 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) In the supporting documentation presented for audit, sales tax was erroneously paid totaling $469. These unallowable costs were considered questioned costs. Payroll In fiscal year 2021-2022, the School Corporation's Inventory Analyst was assigned an additional role, Food Service Manager, which included additional compensation paid out of the Child Nutrition Cluster grant funds. The Food Service Manager did not maintain documentation of time spent on federal program and non-federal program activities. The total paid to the Food Service Manager from the School Lunch fund without proper documentation was $28,269. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not designed or implemented a system of internal controls that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective system of internal controls and retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirements listed above. The failure to design and implement an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $101,352 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and comply with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2020-2021, 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and only for the operation of the food service program. The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Two invoices for payment to the FSMC, which totaled $420,481, were selected for testing. Supporting documentation was presented for only $347,867 of the costs invoiced. Due to the lack of supporting documentation, we were unable to determine if the remaining costs paid, $72,614, were allowable expenditures. The costs that were not properly documented were considered questioned costs. INDIANA STATE BOARD OF ACCOUNTS 20 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) In the supporting documentation presented for audit, sales tax was erroneously paid totaling $469. These unallowable costs were considered questioned costs. Payroll In fiscal year 2021-2022, the School Corporation's Inventory Analyst was assigned an additional role, Food Service Manager, which included additional compensation paid out of the Child Nutrition Cluster grant funds. The Food Service Manager did not maintain documentation of time spent on federal program and non-federal program activities. The total paid to the Food Service Manager from the School Lunch fund without proper documentation was $28,269. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not designed or implemented a system of internal controls that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective system of internal controls and retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirements listed above. The failure to design and implement an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $101,352 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and comply with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2020-2021, 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and only for the operation of the food service program. The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Two invoices for payment to the FSMC, which totaled $420,481, were selected for testing. Supporting documentation was presented for only $347,867 of the costs invoiced. Due to the lack of supporting documentation, we were unable to determine if the remaining costs paid, $72,614, were allowable expenditures. The costs that were not properly documented were considered questioned costs. INDIANA STATE BOARD OF ACCOUNTS 20 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) In the supporting documentation presented for audit, sales tax was erroneously paid totaling $469. These unallowable costs were considered questioned costs. Payroll In fiscal year 2021-2022, the School Corporation's Inventory Analyst was assigned an additional role, Food Service Manager, which included additional compensation paid out of the Child Nutrition Cluster grant funds. The Food Service Manager did not maintain documentation of time spent on federal program and non-federal program activities. The total paid to the Food Service Manager from the School Lunch fund without proper documentation was $28,269. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not designed or implemented a system of internal controls that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective system of internal controls and retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirements listed above. The failure to design and implement an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $101,352 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and comply with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2020-2021, 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and only for the operation of the food service program. The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Two invoices for payment to the FSMC, which totaled $420,481, were selected for testing. Supporting documentation was presented for only $347,867 of the costs invoiced. Due to the lack of supporting documentation, we were unable to determine if the remaining costs paid, $72,614, were allowable expenditures. The costs that were not properly documented were considered questioned costs. INDIANA STATE BOARD OF ACCOUNTS 20 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) In the supporting documentation presented for audit, sales tax was erroneously paid totaling $469. These unallowable costs were considered questioned costs. Payroll In fiscal year 2021-2022, the School Corporation's Inventory Analyst was assigned an additional role, Food Service Manager, which included additional compensation paid out of the Child Nutrition Cluster grant funds. The Food Service Manager did not maintain documentation of time spent on federal program and non-federal program activities. The total paid to the Food Service Manager from the School Lunch fund without proper documentation was $28,269. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not designed or implemented a system of internal controls that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective system of internal controls and retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirements listed above. The failure to design and implement an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $101,352 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and comply with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2020-2021, 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and only for the operation of the food service program. The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Two invoices for payment to the FSMC, which totaled $420,481, were selected for testing. Supporting documentation was presented for only $347,867 of the costs invoiced. Due to the lack of supporting documentation, we were unable to determine if the remaining costs paid, $72,614, were allowable expenditures. The costs that were not properly documented were considered questioned costs. INDIANA STATE BOARD OF ACCOUNTS 20 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) In the supporting documentation presented for audit, sales tax was erroneously paid totaling $469. These unallowable costs were considered questioned costs. Payroll In fiscal year 2021-2022, the School Corporation's Inventory Analyst was assigned an additional role, Food Service Manager, which included additional compensation paid out of the Child Nutrition Cluster grant funds. The Food Service Manager did not maintain documentation of time spent on federal program and non-federal program activities. The total paid to the Food Service Manager from the School Lunch fund without proper documentation was $28,269. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not designed or implemented a system of internal controls that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective system of internal controls and retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirements listed above. The failure to design and implement an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $101,352 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and comply with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2020-2021, 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and only for the operation of the food service program. The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Two invoices for payment to the FSMC, which totaled $420,481, were selected for testing. Supporting documentation was presented for only $347,867 of the costs invoiced. Due to the lack of supporting documentation, we were unable to determine if the remaining costs paid, $72,614, were allowable expenditures. The costs that were not properly documented were considered questioned costs. INDIANA STATE BOARD OF ACCOUNTS 20 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) In the supporting documentation presented for audit, sales tax was erroneously paid totaling $469. These unallowable costs were considered questioned costs. Payroll In fiscal year 2021-2022, the School Corporation's Inventory Analyst was assigned an additional role, Food Service Manager, which included additional compensation paid out of the Child Nutrition Cluster grant funds. The Food Service Manager did not maintain documentation of time spent on federal program and non-federal program activities. The total paid to the Food Service Manager from the School Lunch fund without proper documentation was $28,269. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not designed or implemented a system of internal controls that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective system of internal controls and retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirements listed above. The failure to design and implement an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $101,352 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and comply with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-007 Subject: Title I Grants to Local Educational Agencies - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A180014, S010A190014, S010A200014, S010A210014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-010. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. There were 4 of 53 disbursements charged to the grant fund that were not in compliance with the Allowable Costs/Cost Principles compliance requirement. The 4 issues identified were as follows: 1. The School Corporation paid one employee's salary without supporting documentation or personnel reports, such as time and effort logs to support the time charged to the grant. 2. The School Corporation paid three employees a rate of pay not supported by the School Corporation's records. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: INDIANA STATE BOARD OF ACCOUNTS 32 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation; or an unallowable activity and a direct or indirect cost activity. . . ." Cause Management had not established an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure that documentation will be maintained and made available for audit and comply with the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-007 Subject: Title I Grants to Local Educational Agencies - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A180014, S010A190014, S010A200014, S010A210014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-010. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. There were 4 of 53 disbursements charged to the grant fund that were not in compliance with the Allowable Costs/Cost Principles compliance requirement. The 4 issues identified were as follows: 1. The School Corporation paid one employee's salary without supporting documentation or personnel reports, such as time and effort logs to support the time charged to the grant. 2. The School Corporation paid three employees a rate of pay not supported by the School Corporation's records. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: INDIANA STATE BOARD OF ACCOUNTS 32 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation; or an unallowable activity and a direct or indirect cost activity. . . ." Cause Management had not established an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure that documentation will be maintained and made available for audit and comply with the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2022-005 Federal Agency: U.S. Department of Education Pass Thru Entity: Oklahoma State Department of Education Program: COVID-19 Education Stabilization Fund Assistance Listing: COVID-19- 84.425D & 84.425U Grant Period: Year ending June 30, 2022 Condition: Expenditures were paid without supporting invoices and proper District authority?s approval. Criteria: 2 CFR ?200.403 (g) Costs that meet general criteria in order to be allowable under federal awards must be adequately documented. Cause: Procedures in place for proper approval and documentation were not followed. Effect: The expenditures may be disallowed. Context: A sample of 32 expenditures totaling $3,037,928 was selected for audit from a population of $9,261,024. The test found 25 items that were not in compliance with questioned costs totaling $107,000. Questioned Costs: $107,000 Recommendation Expenditures should not be paid without the proper approval and supporting invoices. The District should follow procedures regarding requiring appropriate staff with authority to approve expenditures and requiring support for expenditures. Repeat Finding from Prior Year: No Views of Responsible Officials And Planned Corrective Action: Certain one-time COVID funds required several departments to make purchases. The lack of specific and clear guidance as to which department was directly responsible resulted in questioned expenditures. District Financial procurement procedures have been updated and implemented that require all federal expenditures to be approved through Lawton Public Schools? Federal Programs office. In addition, all supporting invoices for said expenditures must be provided to and approved by Lawton Public Schools? Federal Programs office. Lawton Public Schools will reimburse the State Department of Education for the total of these questioned costs.
2022-005 Federal Agency: U.S. Department of Education Pass Thru Entity: Oklahoma State Department of Education Program: COVID-19 Education Stabilization Fund Assistance Listing: COVID-19- 84.425D & 84.425U Grant Period: Year ending June 30, 2022 Condition: Expenditures were paid without supporting invoices and proper District authority?s approval. Criteria: 2 CFR ?200.403 (g) Costs that meet general criteria in order to be allowable under federal awards must be adequately documented. Cause: Procedures in place for proper approval and documentation were not followed. Effect: The expenditures may be disallowed. Context: A sample of 32 expenditures totaling $3,037,928 was selected for audit from a population of $9,261,024. The test found 25 items that were not in compliance with questioned costs totaling $107,000. Questioned Costs: $107,000 Recommendation Expenditures should not be paid without the proper approval and supporting invoices. The District should follow procedures regarding requiring appropriate staff with authority to approve expenditures and requiring support for expenditures. Repeat Finding from Prior Year: No Views of Responsible Officials And Planned Corrective Action: Certain one-time COVID funds required several departments to make purchases. The lack of specific and clear guidance as to which department was directly responsible resulted in questioned expenditures. District Financial procurement procedures have been updated and implemented that require all federal expenditures to be approved through Lawton Public Schools? Federal Programs office. In addition, all supporting invoices for said expenditures must be provided to and approved by Lawton Public Schools? Federal Programs office. Lawton Public Schools will reimburse the State Department of Education for the total of these questioned costs.
2022-005 Federal Agency: U.S. Department of Education Pass Thru Entity: Oklahoma State Department of Education Program: COVID-19 Education Stabilization Fund Assistance Listing: COVID-19- 84.425D & 84.425U Grant Period: Year ending June 30, 2022 Condition: Expenditures were paid without supporting invoices and proper District authority?s approval. Criteria: 2 CFR ?200.403 (g) Costs that meet general criteria in order to be allowable under federal awards must be adequately documented. Cause: Procedures in place for proper approval and documentation were not followed. Effect: The expenditures may be disallowed. Context: A sample of 32 expenditures totaling $3,037,928 was selected for audit from a population of $9,261,024. The test found 25 items that were not in compliance with questioned costs totaling $107,000. Questioned Costs: $107,000 Recommendation Expenditures should not be paid without the proper approval and supporting invoices. The District should follow procedures regarding requiring appropriate staff with authority to approve expenditures and requiring support for expenditures. Repeat Finding from Prior Year: No Views of Responsible Officials And Planned Corrective Action: Certain one-time COVID funds required several departments to make purchases. The lack of specific and clear guidance as to which department was directly responsible resulted in questioned expenditures. District Financial procurement procedures have been updated and implemented that require all federal expenditures to be approved through Lawton Public Schools? Federal Programs office. In addition, all supporting invoices for said expenditures must be provided to and approved by Lawton Public Schools? Federal Programs office. Lawton Public Schools will reimburse the State Department of Education for the total of these questioned costs.
2022-005 Federal Agency: U.S. Department of Education Pass Thru Entity: Oklahoma State Department of Education Program: COVID-19 Education Stabilization Fund Assistance Listing: COVID-19- 84.425D & 84.425U Grant Period: Year ending June 30, 2022 Condition: Expenditures were paid without supporting invoices and proper District authority?s approval. Criteria: 2 CFR ?200.403 (g) Costs that meet general criteria in order to be allowable under federal awards must be adequately documented. Cause: Procedures in place for proper approval and documentation were not followed. Effect: The expenditures may be disallowed. Context: A sample of 32 expenditures totaling $3,037,928 was selected for audit from a population of $9,261,024. The test found 25 items that were not in compliance with questioned costs totaling $107,000. Questioned Costs: $107,000 Recommendation Expenditures should not be paid without the proper approval and supporting invoices. The District should follow procedures regarding requiring appropriate staff with authority to approve expenditures and requiring support for expenditures. Repeat Finding from Prior Year: No Views of Responsible Officials And Planned Corrective Action: Certain one-time COVID funds required several departments to make purchases. The lack of specific and clear guidance as to which department was directly responsible resulted in questioned expenditures. District Financial procurement procedures have been updated and implemented that require all federal expenditures to be approved through Lawton Public Schools? Federal Programs office. In addition, all supporting invoices for said expenditures must be provided to and approved by Lawton Public Schools? Federal Programs office. Lawton Public Schools will reimburse the State Department of Education for the total of these questioned costs.
2022-005 Federal Agency: U.S. Department of Education Pass Thru Entity: Oklahoma State Department of Education Program: COVID-19 Education Stabilization Fund Assistance Listing: COVID-19- 84.425D & 84.425U Grant Period: Year ending June 30, 2022 Condition: Expenditures were paid without supporting invoices and proper District authority?s approval. Criteria: 2 CFR ?200.403 (g) Costs that meet general criteria in order to be allowable under federal awards must be adequately documented. Cause: Procedures in place for proper approval and documentation were not followed. Effect: The expenditures may be disallowed. Context: A sample of 32 expenditures totaling $3,037,928 was selected for audit from a population of $9,261,024. The test found 25 items that were not in compliance with questioned costs totaling $107,000. Questioned Costs: $107,000 Recommendation Expenditures should not be paid without the proper approval and supporting invoices. The District should follow procedures regarding requiring appropriate staff with authority to approve expenditures and requiring support for expenditures. Repeat Finding from Prior Year: No Views of Responsible Officials And Planned Corrective Action: Certain one-time COVID funds required several departments to make purchases. The lack of specific and clear guidance as to which department was directly responsible resulted in questioned expenditures. District Financial procurement procedures have been updated and implemented that require all federal expenditures to be approved through Lawton Public Schools? Federal Programs office. In addition, all supporting invoices for said expenditures must be provided to and approved by Lawton Public Schools? Federal Programs office. Lawton Public Schools will reimburse the State Department of Education for the total of these questioned costs.
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. Department of Education Pass-Through Entity: Georgia Department of Education Assistance Listing Number and Title: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D200012 (Year: 2020), S425D210012 (Year: 2021) Questioned Costs: $187,246 Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund program (Assistance Listing Number 84.425D) 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. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE was responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $4,249,034 were expended and reported on the Bryan 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?? Lastly, as a condition of receiving federal subawards from the GaDOE, LEAs are required to prepare an annual budget that reflects how funding will be expended. This budget is submitted in the Consolidated Application system and is required to be reviewed and approved by the GaDOE program and grants management prior to expending federal program funds. 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 45 nonpersonal services expenditures was randomly selected for testing using a non-statistical sampling approach. Nine 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 one expenditure totaling $187,246 was not appropriately approved by GaDOE through the Consolidated Application process. Further, the expenditure was ineligible for reimbursement under the ESSER program as the expenditure had previously been approved for funding through the Emergency Connectivity Fund (ECF) program. Upon further review, it was noted that reimbursement was requested and received from both the ESSER program and the ECF program after year-end and a refund of such funding had not been processed for either of the programs as of the end of audit fieldwork. Questioned Costs: Known questioned costs of $187,246 were identified for expenditures that were not reflected within the approved project budget for the ESSER program and were approved for reimbursement under another federal program. 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 the School District management did not update the ESSER Consolidated Application system prior to expending the funds. Additionally, the Finance Department thought the expenditures were not allowable under the Emergency Connectivity Fund program; therefore, they charged the expenditures to the ESSER program. However, the Director of the Emergency Connectivity Fund Program also requested reimbursement for the expenditures. Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate documentation, including an approved budget, exists to support the allowability of payments from the ESSER fund may expose the School District to unnecessary financial strains and shortages as GaDOE should require the School District to return funds associated with the unapproved and unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are appropriately approved through the Consolidated Application process prior to the expending of federal program funds. Additionally, the School District should initiate a refund in the amount of $187,246 to GaDOE. 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. Department of Education Pass-Through Entity: Georgia Department of Education Assistance Listing Number and Title: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D200012 (Year: 2020), S425D210012 (Year: 2021) Questioned Costs: $187,246 Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund program (Assistance Listing Number 84.425D) 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. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE was responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $4,249,034 were expended and reported on the Bryan 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?? Lastly, as a condition of receiving federal subawards from the GaDOE, LEAs are required to prepare an annual budget that reflects how funding will be expended. This budget is submitted in the Consolidated Application system and is required to be reviewed and approved by the GaDOE program and grants management prior to expending federal program funds. 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 45 nonpersonal services expenditures was randomly selected for testing using a non-statistical sampling approach. Nine 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 one expenditure totaling $187,246 was not appropriately approved by GaDOE through the Consolidated Application process. Further, the expenditure was ineligible for reimbursement under the ESSER program as the expenditure had previously been approved for funding through the Emergency Connectivity Fund (ECF) program. Upon further review, it was noted that reimbursement was requested and received from both the ESSER program and the ECF program after year-end and a refund of such funding had not been processed for either of the programs as of the end of audit fieldwork. Questioned Costs: Known questioned costs of $187,246 were identified for expenditures that were not reflected within the approved project budget for the ESSER program and were approved for reimbursement under another federal program. 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 the School District management did not update the ESSER Consolidated Application system prior to expending the funds. Additionally, the Finance Department thought the expenditures were not allowable under the Emergency Connectivity Fund program; therefore, they charged the expenditures to the ESSER program. However, the Director of the Emergency Connectivity Fund Program also requested reimbursement for the expenditures. Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate documentation, including an approved budget, exists to support the allowability of payments from the ESSER fund may expose the School District to unnecessary financial strains and shortages as GaDOE should require the School District to return funds associated with the unapproved and unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are appropriately approved through the Consolidated Application process prior to the expending of federal program funds. Additionally, the School District should initiate a refund in the amount of $187,246 to GaDOE. 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 Listing 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 COVID-19 ? 84.425W ? American Rescue Plan Elementary and Secondary School Emergency relief Fund Federal Award Numbers: S425D200012 (Year: 2020), S425D210012 (Year: 2021) S425U2120012 (Year: 2022), S425W210011 (Year: 2021) Questioned Costs: $117,383 Description: A review of expenditures charged to the American Rescue Plan Elementary and Secondary School Emergency Relief Fund program (Assistance Listing Number 84.425U) revealed that the School District?s internal control procedures were not operating appropriately to ensure that expenditures were allowable for the program. 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. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE was responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $8,670,356.56 were expended and reported on the Murray 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? (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.? Condition: A sample of 60 non-personal services expenditures was randomly selected for testing using a nonstatistical sampling approach. Seven 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. Upon completing this testing, it was noted that subscription bundles and licenses were paid for six-year and ten-year periods. Because the period of performance for this funding ends on September 30, 2024 and the liquidation period for the program ends 120 days thereafter, $117,383 of these expenditures were incurred after the period of performance and deemed unallowable. Questioned Costs: Known questioned costs of $117,383 were identified for expenditures that were not incurred during the appropriate period of performance. 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. The following Assistance Listing Number was affected by known and likely questioned costs: 84.425U. Cause: In discussing these deficiencies with management, they stated per the guidance at the time, the School District believes that the multi-year contract was the best fiscally responsible use of ESSER funds. The science curriculum, along with the materials, comes with no reoccurring costs. Student workbooks are shipped throughout the course of the contract at no additional cost to the district. The vendor provided a multi-year discount for the materials, along with the grade level curriculum, that was a direct savings to the district. Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures will fall within the respective federal program?s period of performance before expending Federal program funds. 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 Listing 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 COVID-19 ? 84.425W ? American Rescue Plan Elementary and Secondary School Emergency relief Fund Federal Award Numbers: S425D200012 (Year: 2020), S425D210012 (Year: 2021) S425U2120012 (Year: 2022), S425W210011 (Year: 2021) Questioned Costs: $117,383 Description: A review of expenditures charged to the American Rescue Plan Elementary and Secondary School Emergency Relief Fund program (Assistance Listing Number 84.425U) revealed that the School District?s internal control procedures were not operating appropriately to ensure that expenditures were allowable for the program. 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. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE was responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $8,670,356.56 were expended and reported on the Murray 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? (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.? Condition: A sample of 60 non-personal services expenditures was randomly selected for testing using a nonstatistical sampling approach. Seven 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. Upon completing this testing, it was noted that subscription bundles and licenses were paid for six-year and ten-year periods. Because the period of performance for this funding ends on September 30, 2024 and the liquidation period for the program ends 120 days thereafter, $117,383 of these expenditures were incurred after the period of performance and deemed unallowable. Questioned Costs: Known questioned costs of $117,383 were identified for expenditures that were not incurred during the appropriate period of performance. 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. The following Assistance Listing Number was affected by known and likely questioned costs: 84.425U. Cause: In discussing these deficiencies with management, they stated per the guidance at the time, the School District believes that the multi-year contract was the best fiscally responsible use of ESSER funds. The science curriculum, along with the materials, comes with no reoccurring costs. Student workbooks are shipped throughout the course of the contract at no additional cost to the district. The vendor provided a multi-year discount for the materials, along with the grade level curriculum, that was a direct savings to the district. Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures will fall within the respective federal program?s period of performance before expending Federal program funds. 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 Listing 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 COVID-19 ? 84.425W ? American Rescue Plan Elementary and Secondary School Emergency relief Fund Federal Award Numbers: S425D200012 (Year: 2020), S425D210012 (Year: 2021) S425U2120012 (Year: 2022), S425W210011 (Year: 2021) Questioned Costs: $117,383 Description: A review of expenditures charged to the American Rescue Plan Elementary and Secondary School Emergency Relief Fund program (Assistance Listing Number 84.425U) revealed that the School District?s internal control procedures were not operating appropriately to ensure that expenditures were allowable for the program. 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. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE was responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $8,670,356.56 were expended and reported on the Murray 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? (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.? Condition: A sample of 60 non-personal services expenditures was randomly selected for testing using a nonstatistical sampling approach. Seven 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. Upon completing this testing, it was noted that subscription bundles and licenses were paid for six-year and ten-year periods. Because the period of performance for this funding ends on September 30, 2024 and the liquidation period for the program ends 120 days thereafter, $117,383 of these expenditures were incurred after the period of performance and deemed unallowable. Questioned Costs: Known questioned costs of $117,383 were identified for expenditures that were not incurred during the appropriate period of performance. 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. The following Assistance Listing Number was affected by known and likely questioned costs: 84.425U. Cause: In discussing these deficiencies with management, they stated per the guidance at the time, the School District believes that the multi-year contract was the best fiscally responsible use of ESSER funds. The science curriculum, along with the materials, comes with no reoccurring costs. Student workbooks are shipped throughout the course of the contract at no additional cost to the district. The vendor provided a multi-year discount for the materials, along with the grade level curriculum, that was a direct savings to the district. Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures will fall within the respective federal program?s period of performance before expending Federal program funds. 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 Listing 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 COVID-19 ? 84.425W ? American Rescue Plan Elementary and Secondary School Emergency relief Fund Federal Award Numbers: S425D200012 (Year: 2020), S425D210012 (Year: 2021) S425U2120012 (Year: 2022), S425W210011 (Year: 2021) Questioned Costs: $117,383 Description: A review of expenditures charged to the American Rescue Plan Elementary and Secondary School Emergency Relief Fund program (Assistance Listing Number 84.425U) revealed that the School District?s internal control procedures were not operating appropriately to ensure that expenditures were allowable for the program. 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. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE was responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $8,670,356.56 were expended and reported on the Murray 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? (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.? Condition: A sample of 60 non-personal services expenditures was randomly selected for testing using a nonstatistical sampling approach. Seven 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. Upon completing this testing, it was noted that subscription bundles and licenses were paid for six-year and ten-year periods. Because the period of performance for this funding ends on September 30, 2024 and the liquidation period for the program ends 120 days thereafter, $117,383 of these expenditures were incurred after the period of performance and deemed unallowable. Questioned Costs: Known questioned costs of $117,383 were identified for expenditures that were not incurred during the appropriate period of performance. 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. The following Assistance Listing Number was affected by known and likely questioned costs: 84.425U. Cause: In discussing these deficiencies with management, they stated per the guidance at the time, the School District believes that the multi-year contract was the best fiscally responsible use of ESSER funds. The science curriculum, along with the materials, comes with no reoccurring costs. Student workbooks are shipped throughout the course of the contract at no additional cost to the district. The vendor provided a multi-year discount for the materials, along with the grade level curriculum, that was a direct savings to the district. Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures will fall within the respective federal program?s period of performance before expending Federal program funds. Views of Responsible Officials: We concur with this finding.
2022-002: Internal Control Over Compliance and Compliance with Allowable Costs/Cost Principles Program: U.S. Department of State AL Number: 19.016 AL Name: Iraq Assistance Program Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SLMAQM19GR2288 September 29, 2019 through June 30,2022 Program: U.S. Department of State AL Number: 19.518 AL Name: Overseas Refugee Assistance Program for Western Hemisphere Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO20CA0209 September 20, 2020 through September 29, 2021 N/A September 20, 2021 through September 29, 2022 Criteria ? Code of Federal Regulation (CFR) ?200.303, Internal Controls, Section (a) states the Organization must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the federal award. Management is responsible for establishing and maintaining a system of internal control that should include controls over its activities allowed or unallowed, allowable cost/cost principle process. CFR 200.403(g) states that for costs to be allowed under federal awards, they must be adequately documented. Condition ? During our testing of period of performance, we noted exceptions in the ability of management to support expenditures incurred and charged to federal programs. Cause ? Policies and procedures were not appropriately adhered to in certain instances to ensure that supporting documentation was maintained 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. Questioned Costs ? $28,787 Context: Assistance Listing Number: 19.016 During our testing of the period of performance compliance requirement for grant award periods that ended during the fiscal year, we sampled 12 expenditures, totaling $292,901, for the Iraq Assistance Program and noted one item amounting to $28,766 did not have adequate supporting documentation for the subrecipient expenditures charged to the program. Assistance Listing Number: 19.518 During our testing of the period of performance compliance requirement for grant award periods that started and ended during the fiscal year, we sampled 80 expenditures, totaling $15,252, for the Overseas Refugee Assistance Program for Western Hemisphere and noted two items, totaling $21, did not have adequate supporting documentation for the subrecipient expenditures charged to the program. Effect ? An ineffective control system related to review of transactions to ensure that only allowable costs are charged to federal programs can lead to noncompliance with federal statutes, regulations, and the provisions of grant agreements that could ultimately lead to disallowed costs for the major programs. Repeat Finding ? This is not a repeat finding. Recommendation - We recommend that the Organization ensure its policies and procedures ensure that documentation of expenditure payment is maintained and that these policies and procedures are followed on a consistent basis. Views of Responsible Officials ? Management agrees with the finding and takes responsibility to comply with allowed and allowable requirements. Management through the local offices has already developed a policy to ensure that the period of performance is adhered to.
2022-003: Internal Control Over Compliance and Compliance with Allowable Costs/Cost Principles Program: U.S. Department of State AL Number: 19.016 AL Name: Iraq Assistance Program Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SLMAQM19GR2288 September 29, 2019 through June 30,2022 Program: U.S. Department of State AL Number: 19.518 AL Name: Overseas Refugee Assistance Program for Western Hemisphere Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO20CA0209 September 20, 2020 through September 29, 2021 N/A September 20, 2021 through September 29, 2022 Criteria ? CFR ?200.303, Internal Controls, Section (a) states the Organization must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the federal award. Management is responsible for establishing and maintaining a system of internal control that should include controls over its activities allowed or unallowed, allowable cost/cost principle process. CFR 200.403(g) states that for costs to be allowed under federal awards, they must be adequately documented. Condition ? During our testing of allowable costs and testing of period of performance for expenditures incurred throughout the year, we noted exceptions in the ability of management to support allocations of payroll and nonpayroll expenditures incurred in federal programs. Cause ? Policies and procedures were not appropriately adhered to in certain instances to ensure that supporting documentation was maintained to evidence that costs allocated to the program were allowable and that an appropriate level of review and approval was completed prior to charging costs to a federal program. Effect ? An ineffective control system related to review of transactions to ensure that only allowable costs are allocated to federal programs can lead to noncompliance with federal statutes, regulations, and the provisions of grant agreements that could ultimately lead to disallowed costs for the major programs. Questioned Costs ? $1,201 Context AL Number: 19.016 We sampled 25 payroll expenditures, totaling $9,560, for Iraq Assistance Programs and noted that two items, totaling $461, did not have proper documentation for allocation basis for the payroll expenditure charged to the program. Additionally, during our testing of the period of performance compliance requirement for grant costs incurred throughout the year, we sampled 40 expenditures, totaling $11,811, for Iraq Assistance Programs and noted that an additional two items, totaling $211, did not have proper documentation for allocation basis for payroll expenditures charged to the program. AL Number: 19.518 We sampled 25 payroll expenditures, totaling $9,068, for the Overseas Refugee Assistance Program for Western Hemisphere and noted that one item, amounting to $529, did not have proper documentation for allocation basis for the payroll expenditure charged to the program. Repeat Finding ? This is not a repeat finding. Recommendation - We recommend that the Organization ensure its policies and procedures ensure that documentation of expenditure payment and allocation is maintained and that these policies and procedures are followed on a consistent basis. Views of Responsible Officials - Management agrees with the finding and takes responsibility to comply with allowed and allowable requirements requirements. Management has developed a policy in the Iraq local office to aid in time and effort allocation.
2022-005: Internal Control Over Compliance and Compliance with Period of Performance Program: U.S. Department of State AL Number: 19.016 AL Name: Iraq Assistance Program Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SLMAQM19GR2288 September 29, 2019 through June 30,2022 Program: U.S. Department of State AL Number: 19.518 AL Name: Overseas Refugee Assistance Program for Western Hemisphere Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO20CA0209 September 20, 2020 through September 29, 2021 N/A September 20, 2021 through September 29, 2022 Criteria - CFR ?200.303, Internal Controls, Section (a) states the Organization must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the federal award. Management is responsible for establishing and maintaining a system of internal control that should include controls over its grants? period of performance process. In accordance with CFR Section 200.403(h), 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 period pursuant to ?200.308(e)(3). In accordance with CFR Section 200.458, pre-award costs are those incurred prior to the effective date of the federal award or subaward directly pursuant to the negotiation and in anticipation of the federal award where such costs are necessary for efficient and timely performance of the scope of the work. Such costs are allowable only to the extent they would have been allowable if incurred after the date of the federal award and only with the written approval of the federal awarding agency. In accordance with CFR Section 200.344, the federal awarding agency or pass-through entity will close out the federal award when it determines that all applicable administrative actions and all required work of the federal award have been completed by the nonfederal entity. Per CFR Section 200.344(b), unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all obligations incurred under the federal award not later than 120 calendar days after the end date of the period of performance. Condition ? During our testing of period of performance, we noted exceptions in the ability of management to support expenditures were incurred and charged to federal programs within the period of performance. Cause ? Policies and procedures were not appropriately adhered to in certain instances to ensure that supporting documentation was maintained to evidence that costs were incurred during the period of performance and that an appropriate level of review and approval was completed prior to charging costs to a federal program. Effect - The lack of adherence to the established internal control procedures around the period of performance of the award can lead to noncompliance with laws, regulations, and the provisions of grant agreements, which could ultimately lead to expenditures not being charged to the major programs in the correct period. Questioned Costs ? $29,459 Context: Assistance Listing Number: 19.016 During our testing of the period of performance compliance requirement for grant award periods that ended during the fiscal year, we sampled 12 expenditures, totaling $292,901, for the Iraq Assistance Program and noted one item amounting to $28,766 did not have adequate supporting documentation for the subrecipient expenditures charged to the program. Additionally, during our testing of the period of performance compliance requirement for grant costs incurred throughout the year, we sampled 40 expenditures, totaling $11,811, for the Iraq Assistance Programs and noted that four items, totaling $672, did not have proper documentation for the allocation of the expenditure. Assistance Listing Number: 19.518 During our testing of the period of performance compliance requirement for grant award periods that started and ended during the fiscal year, we sampled 81 expenditures, totaling $15,252, for the Overseas Refugee Assistance Program for Western Hemisphere and noted two items, totaling $21, did not have adequate supporting documentation for the subrecipient expenditures charged to the program. Repeat Finding - This finding is not a repeat finding. Recommendation - We recommend that the Organization ensure its policies and procedures ensure that documentation of when the expenditure was incurred and liquidated is maintained and that these policies and procedures are followed on a consistent basis. Views of Responsible Officials - Management agrees with the finding and takes responsibility to comply with the period of performance compliance requirements. Management through the local offices has already developed a policy to ensure that the period of performance is adhered to.
2022-002: Internal Control Over Compliance and Compliance with Allowable Costs/Cost Principles Program: U.S. Department of State AL Number: 19.016 AL Name: Iraq Assistance Program Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SLMAQM19GR2288 September 29, 2019 through June 30,2022 Program: U.S. Department of State AL Number: 19.518 AL Name: Overseas Refugee Assistance Program for Western Hemisphere Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO20CA0209 September 20, 2020 through September 29, 2021 N/A September 20, 2021 through September 29, 2022 Criteria ? Code of Federal Regulation (CFR) ?200.303, Internal Controls, Section (a) states the Organization must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the federal award. Management is responsible for establishing and maintaining a system of internal control that should include controls over its activities allowed or unallowed, allowable cost/cost principle process. CFR 200.403(g) states that for costs to be allowed under federal awards, they must be adequately documented. Condition ? During our testing of period of performance, we noted exceptions in the ability of management to support expenditures incurred and charged to federal programs. Cause ? Policies and procedures were not appropriately adhered to in certain instances to ensure that supporting documentation was maintained 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. Questioned Costs ? $28,787 Context: Assistance Listing Number: 19.016 During our testing of the period of performance compliance requirement for grant award periods that ended during the fiscal year, we sampled 12 expenditures, totaling $292,901, for the Iraq Assistance Program and noted one item amounting to $28,766 did not have adequate supporting documentation for the subrecipient expenditures charged to the program. Assistance Listing Number: 19.518 During our testing of the period of performance compliance requirement for grant award periods that started and ended during the fiscal year, we sampled 80 expenditures, totaling $15,252, for the Overseas Refugee Assistance Program for Western Hemisphere and noted two items, totaling $21, did not have adequate supporting documentation for the subrecipient expenditures charged to the program. Effect ? An ineffective control system related to review of transactions to ensure that only allowable costs are charged to federal programs can lead to noncompliance with federal statutes, regulations, and the provisions of grant agreements that could ultimately lead to disallowed costs for the major programs. Repeat Finding ? This is not a repeat finding. Recommendation - We recommend that the Organization ensure its policies and procedures ensure that documentation of expenditure payment is maintained and that these policies and procedures are followed on a consistent basis. Views of Responsible Officials ? Management agrees with the finding and takes responsibility to comply with allowed and allowable requirements. Management through the local offices has already developed a policy to ensure that the period of performance is adhered to.
2022-003: Internal Control Over Compliance and Compliance with Allowable Costs/Cost Principles Program: U.S. Department of State AL Number: 19.016 AL Name: Iraq Assistance Program Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SLMAQM19GR2288 September 29, 2019 through June 30,2022 Program: U.S. Department of State AL Number: 19.518 AL Name: Overseas Refugee Assistance Program for Western Hemisphere Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO20CA0209 September 20, 2020 through September 29, 2021 N/A September 20, 2021 through September 29, 2022 Criteria ? CFR ?200.303, Internal Controls, Section (a) states the Organization must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the federal award. Management is responsible for establishing and maintaining a system of internal control that should include controls over its activities allowed or unallowed, allowable cost/cost principle process. CFR 200.403(g) states that for costs to be allowed under federal awards, they must be adequately documented. Condition ? During our testing of allowable costs and testing of period of performance for expenditures incurred throughout the year, we noted exceptions in the ability of management to support allocations of payroll and nonpayroll expenditures incurred in federal programs. Cause ? Policies and procedures were not appropriately adhered to in certain instances to ensure that supporting documentation was maintained to evidence that costs allocated to the program were allowable and that an appropriate level of review and approval was completed prior to charging costs to a federal program. Effect ? An ineffective control system related to review of transactions to ensure that only allowable costs are allocated to federal programs can lead to noncompliance with federal statutes, regulations, and the provisions of grant agreements that could ultimately lead to disallowed costs for the major programs. Questioned Costs ? $1,201 Context AL Number: 19.016 We sampled 25 payroll expenditures, totaling $9,560, for Iraq Assistance Programs and noted that two items, totaling $461, did not have proper documentation for allocation basis for the payroll expenditure charged to the program. Additionally, during our testing of the period of performance compliance requirement for grant costs incurred throughout the year, we sampled 40 expenditures, totaling $11,811, for Iraq Assistance Programs and noted that an additional two items, totaling $211, did not have proper documentation for allocation basis for payroll expenditures charged to the program. AL Number: 19.518 We sampled 25 payroll expenditures, totaling $9,068, for the Overseas Refugee Assistance Program for Western Hemisphere and noted that one item, amounting to $529, did not have proper documentation for allocation basis for the payroll expenditure charged to the program. Repeat Finding ? This is not a repeat finding. Recommendation - We recommend that the Organization ensure its policies and procedures ensure that documentation of expenditure payment and allocation is maintained and that these policies and procedures are followed on a consistent basis. Views of Responsible Officials - Management agrees with the finding and takes responsibility to comply with allowed and allowable requirements requirements. Management has developed a policy in the Iraq local office to aid in time and effort allocation.
2022-005: Internal Control Over Compliance and Compliance with Period of Performance Program: U.S. Department of State AL Number: 19.016 AL Name: Iraq Assistance Program Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SLMAQM19GR2288 September 29, 2019 through June 30,2022 Program: U.S. Department of State AL Number: 19.518 AL Name: Overseas Refugee Assistance Program for Western Hemisphere Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO20CA0209 September 20, 2020 through September 29, 2021 N/A September 20, 2021 through September 29, 2022 Criteria - CFR ?200.303, Internal Controls, Section (a) states the Organization must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the federal award. Management is responsible for establishing and maintaining a system of internal control that should include controls over its grants? period of performance process. In accordance with CFR Section 200.403(h), 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 period pursuant to ?200.308(e)(3). In accordance with CFR Section 200.458, pre-award costs are those incurred prior to the effective date of the federal award or subaward directly pursuant to the negotiation and in anticipation of the federal award where such costs are necessary for efficient and timely performance of the scope of the work. Such costs are allowable only to the extent they would have been allowable if incurred after the date of the federal award and only with the written approval of the federal awarding agency. In accordance with CFR Section 200.344, the federal awarding agency or pass-through entity will close out the federal award when it determines that all applicable administrative actions and all required work of the federal award have been completed by the nonfederal entity. Per CFR Section 200.344(b), unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all obligations incurred under the federal award not later than 120 calendar days after the end date of the period of performance. Condition ? During our testing of period of performance, we noted exceptions in the ability of management to support expenditures were incurred and charged to federal programs within the period of performance. Cause ? Policies and procedures were not appropriately adhered to in certain instances to ensure that supporting documentation was maintained to evidence that costs were incurred during the period of performance and that an appropriate level of review and approval was completed prior to charging costs to a federal program. Effect - The lack of adherence to the established internal control procedures around the period of performance of the award can lead to noncompliance with laws, regulations, and the provisions of grant agreements, which could ultimately lead to expenditures not being charged to the major programs in the correct period. Questioned Costs ? $29,459 Context: Assistance Listing Number: 19.016 During our testing of the period of performance compliance requirement for grant award periods that ended during the fiscal year, we sampled 12 expenditures, totaling $292,901, for the Iraq Assistance Program and noted one item amounting to $28,766 did not have adequate supporting documentation for the subrecipient expenditures charged to the program. Additionally, during our testing of the period of performance compliance requirement for grant costs incurred throughout the year, we sampled 40 expenditures, totaling $11,811, for the Iraq Assistance Programs and noted that four items, totaling $672, did not have proper documentation for the allocation of the expenditure. Assistance Listing Number: 19.518 During our testing of the period of performance compliance requirement for grant award periods that started and ended during the fiscal year, we sampled 81 expenditures, totaling $15,252, for the Overseas Refugee Assistance Program for Western Hemisphere and noted two items, totaling $21, did not have adequate supporting documentation for the subrecipient expenditures charged to the program. Repeat Finding - This finding is not a repeat finding. Recommendation - We recommend that the Organization ensure its policies and procedures ensure that documentation of when the expenditure was incurred and liquidated is maintained and that these policies and procedures are followed on a consistent basis. Views of Responsible Officials - Management agrees with the finding and takes responsibility to comply with the period of performance compliance requirements. Management through the local offices has already developed a policy to ensure that the period of performance is adhered to.
2022-006: Internal Control Over Compliance and Compliance with Period of Performance Program: U.S. Department of State AL Number: 19.518 AL Name: Overseas Refugee Assistance Program for Western Hemisphere Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO20CA0209 September 20, 2020 through September 29, 2021 N/A September 20, 2021 through September 29, 2022 Criteria ? CFR ?200.303, Internal Controls, Section (a) states the Organization must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the federal award. Management is responsible for establishing and maintaining a system of internal control that should include controls over its grants? period of performance process. In accordance with CFR Section 200.403(h), 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 period pursuant to ?200.308(e)(3). In accordance with CFR Section 200.458, pre-award costs are those incurred prior to the effective date of the federal award or subaward directly pursuant to the negotiation and in anticipation of the federal award where such costs are necessary for efficient and timely performance of the scope of the work. Such costs are allowable only to the extent they would have been allowable if incurred after the date of the federal award and only with the written approval of the federal awarding agency. In accordance with CFR Section 200.344, the federal awarding agency or pass-through entity will close out the federal award when it determines that all applicable administrative actions and all required work of the federal award have been completed by the nonfederal entity. Per CFR Section 200.344(b), unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all obligations incurred under the federal award not later than 120 calendar days after the end date of the period of performance. Condition ? During our testing of period of performance, we noted exceptions where expenditures were incurred outside of the grant?s performance period. Cause ? Policies and procedures were not appropriately adhered to in certain instances to ensure that supporting documentation was maintained to evidence that costs were incurred during the period of performance and that an appropriate level of review and approval was completed prior to charging costs to a federal program. Effect - The lack of adherence to the established internal control procedures around the period of performance of the award can lead to noncompliance with law and regulations and possible loss of funding for the related program. Questioned Costs ? $125 Context: During our testing of the allowable costs/cost principles compliance requirements, we sampled 25 nonpayroll expenditures, totaling $6,365, for the Overseas Refugee Assistance Program for Western Hemisphere and noted that four items, totaling $125, were incurred and paid outside of the grant award period. Repeat Finding - This finding is a repeat finding from prior year. This finding was reported as finding 2021-001 in the 2021 reporting package. Recommendation - We recommend management revisits and considers revising its internal procedures around detecting expenditures incurred outside of the period of performance of the awards. Views of Responsible Officials - Management agrees with the finding and takes responsibility to comply with the period of performance compliance requirements. Management is emphasizing prompt period closing to ensure that no items are recorded in the wrong period.
2022-002: Internal Control Over Compliance and Compliance with Allowable Costs/Cost Principles Program: U.S. Department of State AL Number: 19.016 AL Name: Iraq Assistance Program Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SLMAQM19GR2288 September 29, 2019 through June 30,2022 Program: U.S. Department of State AL Number: 19.518 AL Name: Overseas Refugee Assistance Program for Western Hemisphere Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO20CA0209 September 20, 2020 through September 29, 2021 N/A September 20, 2021 through September 29, 2022 Criteria ? Code of Federal Regulation (CFR) ?200.303, Internal Controls, Section (a) states the Organization must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the federal award. Management is responsible for establishing and maintaining a system of internal control that should include controls over its activities allowed or unallowed, allowable cost/cost principle process. CFR 200.403(g) states that for costs to be allowed under federal awards, they must be adequately documented. Condition ? During our testing of period of performance, we noted exceptions in the ability of management to support expenditures incurred and charged to federal programs. Cause ? Policies and procedures were not appropriately adhered to in certain instances to ensure that supporting documentation was maintained 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. Questioned Costs ? $28,787 Context: Assistance Listing Number: 19.016 During our testing of the period of performance compliance requirement for grant award periods that ended during the fiscal year, we sampled 12 expenditures, totaling $292,901, for the Iraq Assistance Program and noted one item amounting to $28,766 did not have adequate supporting documentation for the subrecipient expenditures charged to the program. Assistance Listing Number: 19.518 During our testing of the period of performance compliance requirement for grant award periods that started and ended during the fiscal year, we sampled 80 expenditures, totaling $15,252, for the Overseas Refugee Assistance Program for Western Hemisphere and noted two items, totaling $21, did not have adequate supporting documentation for the subrecipient expenditures charged to the program. Effect ? An ineffective control system related to review of transactions to ensure that only allowable costs are charged to federal programs can lead to noncompliance with federal statutes, regulations, and the provisions of grant agreements that could ultimately lead to disallowed costs for the major programs. Repeat Finding ? This is not a repeat finding. Recommendation - We recommend that the Organization ensure its policies and procedures ensure that documentation of expenditure payment is maintained and that these policies and procedures are followed on a consistent basis. Views of Responsible Officials ? Management agrees with the finding and takes responsibility to comply with allowed and allowable requirements. Management through the local offices has already developed a policy to ensure that the period of performance is adhered to.
2022-003: Internal Control Over Compliance and Compliance with Allowable Costs/Cost Principles Program: U.S. Department of State AL Number: 19.016 AL Name: Iraq Assistance Program Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SLMAQM19GR2288 September 29, 2019 through June 30,2022 Program: U.S. Department of State AL Number: 19.518 AL Name: Overseas Refugee Assistance Program for Western Hemisphere Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO20CA0209 September 20, 2020 through September 29, 2021 N/A September 20, 2021 through September 29, 2022 Criteria ? CFR ?200.303, Internal Controls, Section (a) states the Organization must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the federal award. Management is responsible for establishing and maintaining a system of internal control that should include controls over its activities allowed or unallowed, allowable cost/cost principle process. CFR 200.403(g) states that for costs to be allowed under federal awards, they must be adequately documented. Condition ? During our testing of allowable costs and testing of period of performance for expenditures incurred throughout the year, we noted exceptions in the ability of management to support allocations of payroll and nonpayroll expenditures incurred in federal programs. Cause ? Policies and procedures were not appropriately adhered to in certain instances to ensure that supporting documentation was maintained to evidence that costs allocated to the program were allowable and that an appropriate level of review and approval was completed prior to charging costs to a federal program. Effect ? An ineffective control system related to review of transactions to ensure that only allowable costs are allocated to federal programs can lead to noncompliance with federal statutes, regulations, and the provisions of grant agreements that could ultimately lead to disallowed costs for the major programs. Questioned Costs ? $1,201 Context AL Number: 19.016 We sampled 25 payroll expenditures, totaling $9,560, for Iraq Assistance Programs and noted that two items, totaling $461, did not have proper documentation for allocation basis for the payroll expenditure charged to the program. Additionally, during our testing of the period of performance compliance requirement for grant costs incurred throughout the year, we sampled 40 expenditures, totaling $11,811, for Iraq Assistance Programs and noted that an additional two items, totaling $211, did not have proper documentation for allocation basis for payroll expenditures charged to the program. AL Number: 19.518 We sampled 25 payroll expenditures, totaling $9,068, for the Overseas Refugee Assistance Program for Western Hemisphere and noted that one item, amounting to $529, did not have proper documentation for allocation basis for the payroll expenditure charged to the program. Repeat Finding ? This is not a repeat finding. Recommendation - We recommend that the Organization ensure its policies and procedures ensure that documentation of expenditure payment and allocation is maintained and that these policies and procedures are followed on a consistent basis. Views of Responsible Officials - Management agrees with the finding and takes responsibility to comply with allowed and allowable requirements requirements. Management has developed a policy in the Iraq local office to aid in time and effort allocation.
2022-005: Internal Control Over Compliance and Compliance with Period of Performance Program: U.S. Department of State AL Number: 19.016 AL Name: Iraq Assistance Program Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SLMAQM19GR2288 September 29, 2019 through June 30,2022 Program: U.S. Department of State AL Number: 19.518 AL Name: Overseas Refugee Assistance Program for Western Hemisphere Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO20CA0209 September 20, 2020 through September 29, 2021 N/A September 20, 2021 through September 29, 2022 Criteria - CFR ?200.303, Internal Controls, Section (a) states the Organization must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the federal award. Management is responsible for establishing and maintaining a system of internal control that should include controls over its grants? period of performance process. In accordance with CFR Section 200.403(h), 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 period pursuant to ?200.308(e)(3). In accordance with CFR Section 200.458, pre-award costs are those incurred prior to the effective date of the federal award or subaward directly pursuant to the negotiation and in anticipation of the federal award where such costs are necessary for efficient and timely performance of the scope of the work. Such costs are allowable only to the extent they would have been allowable if incurred after the date of the federal award and only with the written approval of the federal awarding agency. In accordance with CFR Section 200.344, the federal awarding agency or pass-through entity will close out the federal award when it determines that all applicable administrative actions and all required work of the federal award have been completed by the nonfederal entity. Per CFR Section 200.344(b), unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all obligations incurred under the federal award not later than 120 calendar days after the end date of the period of performance. Condition ? During our testing of period of performance, we noted exceptions in the ability of management to support expenditures were incurred and charged to federal programs within the period of performance. Cause ? Policies and procedures were not appropriately adhered to in certain instances to ensure that supporting documentation was maintained to evidence that costs were incurred during the period of performance and that an appropriate level of review and approval was completed prior to charging costs to a federal program. Effect - The lack of adherence to the established internal control procedures around the period of performance of the award can lead to noncompliance with laws, regulations, and the provisions of grant agreements, which could ultimately lead to expenditures not being charged to the major programs in the correct period. Questioned Costs ? $29,459 Context: Assistance Listing Number: 19.016 During our testing of the period of performance compliance requirement for grant award periods that ended during the fiscal year, we sampled 12 expenditures, totaling $292,901, for the Iraq Assistance Program and noted one item amounting to $28,766 did not have adequate supporting documentation for the subrecipient expenditures charged to the program. Additionally, during our testing of the period of performance compliance requirement for grant costs incurred throughout the year, we sampled 40 expenditures, totaling $11,811, for the Iraq Assistance Programs and noted that four items, totaling $672, did not have proper documentation for the allocation of the expenditure. Assistance Listing Number: 19.518 During our testing of the period of performance compliance requirement for grant award periods that started and ended during the fiscal year, we sampled 81 expenditures, totaling $15,252, for the Overseas Refugee Assistance Program for Western Hemisphere and noted two items, totaling $21, did not have adequate supporting documentation for the subrecipient expenditures charged to the program. Repeat Finding - This finding is not a repeat finding. Recommendation - We recommend that the Organization ensure its policies and procedures ensure that documentation of when the expenditure was incurred and liquidated is maintained and that these policies and procedures are followed on a consistent basis. Views of Responsible Officials - Management agrees with the finding and takes responsibility to comply with the period of performance compliance requirements. Management through the local offices has already developed a policy to ensure that the period of performance is adhered to.