Section III - Federal Award Findings and Questioned Costs Finding: 2022-001 ? Other Matters ? Personnel Activity Reports (PARs) Programs: AL 84.425 Education Stabilization Fund Agency: U.S. Department of Education Criteria: Per 2 CFR 200.430(i)(vii) budget estimates alone do not qualify as support for payroll and other charges but may be used for interim accounting provided that the system used to establish the estimate produces reasonable approximations of the activity. Condition: For 4 out of 4 employees selected, no Personnel Activity Reports (PARs) were able to be provided documenting the allocation of the work performed on each grant. Cause: The School District did not comply with the requirements related to documentation of personnel expense as per CFR Title 2 Section 200.430. Effect: The use of budget estimates to allocate payroll and other charges may not be a reasonable approximation of the activity performed. Questioned Costs: None noted. Recommendation: We recommend that the School District maintain personnel activity reports for each employee. The certification will include the employee?s name and position, the period of employment, the name of the federal program, be completed after the work is done and be signed and dated by the employee periodically, in accordance with documentation requirements. Views of Responsible Officials: See Corrective Action Plan.
Section III - Federal Award Findings and Questioned Costs Finding: 2022-001 ? Other Matters ? Personnel Activity Reports (PARs) Programs: AL 84.425 Education Stabilization Fund Agency: U.S. Department of Education Criteria: Per 2 CFR 200.430(i)(vii) budget estimates alone do not qualify as support for payroll and other charges but may be used for interim accounting provided that the system used to establish the estimate produces reasonable approximations of the activity. Condition: For 4 out of 4 employees selected, no Personnel Activity Reports (PARs) were able to be provided documenting the allocation of the work performed on each grant. Cause: The School District did not comply with the requirements related to documentation of personnel expense as per CFR Title 2 Section 200.430. Effect: The use of budget estimates to allocate payroll and other charges may not be a reasonable approximation of the activity performed. Questioned Costs: None noted. Recommendation: We recommend that the School District maintain personnel activity reports for each employee. The certification will include the employee?s name and position, the period of employment, the name of the federal program, be completed after the work is done and be signed and dated by the employee periodically, in accordance with documentation requirements. Views of Responsible Officials: See Corrective Action Plan.
2022-001 Allowable Costs Research and Development Cluster: U.S. Department of Health and Human Services: Predictive Index for Elder Self-Neglect in Diverse Populations, Assistance Listing 93.734 (award number: 90EJIG0016-01-00) Leveraging Surveillance Technology to Reduce Elder Abuse Recidivism in Community Populations, Assistance Listing 93.747 (award number: 90EJIG0015-01-02) National Institutes of Health: Cultural and Caregiving Need for Chinese Elderly with Cognitive Impairment, Assistance Listing 93.361 (award number: 5R01NR014846-05) Statistically valid sample: No and it was not intended to be. Repeat finding: Not a repeat finding. Finding Type: Noncompliance Criteria: Non-federal entities should ensure that costs are reasonable and necessary for the performance of the Research and Development effort identified in the applicable award. In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees: a. Is reasonable for the services rendered and conforms to the established written policy of the non-federal entity consistently applied to both federal and non-federal activities; b. Follows an appointment made in accordance with a non-federal entity?s rules or written policies and meets the requirements of federal statute, where applicable; and c. Is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition and Context: In December of 2021, University management became aware that certain employees? salaries working under one principal investigator (PI) were not being charged to the correct grants based on the employees? time and effort on such grants. Rather, the PI requested cost transfers to move salaries to other grants that were in jeopardy of ending with unused budget dollars. University management performed a detailed review of all fiscal year 2022 salaries that were charged to this PI?s grants. Based on this review, University management determined that salaries in the amount of $199,214 were inappropriately charged to four different grants. In total, $408,775, which included the salaries and the related fringe benefit and indirect costs, were either reallocated to the correct grant, or returned to the grant sponsor before the end of fiscal year 2022. These grants are included in the research and development cluster which has approximately 3,100 grants with approximately $113 million of salaries. Cause: The PI was inappropriately reallocating the employees? time and effort through cost transfers. Effect: The salaries and related fringe benefit and indirect costs were unallowable as the employees? salaries were not supported by records that accurately reflect the work performed. Questioned Costs: Questioned costs were $408,775, however, the University refunded grantors or reallocated these costs to the correct grant during fiscal year 2022. Recommendation: The University should provide additional training to PIs to reinforce the University?s grant accounting policies and federal policies over the use of cost transfers and time and effort reporting.
2022-001 Allowable Costs Research and Development Cluster: U.S. Department of Health and Human Services: Predictive Index for Elder Self-Neglect in Diverse Populations, Assistance Listing 93.734 (award number: 90EJIG0016-01-00) Leveraging Surveillance Technology to Reduce Elder Abuse Recidivism in Community Populations, Assistance Listing 93.747 (award number: 90EJIG0015-01-02) National Institutes of Health: Cultural and Caregiving Need for Chinese Elderly with Cognitive Impairment, Assistance Listing 93.361 (award number: 5R01NR014846-05) Statistically valid sample: No and it was not intended to be. Repeat finding: Not a repeat finding. Finding Type: Noncompliance Criteria: Non-federal entities should ensure that costs are reasonable and necessary for the performance of the Research and Development effort identified in the applicable award. In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees: a. Is reasonable for the services rendered and conforms to the established written policy of the non-federal entity consistently applied to both federal and non-federal activities; b. Follows an appointment made in accordance with a non-federal entity?s rules or written policies and meets the requirements of federal statute, where applicable; and c. Is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition and Context: In December of 2021, University management became aware that certain employees? salaries working under one principal investigator (PI) were not being charged to the correct grants based on the employees? time and effort on such grants. Rather, the PI requested cost transfers to move salaries to other grants that were in jeopardy of ending with unused budget dollars. University management performed a detailed review of all fiscal year 2022 salaries that were charged to this PI?s grants. Based on this review, University management determined that salaries in the amount of $199,214 were inappropriately charged to four different grants. In total, $408,775, which included the salaries and the related fringe benefit and indirect costs, were either reallocated to the correct grant, or returned to the grant sponsor before the end of fiscal year 2022. These grants are included in the research and development cluster which has approximately 3,100 grants with approximately $113 million of salaries. Cause: The PI was inappropriately reallocating the employees? time and effort through cost transfers. Effect: The salaries and related fringe benefit and indirect costs were unallowable as the employees? salaries were not supported by records that accurately reflect the work performed. Questioned Costs: Questioned costs were $408,775, however, the University refunded grantors or reallocated these costs to the correct grant during fiscal year 2022. Recommendation: The University should provide additional training to PIs to reinforce the University?s grant accounting policies and federal policies over the use of cost transfers and time and effort reporting.
2022-001 Allowable Costs Research and Development Cluster: U.S. Department of Health and Human Services: Predictive Index for Elder Self-Neglect in Diverse Populations, Assistance Listing 93.734 (award number: 90EJIG0016-01-00) Leveraging Surveillance Technology to Reduce Elder Abuse Recidivism in Community Populations, Assistance Listing 93.747 (award number: 90EJIG0015-01-02) National Institutes of Health: Cultural and Caregiving Need for Chinese Elderly with Cognitive Impairment, Assistance Listing 93.361 (award number: 5R01NR014846-05) Statistically valid sample: No and it was not intended to be. Repeat finding: Not a repeat finding. Finding Type: Noncompliance Criteria: Non-federal entities should ensure that costs are reasonable and necessary for the performance of the Research and Development effort identified in the applicable award. In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees: a. Is reasonable for the services rendered and conforms to the established written policy of the non-federal entity consistently applied to both federal and non-federal activities; b. Follows an appointment made in accordance with a non-federal entity?s rules or written policies and meets the requirements of federal statute, where applicable; and c. Is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition and Context: In December of 2021, University management became aware that certain employees? salaries working under one principal investigator (PI) were not being charged to the correct grants based on the employees? time and effort on such grants. Rather, the PI requested cost transfers to move salaries to other grants that were in jeopardy of ending with unused budget dollars. University management performed a detailed review of all fiscal year 2022 salaries that were charged to this PI?s grants. Based on this review, University management determined that salaries in the amount of $199,214 were inappropriately charged to four different grants. In total, $408,775, which included the salaries and the related fringe benefit and indirect costs, were either reallocated to the correct grant, or returned to the grant sponsor before the end of fiscal year 2022. These grants are included in the research and development cluster which has approximately 3,100 grants with approximately $113 million of salaries. Cause: The PI was inappropriately reallocating the employees? time and effort through cost transfers. Effect: The salaries and related fringe benefit and indirect costs were unallowable as the employees? salaries were not supported by records that accurately reflect the work performed. Questioned Costs: Questioned costs were $408,775, however, the University refunded grantors or reallocated these costs to the correct grant during fiscal year 2022. Recommendation: The University should provide additional training to PIs to reinforce the University?s grant accounting policies and federal policies over the use of cost transfers and time and effort reporting.
2022-004 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: Payroll expenditures did not have time and effort documentation. Criteria: 2 CFR ?200.430(i)(1)(vii) 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. (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. Cause: District did not have a policy in place to maintain time and effort documentation for new COVID-19 programs. Context: A sample of 40 expenditures totaling $1,546,887 was selected for audit from a population of $3,350,305. The test found 10 items that were not in compliance with questioned costs totaling $569,933. Effect: The expenditures may be disallowed. Recommendation: The District needs to have time and effort documentation maintained. The District needs to develop procedures to maintain documentation supporting work performed. Repeat Finding from Prior Year: No Views of Responsible Officials and Planned Corrective Action: District was unaware of the time and effort requirement for this program. New Federal Program director is monitoring this time and effort. FY23 the time and effort documentation has been kept for this program.
2022-004 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: Payroll expenditures did not have time and effort documentation. Criteria: 2 CFR ?200.430(i)(1)(vii) 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. (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. Cause: District did not have a policy in place to maintain time and effort documentation for new COVID-19 programs. Context: A sample of 40 expenditures totaling $1,546,887 was selected for audit from a population of $3,350,305. The test found 10 items that were not in compliance with questioned costs totaling $569,933. Effect: The expenditures may be disallowed. Recommendation: The District needs to have time and effort documentation maintained. The District needs to develop procedures to maintain documentation supporting work performed. Repeat Finding from Prior Year: No Views of Responsible Officials and Planned Corrective Action: District was unaware of the time and effort requirement for this program. New Federal Program director is monitoring this time and effort. FY23 the time and effort documentation has been kept for this program.
2022-004 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: Payroll expenditures did not have time and effort documentation. Criteria: 2 CFR ?200.430(i)(1)(vii) 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. (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. Cause: District did not have a policy in place to maintain time and effort documentation for new COVID-19 programs. Context: A sample of 40 expenditures totaling $1,546,887 was selected for audit from a population of $3,350,305. The test found 10 items that were not in compliance with questioned costs totaling $569,933. Effect: The expenditures may be disallowed. Recommendation: The District needs to have time and effort documentation maintained. The District needs to develop procedures to maintain documentation supporting work performed. Repeat Finding from Prior Year: No Views of Responsible Officials and Planned Corrective Action: District was unaware of the time and effort requirement for this program. New Federal Program director is monitoring this time and effort. FY23 the time and effort documentation has been kept for this program.
2022-002 Activities Allowed or Unallowed, Allowable Costs/Cost Principles Medical Assistance Program ? CFDA No. 93.778 ? Award Period: July 1, 2021 through June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance Condition: Hours from payroll timesheets were incorrectly entered into the payroll allocation spreadsheet for five pay periods for one sampled employee. These errors were not detected and corrected after-the-fact. Criteria: According to 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per 2 CFR 200.430(i)(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 Cause: The Organization?s established internal controls over payroll cost allocation did not operate as intended. Effect: Payroll costs that are not allowable per the terms and conditions of the grant, or improper payroll costs could be charged to the grant. Recommendation: The Organization should strengthen their policies and procedures to support a system of internal control able to prevent and/or detect and correct errors timely ensuring payroll costs are accurate, allowable, and properly allocated. Views of Responsible Officials and Planned Corrective Actions: Adult Care Management, Inc. (ACMI) agrees with the finding of Taylor Roth & Company, PLLC, in the fiscal year 2022 Single Audit (SEFA) that the established internal controls over payroll cost allocation did not operate as intended to ensure appropriate allocation of payroll costs across all programs in the five (5) of the twenty-four sampled payroll periods for one (1) individual. Effective March 10, 2023, the internal control practices of ACMI will be strengthened to support a review system able to prevent and/or detect and correct errors in a timely manner to ensure payroll costs are accurate, allowable, and properly allocated. Specifically, management?s monthly review of all cost allocations will include a review of the data entry hours from payroll timesheets into the payroll allocation spreadsheet of no less than 10% of total reporting employees, with a priority focus on employees reporting time to more than one program / cost center.
Finding 2022-003 Department of Education Education Stabilization Fund - Higher Education Emergency Relief Fund ? Student Federal Financial Assistance Listing #84.425E P425E200919-20B Activities Allowed or Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control over Compliance Criteria: The Organization is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E ? Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. Condition: The University over-awarded Higher Education Emergency Relief Fund (HEERF) funding to one student based on its determination over eligibility of the student portion of HEERF funding, which is awarded based on (1) expected family contribution and (2) enrollment status. The student was awarded based on fulltime enrollment; however, the student?s enrollment status was part-time. Cause: The student listing, prepared by the registrar?s office and used by the financial aid office to determine the allocation of student funding improperly counted credit hours more than once for certain students. Effect: Ineffective controls over this area of compliance could result in a reasonable possibility that disallowed expenditures will be charged to the federal award. Questioned Costs: No questioned costs (students were overpaid) Context: A nonstatistical sample of 60 ($82,250) students out of a total of approximately 1,270 ($1,627,825) students were tested. Repeat Finding from Prior Year: No Recommendation: We recommend that management review procedures and control processes to comply with the federal requirements noted above. Views of Responsible Officials: Management agrees with the finding and the recommendation.
Finding 2022-003 ? Material Weakness: Allowable Costs & Activities ? Compliance and Control Finding ALN 84.042 ? Student Support Services, 84.044 ? Talent Search and 84.047 ? Upward Bound ? TRIO Cluster Federal Agency: U.S. Department of Education Pass-Through Entity: None ALN 47.076 ? Research and Development Cluster: National Science Foundation ?Missouri Louis Stokes Alliances for Minority Participation, Research Initiation Grant, and Entrepreneurship Federal Agency: National Science Foundation Pass-Through Entity: None ALN 84.031 ? Title III ? Higher Education ? Institutional Aid Federal Agency: U.S. Department of Education Pass-Through Entity: None Criteria Or Specific Requirement: 2 CFR section 200.403 requires adequate documentation for allowable activities and costs and 2 CFR section 200.430(i)(1) requires charges to federal awards for salaries and wages be based on records that accurately reflect the work performed. Condition: We noted through procedures performed that payroll costs were not supported with adequate documentation. Internal controls designed for these federal programs did not detect these errors. Cause: Controls over compliance put in place by management were not operating effectively as it relates to allowable costs and activities charged to the grants. Effect: Instances of noncompliance were not detected by management. Questioned Costs: TRIO Cluster - $40,361 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. National Science Foundation - $24,744 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. Title III - $34,906 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. Context: TRIO Cluster - For a sample of 40 individual costs charged to the grant, 26 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. National Science Foundation - For a sample of 40 individual costs charged to the grant, 24 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. Title III - TRIO Cluster - For a sample of 40 individual costs charged to the grant, 21 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. Identification As A Repeat Finding: 2021-003, 2021-008, 2021-015, 2020-003, and 2020-007 Recommendation: We recommend that management adjust its time-keeping process to verify that the amount of time charged to the grant is accurate and based on the employee?s time spent working on the grant. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: The University is working with our third-party payroll provider to automate time and effort reporting. We are currently using paper forms for reporting until we can implement Time & Effort through ADP. The Director of Title III & Finance Compliance officer to further discuss time and effort.
Finding 2022-003 ? Material Weakness: Allowable Costs & Activities ? Compliance and Control Finding ALN 84.042 ? Student Support Services, 84.044 ? Talent Search and 84.047 ? Upward Bound ? TRIO Cluster Federal Agency: U.S. Department of Education Pass-Through Entity: None ALN 47.076 ? Research and Development Cluster: National Science Foundation ?Missouri Louis Stokes Alliances for Minority Participation, Research Initiation Grant, and Entrepreneurship Federal Agency: National Science Foundation Pass-Through Entity: None ALN 84.031 ? Title III ? Higher Education ? Institutional Aid Federal Agency: U.S. Department of Education Pass-Through Entity: None Criteria Or Specific Requirement: 2 CFR section 200.403 requires adequate documentation for allowable activities and costs and 2 CFR section 200.430(i)(1) requires charges to federal awards for salaries and wages be based on records that accurately reflect the work performed. Condition: We noted through procedures performed that payroll costs were not supported with adequate documentation. Internal controls designed for these federal programs did not detect these errors. Cause: Controls over compliance put in place by management were not operating effectively as it relates to allowable costs and activities charged to the grants. Effect: Instances of noncompliance were not detected by management. Questioned Costs: TRIO Cluster - $40,361 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. National Science Foundation - $24,744 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. Title III - $34,906 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. Context: TRIO Cluster - For a sample of 40 individual costs charged to the grant, 26 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. National Science Foundation - For a sample of 40 individual costs charged to the grant, 24 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. Title III - TRIO Cluster - For a sample of 40 individual costs charged to the grant, 21 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. Identification As A Repeat Finding: 2021-003, 2021-008, 2021-015, 2020-003, and 2020-007 Recommendation: We recommend that management adjust its time-keeping process to verify that the amount of time charged to the grant is accurate and based on the employee?s time spent working on the grant. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: The University is working with our third-party payroll provider to automate time and effort reporting. We are currently using paper forms for reporting until we can implement Time & Effort through ADP. The Director of Title III & Finance Compliance officer to further discuss time and effort.
Finding 2022-003 ? Material Weakness: Allowable Costs & Activities ? Compliance and Control Finding ALN 84.042 ? Student Support Services, 84.044 ? Talent Search and 84.047 ? Upward Bound ? TRIO Cluster Federal Agency: U.S. Department of Education Pass-Through Entity: None ALN 47.076 ? Research and Development Cluster: National Science Foundation ?Missouri Louis Stokes Alliances for Minority Participation, Research Initiation Grant, and Entrepreneurship Federal Agency: National Science Foundation Pass-Through Entity: None ALN 84.031 ? Title III ? Higher Education ? Institutional Aid Federal Agency: U.S. Department of Education Pass-Through Entity: None Criteria Or Specific Requirement: 2 CFR section 200.403 requires adequate documentation for allowable activities and costs and 2 CFR section 200.430(i)(1) requires charges to federal awards for salaries and wages be based on records that accurately reflect the work performed. Condition: We noted through procedures performed that payroll costs were not supported with adequate documentation. Internal controls designed for these federal programs did not detect these errors. Cause: Controls over compliance put in place by management were not operating effectively as it relates to allowable costs and activities charged to the grants. Effect: Instances of noncompliance were not detected by management. Questioned Costs: TRIO Cluster - $40,361 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. National Science Foundation - $24,744 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. Title III - $34,906 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. Context: TRIO Cluster - For a sample of 40 individual costs charged to the grant, 26 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. National Science Foundation - For a sample of 40 individual costs charged to the grant, 24 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. Title III - TRIO Cluster - For a sample of 40 individual costs charged to the grant, 21 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. Identification As A Repeat Finding: 2021-003, 2021-008, 2021-015, 2020-003, and 2020-007 Recommendation: We recommend that management adjust its time-keeping process to verify that the amount of time charged to the grant is accurate and based on the employee?s time spent working on the grant. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: The University is working with our third-party payroll provider to automate time and effort reporting. We are currently using paper forms for reporting until we can implement Time & Effort through ADP. The Director of Title III & Finance Compliance officer to further discuss time and effort.
Finding 2022-003 ? Material Weakness: Allowable Costs & Activities ? Compliance and Control Finding ALN 84.042 ? Student Support Services, 84.044 ? Talent Search and 84.047 ? Upward Bound ? TRIO Cluster Federal Agency: U.S. Department of Education Pass-Through Entity: None ALN 47.076 ? Research and Development Cluster: National Science Foundation ?Missouri Louis Stokes Alliances for Minority Participation, Research Initiation Grant, and Entrepreneurship Federal Agency: National Science Foundation Pass-Through Entity: None ALN 84.031 ? Title III ? Higher Education ? Institutional Aid Federal Agency: U.S. Department of Education Pass-Through Entity: None Criteria Or Specific Requirement: 2 CFR section 200.403 requires adequate documentation for allowable activities and costs and 2 CFR section 200.430(i)(1) requires charges to federal awards for salaries and wages be based on records that accurately reflect the work performed. Condition: We noted through procedures performed that payroll costs were not supported with adequate documentation. Internal controls designed for these federal programs did not detect these errors. Cause: Controls over compliance put in place by management were not operating effectively as it relates to allowable costs and activities charged to the grants. Effect: Instances of noncompliance were not detected by management. Questioned Costs: TRIO Cluster - $40,361 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. National Science Foundation - $24,744 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. Title III - $34,906 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. Context: TRIO Cluster - For a sample of 40 individual costs charged to the grant, 26 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. National Science Foundation - For a sample of 40 individual costs charged to the grant, 24 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. Title III - TRIO Cluster - For a sample of 40 individual costs charged to the grant, 21 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. Identification As A Repeat Finding: 2021-003, 2021-008, 2021-015, 2020-003, and 2020-007 Recommendation: We recommend that management adjust its time-keeping process to verify that the amount of time charged to the grant is accurate and based on the employee?s time spent working on the grant. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: The University is working with our third-party payroll provider to automate time and effort reporting. We are currently using paper forms for reporting until we can implement Time & Effort through ADP. The Director of Title III & Finance Compliance officer to further discuss time and effort.
Finding 2022-003 ? Material Weakness: Allowable Costs & Activities ? Compliance and Control Finding ALN 84.042 ? Student Support Services, 84.044 ? Talent Search and 84.047 ? Upward Bound ? TRIO Cluster Federal Agency: U.S. Department of Education Pass-Through Entity: None ALN 47.076 ? Research and Development Cluster: National Science Foundation ?Missouri Louis Stokes Alliances for Minority Participation, Research Initiation Grant, and Entrepreneurship Federal Agency: National Science Foundation Pass-Through Entity: None ALN 84.031 ? Title III ? Higher Education ? Institutional Aid Federal Agency: U.S. Department of Education Pass-Through Entity: None Criteria Or Specific Requirement: 2 CFR section 200.403 requires adequate documentation for allowable activities and costs and 2 CFR section 200.430(i)(1) requires charges to federal awards for salaries and wages be based on records that accurately reflect the work performed. Condition: We noted through procedures performed that payroll costs were not supported with adequate documentation. Internal controls designed for these federal programs did not detect these errors. Cause: Controls over compliance put in place by management were not operating effectively as it relates to allowable costs and activities charged to the grants. Effect: Instances of noncompliance were not detected by management. Questioned Costs: TRIO Cluster - $40,361 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. National Science Foundation - $24,744 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. Title III - $34,906 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. Context: TRIO Cluster - For a sample of 40 individual costs charged to the grant, 26 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. National Science Foundation - For a sample of 40 individual costs charged to the grant, 24 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. Title III - TRIO Cluster - For a sample of 40 individual costs charged to the grant, 21 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. Identification As A Repeat Finding: 2021-003, 2021-008, 2021-015, 2020-003, and 2020-007 Recommendation: We recommend that management adjust its time-keeping process to verify that the amount of time charged to the grant is accurate and based on the employee?s time spent working on the grant. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: The University is working with our third-party payroll provider to automate time and effort reporting. We are currently using paper forms for reporting until we can implement Time & Effort through ADP. The Director of Title III & Finance Compliance officer to further discuss time and effort.
Finding 2022-007 ? Material Weakness: Allowable Costs & Activities and Period of Performance? Compliance and Control Finding ALN 84.425F ? Higher Education Emergency Relief Fund (HEERF) Institutional Portion Federal Agency: U.S. Department of Education Pass-Through Entity: None Criteria Or Specific Requirement: The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA) section 314(c )(1-3) notes that HEERF Institutional Portion funds are to be used to defray expenses associated with coronavirus or to carry out student support activities that address needs related to coronavirus. 2 CFR section 200.403 requires adequate documentation for allowable activities and costs and 2 CFR section 200.430(i)(1) requires charges to federal awards for salaries and wages be based on records that accurately reflect the work performed. Condition: We noted through procedures performed that costs were not supported with adequate documentation. Internal controls designed for this federal program did not detect these errors. Cause: Controls over compliance put in place by management were not operating effectively as it relates to allowable costs and activities charged to the grant. Effect: Instances of noncompliance were not detected by management. Questioned Costs: $766,177 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. Context: For a sample of 23 individual costs charged to the grant, 4 items tested, all payroll related, did not include adequate documentation. For the payroll items, the University did not provide documentation to support the time and effort of each student worker charged to the grant. For a sample of 23 individual costs charged to the grant, 7 items tested were utilized to cover costs related to building renovations and the associated project management. The documentation provided did not indicate that these costs were utilized to defray expenses associated with coronavirus. The control over compliance to ensure costs charged to the grant were allowable did not operate effectively. Statistical sampling was not used to test this compliance requirement. Identification As A Repeat Finding: 2021-010 Recommendation: We recommend that management review its processes and controls surrounding applicable compliance requirements to improve the existing system such that it will ensure compliance with the requirements of federal grants. In addition, we recommend that management adjust its time-keeping process to verify that the amount of time charged to the grant is accurate and based on the employee?s time spent working on the grant. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: The University's current process is to collect and retain procurement documents for no less than five years. The institution will work to strengthen the current process in place relevant to securing adequate documentation. Supporting documentation was provided for data selection relating to the upgrades to the HVAC, ventilation, and the spacing of the academic facilities which were all completed in accordance with Covid guidelines. The University is working with our third-party payroll provider to automate time and effort reporting.. We are currently using paper forms for reporting until we can implement Time & Effort through ADP. The Director of Title III & Finance Compliance officer to further discuss time and effort.
Finding 2022-003 ? Material Weakness: Allowable Costs & Activities ? Compliance and Control Finding ALN 84.042 ? Student Support Services, 84.044 ? Talent Search and 84.047 ? Upward Bound ? TRIO Cluster Federal Agency: U.S. Department of Education Pass-Through Entity: None ALN 47.076 ? Research and Development Cluster: National Science Foundation ?Missouri Louis Stokes Alliances for Minority Participation, Research Initiation Grant, and Entrepreneurship Federal Agency: National Science Foundation Pass-Through Entity: None ALN 84.031 ? Title III ? Higher Education ? Institutional Aid Federal Agency: U.S. Department of Education Pass-Through Entity: None Criteria Or Specific Requirement: 2 CFR section 200.403 requires adequate documentation for allowable activities and costs and 2 CFR section 200.430(i)(1) requires charges to federal awards for salaries and wages be based on records that accurately reflect the work performed. Condition: We noted through procedures performed that payroll costs were not supported with adequate documentation. Internal controls designed for these federal programs did not detect these errors. Cause: Controls over compliance put in place by management were not operating effectively as it relates to allowable costs and activities charged to the grants. Effect: Instances of noncompliance were not detected by management. Questioned Costs: TRIO Cluster - $40,361 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. National Science Foundation - $24,744 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. Title III - $34,906 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. Context: TRIO Cluster - For a sample of 40 individual costs charged to the grant, 26 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. National Science Foundation - For a sample of 40 individual costs charged to the grant, 24 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. Title III - TRIO Cluster - For a sample of 40 individual costs charged to the grant, 21 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. Identification As A Repeat Finding: 2021-003, 2021-008, 2021-015, 2020-003, and 2020-007 Recommendation: We recommend that management adjust its time-keeping process to verify that the amount of time charged to the grant is accurate and based on the employee?s time spent working on the grant. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: The University is working with our third-party payroll provider to automate time and effort reporting. We are currently using paper forms for reporting until we can implement Time & Effort through ADP. The Director of Title III & Finance Compliance officer to further discuss time and effort.
Finding 2022-003 ? Material Weakness: Allowable Costs & Activities ? Compliance and Control Finding ALN 84.042 ? Student Support Services, 84.044 ? Talent Search and 84.047 ? Upward Bound ? TRIO Cluster Federal Agency: U.S. Department of Education Pass-Through Entity: None ALN 47.076 ? Research and Development Cluster: National Science Foundation ?Missouri Louis Stokes Alliances for Minority Participation, Research Initiation Grant, and Entrepreneurship Federal Agency: National Science Foundation Pass-Through Entity: None ALN 84.031 ? Title III ? Higher Education ? Institutional Aid Federal Agency: U.S. Department of Education Pass-Through Entity: None Criteria Or Specific Requirement: 2 CFR section 200.403 requires adequate documentation for allowable activities and costs and 2 CFR section 200.430(i)(1) requires charges to federal awards for salaries and wages be based on records that accurately reflect the work performed. Condition: We noted through procedures performed that payroll costs were not supported with adequate documentation. Internal controls designed for these federal programs did not detect these errors. Cause: Controls over compliance put in place by management were not operating effectively as it relates to allowable costs and activities charged to the grants. Effect: Instances of noncompliance were not detected by management. Questioned Costs: TRIO Cluster - $40,361 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. National Science Foundation - $24,744 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. Title III - $34,906 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. Context: TRIO Cluster - For a sample of 40 individual costs charged to the grant, 26 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. National Science Foundation - For a sample of 40 individual costs charged to the grant, 24 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. Title III - TRIO Cluster - For a sample of 40 individual costs charged to the grant, 21 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. Identification As A Repeat Finding: 2021-003, 2021-008, 2021-015, 2020-003, and 2020-007 Recommendation: We recommend that management adjust its time-keeping process to verify that the amount of time charged to the grant is accurate and based on the employee?s time spent working on the grant. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: The University is working with our third-party payroll provider to automate time and effort reporting. We are currently using paper forms for reporting until we can implement Time & Effort through ADP. The Director of Title III & Finance Compliance officer to further discuss time and effort.
Finding 2022-003 ? Material Weakness: Allowable Costs & Activities ? Compliance and Control Finding ALN 84.042 ? Student Support Services, 84.044 ? Talent Search and 84.047 ? Upward Bound ? TRIO Cluster Federal Agency: U.S. Department of Education Pass-Through Entity: None ALN 47.076 ? Research and Development Cluster: National Science Foundation ?Missouri Louis Stokes Alliances for Minority Participation, Research Initiation Grant, and Entrepreneurship Federal Agency: National Science Foundation Pass-Through Entity: None ALN 84.031 ? Title III ? Higher Education ? Institutional Aid Federal Agency: U.S. Department of Education Pass-Through Entity: None Criteria Or Specific Requirement: 2 CFR section 200.403 requires adequate documentation for allowable activities and costs and 2 CFR section 200.430(i)(1) requires charges to federal awards for salaries and wages be based on records that accurately reflect the work performed. Condition: We noted through procedures performed that payroll costs were not supported with adequate documentation. Internal controls designed for these federal programs did not detect these errors. Cause: Controls over compliance put in place by management were not operating effectively as it relates to allowable costs and activities charged to the grants. Effect: Instances of noncompliance were not detected by management. Questioned Costs: TRIO Cluster - $40,361 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. National Science Foundation - $24,744 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. Title III - $34,906 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. Context: TRIO Cluster - For a sample of 40 individual costs charged to the grant, 26 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. National Science Foundation - For a sample of 40 individual costs charged to the grant, 24 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. Title III - TRIO Cluster - For a sample of 40 individual costs charged to the grant, 21 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. Identification As A Repeat Finding: 2021-003, 2021-008, 2021-015, 2020-003, and 2020-007 Recommendation: We recommend that management adjust its time-keeping process to verify that the amount of time charged to the grant is accurate and based on the employee?s time spent working on the grant. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: The University is working with our third-party payroll provider to automate time and effort reporting. We are currently using paper forms for reporting until we can implement Time & Effort through ADP. The Director of Title III & Finance Compliance officer to further discuss time and effort.
Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the District, as a recipient of Federal funds, 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. In addition, under 2 CFR 200.430, it states that 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, (2) be incorporated into the official records of the non-Federal entity, (3) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, and (4) 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 or a federal award and non-Federal award. Condition: During our review of payroll charged to the grant, we noted two employees who did not have documentation to support the distribution of the employee's time spent on grant activities. Cause: Administrative oversight. Effect: The District did not have adequate documentation to support the distribution of the employee's wages paid using grant funds. Questioned Costs: $52,911 Repeat Finding: No Recommendation: We recommend that documentation be retained to support the distribution of salaries and wages for all employees paid using grant funds. Views of Responsible Officials: Management's views and corrective action plan is included at the end of this report.
Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the District, as a recipient of Federal funds, 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. In addition, under 2 CFR 200.430, it states that 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, (2) be incorporated into the official records of the non-Federal entity, (3) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, and (4) 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 or a federal award and non-Federal award. Condition: During our review of payroll charged to the grant, we noted two employees who did not have documentation to support the distribution of the employee's time spent on grant activities. Cause: Administrative oversight. Effect: The District did not have adequate documentation to support the distribution of the employee's wages paid using grant funds. Questioned Costs: $52,911 Repeat Finding: No Recommendation: We recommend that documentation be retained to support the distribution of salaries and wages for all employees paid using grant funds. Views of Responsible Officials: Management's views and corrective action plan is included at the end of this report.
Finding 2022-001 Budget Based Salary Allocation (Compliance and Control Finding) Repeat Finding No Federal Program Title U.S. Department of Health and Human Services 93.566 Refugee and Entrant Assistance State / Replacement Designee Administered Programs Contract Number FCSAK05984 Award Year 2021 ? 2022 Finding The Jewish Federation of Metropolitan Chicago (the Federation) allocated staff salaries to the federal program based on budget estimates, which alone does not qualify as support for charges to federal awards. Criteria 2 CFR 200.430(i) 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 be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that the non-federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the federal award is accurate, allowable, and properly allocated. Condition The Federation allocated one employees? salary to the program based on a budgeted rate. Out of the 13 payments made to employees tested (five employees), two payments were based on an allocation of less than 100% (related to one employee during the grant year) to the program. All other employees tested have 100% of their salaries allocated to the program. Cause Per the Federation, the refugee program staff are the only government grant-funded staff within the organization making it infeasible to change the electronic time and attendance system which does not have a provision that allows time to be tracked by funding source. Beginning in FY23, the Federation only charges salaries to the program for staff that work 100% on this grant. Effect Noncompliance with federal regulations could result in the loss of future federal funding. Context We tested five employees whose salaries were applied to the federal program. For each employee selected, selected payroll related samples as a portion of our testing during the fiscal year. This finding was found during the review of the supporting documentation provided. Section III. Federal Awards Findings and Questioned Costs (Continued) Questioned Costs Total questioned costs were approximately $10,000 (allocated portion of the selected employee?s salary). Recommendation As the Federation does not have processes and controls in place for federal program time tracking, we recommend that only staff that allocate 100% of their time to the program be charged to the program. Views of Responsible Officials Management is in agreement with this finding. See corrective action plan.
Criteria: Federal regulation 2 CFR ?200.430 states that ?charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.? Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? Be incorporated into the official records of the non-Federal entity. ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. ? Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; ? Comply with the established accounting policies and practices of the non-Federal entity. ? 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. ? Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a total of 26 employees with salaries and benefits charged to the federal programs noted above during the 2021-22 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR ?200.430. Questioned Costs: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs.Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single funded employees and monthly certifications for multi-funded employees.
Criteria: Federal regulation 2 CFR ?200.430 states that ?charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.? Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? Be incorporated into the official records of the non-Federal entity. ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. ? Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; ? Comply with the established accounting policies and practices of the non-Federal entity. ? 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. ? Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a total of 26 employees with salaries and benefits charged to the federal programs noted above during the 2021-22 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR ?200.430. Questioned Costs: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs.Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single funded employees and monthly certifications for multi-funded employees.
Criteria: Federal regulation 2 CFR ?200.430 states that ?charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.? Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? Be incorporated into the official records of the non-Federal entity. ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. ? Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; ? Comply with the established accounting policies and practices of the non-Federal entity. ? 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. ? Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a total of 26 employees with salaries and benefits charged to the federal programs noted above during the 2021-22 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR ?200.430. Questioned Costs: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs.Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single funded employees and monthly certifications for multi-funded employees.
Criteria: Federal regulation 2 CFR ?200.430 states that ?charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.? Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? Be incorporated into the official records of the non-Federal entity. ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. ? Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; ? Comply with the established accounting policies and practices of the non-Federal entity. ? 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. ? Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a total of 26 employees with salaries and benefits charged to the federal programs noted above during the 2021-22 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR ?200.430. Questioned Costs: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs.Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single funded employees and monthly certifications for multi-funded employees.
Criteria: Federal regulation 2 CFR ?200.430 states that ?charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.? Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? Be incorporated into the official records of the non-Federal entity. ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. ? Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; ? Comply with the established accounting policies and practices of the non-Federal entity. ? 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. ? Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a total of 26 employees with salaries and benefits charged to the federal programs noted above during the 2021-22 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR ?200.430. Questioned Costs: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs.Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single funded employees and monthly certifications for multi-funded employees.
Criteria: Federal regulation 2 CFR ?200.430 states that ?charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.? Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? Be incorporated into the official records of the non-Federal entity. ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. ? Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; ? Comply with the established accounting policies and practices of the non-Federal entity. ? 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. ? Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a total of 26 employees with salaries and benefits charged to the federal programs noted above during the 2021-22 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR ?200.430. Questioned Costs: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs.Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single funded employees and monthly certifications for multi-funded employees.
Criteria: Federal regulation 2 CFR ?200.430 states that ?charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.? Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? Be incorporated into the official records of the non-Federal entity. ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. ? Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; ? Comply with the established accounting policies and practices of the non-Federal entity. ? 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. ? Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a total of 26 employees with salaries and benefits charged to the federal programs noted above during the 2021-22 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR ?200.430. Questioned Costs: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs.Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single funded employees and monthly certifications for multi-funded employees.
Criteria: Federal regulation 2 CFR ?200.430 states that ?charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.? Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? Be incorporated into the official records of the non-Federal entity. ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. ? Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; ? Comply with the established accounting policies and practices of the non-Federal entity. ? 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. ? Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a total of 26 employees with salaries and benefits charged to the federal programs noted above during the 2021-22 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR ?200.430. Questioned Costs: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs.Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single funded employees and monthly certifications for multi-funded employees.
Criteria: Federal regulation 2 CFR ?200.430 states that ?charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.? Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? Be incorporated into the official records of the non-Federal entity. ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. ? Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; ? Comply with the established accounting policies and practices of the non-Federal entity. ? 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. ? Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a total of 26 employees with salaries and benefits charged to the federal programs noted above during the 2021-22 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR ?200.430. Questioned Costs: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs.Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single funded employees and monthly certifications for multi-funded employees.
2022-001 ? Allowable Cost/Cost Principal Federal Program Information: Department of Education: Passed through the State of Maine Agency of Education ALN ? 84.425 ? Education Stabilization Fund Criteria: The following CFR(s) apply to this finding: 2 CFR 200.430(i)(1)(vii). Condition: During audit procedures, it was identified that the Unit did not complete the semi-annual time certifications/periodic time certifications for six employees. Cause: The District does not have the necessary internal controls over compliance. Effect: Expenses may not be properly allocated to the grant; this could result in unallowable expenses being charged and subsequently improperly reimbursed by federal funds. Identification of Questioned Costs: None identified. Context: A sample of six time certifications was reviewed. This is a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the District implement internal control processes and procedures to ensure that time and effort records for employees working are properly documented in accordance with the grant requirements. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by Five Towns Community School District.
2022-001 ? Allowable Cost/Cost Principal Federal Program Information: Department of Education: Passed through the State of Maine Agency of Education ALN ? 84.425 ? Education Stabilization Fund Criteria: The following CFR(s) apply to this finding: 2 CFR 200.430(i)(1)(vii). Condition: During audit procedures, it was identified that the Unit did not complete the semi-annual time certifications/periodic time certifications for six employees. Cause: The District does not have the necessary internal controls over compliance. Effect: Expenses may not be properly allocated to the grant; this could result in unallowable expenses being charged and subsequently improperly reimbursed by federal funds. Identification of Questioned Costs: None identified. Context: A sample of six time certifications was reviewed. This is a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the District implement internal control processes and procedures to ensure that time and effort records for employees working are properly documented in accordance with the grant requirements. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by Five Towns Community School District.
2022-001 ? Allowable Cost/Cost Principal Federal Program Information: Department of Education: Passed through the State of Maine Agency of Education ALN ? 84.425 ? Education Stabilization Fund Criteria: The following CFR(s) apply to this finding: 2 CFR 200.430(i)(1)(vii). Condition: During audit procedures, it was identified that the Unit did not complete the semi-annual time certifications/periodic time certifications for six employees. Cause: The District does not have the necessary internal controls over compliance. Effect: Expenses may not be properly allocated to the grant; this could result in unallowable expenses being charged and subsequently improperly reimbursed by federal funds. Identification of Questioned Costs: None identified. Context: A sample of six time certifications was reviewed. This is a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the District implement internal control processes and procedures to ensure that time and effort records for employees working are properly documented in accordance with the grant requirements. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by Five Towns Community School District.
2022-003 Department of Education Federal Financial Assistance Listing 84.425E, 84.425F, 84.425K Federal Award Numbers P425E201501, P425E201757, P425E200021, award year 2021 COVID-19 Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: The College is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E ? Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. 2 CFR 200.403(h) establishes that costs must be incurred during the approved budget period. Condition: In our sample of expenditures selected for testing, we noted the following items; a) Through testing of operational expenditures of the College, it was determined; a. Payroll expenditures charged to the award were not for costs newly associated with the coronavirus, a requirement communicated within the supplemental guidance in the Higher Education Emergency Relief Fund III Frequently Asked Questions published May 11, 2021 and updated May 24, 2021. b) Through testing of disbursements to students, it was determined; a. No support could not be provided to substantiate a secondary level of review was completed prior to disbursement of funds. b. 26 instances identified in which the College directly controlled how student?s use their emergency financial aid grant. c. 8 instances identified in which college discharged outstanding balance on student account for costs incurred prior to March 13, 2020. d. 2 instances identified in which the College charged coronavirus vaccine incentive payments under the student portion of HEERF award. Cause: The College did not have a full understanding of the federal program requirements between HEERF I, II and III as it relates to Activities Allowed, Allowable Costs, and Period of Performance. Effect: The College?s controls did not detect or correct the errors identified, which resulted in disallowed costs charged to the federal awards. Questioned Costs: Total questioned costs of $2,219,674Context/Sampling: a) For operational expenditures of the College a nonstatistical sample of 60 expenditures was selected for testing, including 7 non-payroll expenditures out of approximately 50 non-payroll transactions, accounting for approximately $143,000 of $245,000 total non-payroll costs charged to the federal program, and 53 payroll expenditures out of approximately 6,700 payroll transactions, accounting for approximately $74,000 of $1,920,000 total payroll costs charged to the federal program. b) For disbursements to students of the College a nonstatistical sample of 60 expenditures was selected for testing, including 43 disbursements funded from institutional portion out of approximately 600, accounting for approximately $53,000 of $711,000 total disbursements to students funded through institutional portion charged to the federal program, and 17 disbursements funded from student portion out of approximately 400, accounting for approximately $74,000 of $246,000 total disbursements to students funded through student portion charged to the federal program. Repeat Finding from Prior Year: No Recommendation: We recommend management review procedures and control processes to comply with federal requirements noted above. Views of Responsible Officials: Management is in agreement with the finding.
2022-003 Department of Education Federal Financial Assistance Listing 84.425E, 84.425F, 84.425K Federal Award Numbers P425E201501, P425E201757, P425E200021, award year 2021 COVID-19 Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: The College is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E ? Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. 2 CFR 200.403(h) establishes that costs must be incurred during the approved budget period. Condition: In our sample of expenditures selected for testing, we noted the following items; a) Through testing of operational expenditures of the College, it was determined; a. Payroll expenditures charged to the award were not for costs newly associated with the coronavirus, a requirement communicated within the supplemental guidance in the Higher Education Emergency Relief Fund III Frequently Asked Questions published May 11, 2021 and updated May 24, 2021. b) Through testing of disbursements to students, it was determined; a. No support could not be provided to substantiate a secondary level of review was completed prior to disbursement of funds. b. 26 instances identified in which the College directly controlled how student?s use their emergency financial aid grant. c. 8 instances identified in which college discharged outstanding balance on student account for costs incurred prior to March 13, 2020. d. 2 instances identified in which the College charged coronavirus vaccine incentive payments under the student portion of HEERF award. Cause: The College did not have a full understanding of the federal program requirements between HEERF I, II and III as it relates to Activities Allowed, Allowable Costs, and Period of Performance. Effect: The College?s controls did not detect or correct the errors identified, which resulted in disallowed costs charged to the federal awards. Questioned Costs: Total questioned costs of $2,219,674Context/Sampling: a) For operational expenditures of the College a nonstatistical sample of 60 expenditures was selected for testing, including 7 non-payroll expenditures out of approximately 50 non-payroll transactions, accounting for approximately $143,000 of $245,000 total non-payroll costs charged to the federal program, and 53 payroll expenditures out of approximately 6,700 payroll transactions, accounting for approximately $74,000 of $1,920,000 total payroll costs charged to the federal program. b) For disbursements to students of the College a nonstatistical sample of 60 expenditures was selected for testing, including 43 disbursements funded from institutional portion out of approximately 600, accounting for approximately $53,000 of $711,000 total disbursements to students funded through institutional portion charged to the federal program, and 17 disbursements funded from student portion out of approximately 400, accounting for approximately $74,000 of $246,000 total disbursements to students funded through student portion charged to the federal program. Repeat Finding from Prior Year: No Recommendation: We recommend management review procedures and control processes to comply with federal requirements noted above. Views of Responsible Officials: Management is in agreement with the finding.
2022-003 Department of Education Federal Financial Assistance Listing 84.425E, 84.425F, 84.425K Federal Award Numbers P425E201501, P425E201757, P425E200021, award year 2021 COVID-19 Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: The College is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E ? Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. 2 CFR 200.403(h) establishes that costs must be incurred during the approved budget period. Condition: In our sample of expenditures selected for testing, we noted the following items; a) Through testing of operational expenditures of the College, it was determined; a. Payroll expenditures charged to the award were not for costs newly associated with the coronavirus, a requirement communicated within the supplemental guidance in the Higher Education Emergency Relief Fund III Frequently Asked Questions published May 11, 2021 and updated May 24, 2021. b) Through testing of disbursements to students, it was determined; a. No support could not be provided to substantiate a secondary level of review was completed prior to disbursement of funds. b. 26 instances identified in which the College directly controlled how student?s use their emergency financial aid grant. c. 8 instances identified in which college discharged outstanding balance on student account for costs incurred prior to March 13, 2020. d. 2 instances identified in which the College charged coronavirus vaccine incentive payments under the student portion of HEERF award. Cause: The College did not have a full understanding of the federal program requirements between HEERF I, II and III as it relates to Activities Allowed, Allowable Costs, and Period of Performance. Effect: The College?s controls did not detect or correct the errors identified, which resulted in disallowed costs charged to the federal awards. Questioned Costs: Total questioned costs of $2,219,674Context/Sampling: a) For operational expenditures of the College a nonstatistical sample of 60 expenditures was selected for testing, including 7 non-payroll expenditures out of approximately 50 non-payroll transactions, accounting for approximately $143,000 of $245,000 total non-payroll costs charged to the federal program, and 53 payroll expenditures out of approximately 6,700 payroll transactions, accounting for approximately $74,000 of $1,920,000 total payroll costs charged to the federal program. b) For disbursements to students of the College a nonstatistical sample of 60 expenditures was selected for testing, including 43 disbursements funded from institutional portion out of approximately 600, accounting for approximately $53,000 of $711,000 total disbursements to students funded through institutional portion charged to the federal program, and 17 disbursements funded from student portion out of approximately 400, accounting for approximately $74,000 of $246,000 total disbursements to students funded through student portion charged to the federal program. Repeat Finding from Prior Year: No Recommendation: We recommend management review procedures and control processes to comply with federal requirements noted above. Views of Responsible Officials: Management is in agreement with the finding.
Criteria: 2 CFR, Part 200, Section 200.430 requires that charges to federal awards for salaries and wages be based on records that adequately reflect the work performed. These records must be supported by a system of internal controls that provide reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: The District did not maintain complete supporting documentation, time and effort logs, for salaries and wages charged to the grant. Cause: The District did not follow the requirement to maintain time and effort logs under this grant. Effect: The District does not have complete time and effort logs that fully document the time spent by employees under this grant. Recommendation: We recommend that the District maintain appropriate and complete time and effort logs for various grants, as applicable.
Criteria: 2 CFR, Part 200, Section 200.430 requires that charges to federal awards for salaries and wages be based on records that adequately reflect the work performed. These records must be supported by a system of internal controls that provide reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: The District did not maintain complete supporting documentation, time and effort logs, for salaries and wages charged to the grant. Cause: The District did not follow the requirement to maintain time and effort logs under this grant. Effect: The District does not have complete time and effort logs that fully document the time spent by employees under this grant. Recommendation: We recommend that the District maintain appropriate and complete time and effort logs for various grants, as applicable.
Criteria: 2 CFR, Part 200, Section 200.430 requires that charges to federal awards for salaries and wages be based on records that adequately reflect the work performed. These records must be supported by a system of internal controls that provide reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: The District did not maintain complete supporting documentation, time and effort logs, for salaries and wages charged to the grant. Cause: The District did not follow the requirement to maintain time and effort logs under this grant. Effect: The District does not have complete time and effort logs that fully document the time spent by employees under this grant. Recommendation: We recommend that the District maintain appropriate and complete time and effort logs for various grants, as applicable.
Criteria: 2 CFR, Part 200, Section 200.430 requires that charges to federal awards for salaries and wages be based on records that adequately reflect the work performed. These records must be supported by a system of internal controls that provide reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: The District did not maintain complete supporting documentation, time and effort logs, for salaries and wages charged to the grant. Cause: The District did not follow the requirement to maintain time and effort logs under this grant. Effect: The District does not have complete time and effort logs that fully document the time spent by employees under this grant. Recommendation: We recommend that the District maintain appropriate and complete time and effort logs for various grants, as applicable.
Criteria: 2 CFR, Part 200, Section 200.430 requires that charges to federal awards for salaries and wages be based on records that adequately reflect the work performed. These records must be supported by a system of internal controls that provide reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: The District did not maintain complete supporting documentation, time and effort logs, for salaries and wages charged to the grant. Cause: The District did not follow the requirement to maintain time and effort logs under this grant. Effect: The District does not have complete time and effort logs that fully document the time spent by employees under this grant. Recommendation: We recommend that the District maintain appropriate and complete time and effort logs for various grants, as applicable.
FINDING 2022-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - 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): FY 20/21, FY 21/22 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 A sample of 40 vendor disbursements from the School Lunch fund was selected for testing to verify the transactions were for allowable activities and costs. There were 3 of the 40 transactions, totaling $4,129, that were paid to vendors for which the School Corporation could not provide documentation to support the costs. As such, the 3 transactions could not be verified as an allowable activity or cost of the food service program and were considered questioned costs. Due to the number and magnitude of exceptions, per auditor judgment, we concluded it would not be appropriate to examine the remaining 29 disbursements. Additionally, the School Corporation incurred costs in the amount of $49,365 paid from the School Lunch fund for a vehicle used to distribute meals to students at the Indiana Department of Education approved meal sites during the COVID-19 pandemic shutdown. The School Corporation could not provide supporting documentation that prior written approval was received from the pass-through entity. Finally, in fiscal year 2021-2022, the School Corporation paid a portion of the Assistant Superintendent of Schools salary from the School Lunch fund without supporting documentation to support the percentage paid. The Assistant Superintendent of Schools spent time on federal program and nonfederal program activities, but did not maintain documentation of time spent on each activity. The total paid to the Assistant Superintendent of Schools from the School Lunch fund without proper documentation was $29,753. The costs that were not properly documented were considered questioned costs. The lack of internal controls, availability of supporting documentation, 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 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (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: ". . . 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 200.439(b) states in part: "The following rules of allowability must apply to equipment and other capital expenditures: (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. . . ." 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. . . ." Cause Management had not established an effective system of internal controls that would have ensured compliance or that supporting documentation would have been maintained and made available for audit 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 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 $83,247 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 to 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 2022-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - 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): FY 20/21, FY 21/22 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 A sample of 40 vendor disbursements from the School Lunch fund was selected for testing to verify the transactions were for allowable activities and costs. There were 3 of the 40 transactions, totaling $4,129, that were paid to vendors for which the School Corporation could not provide documentation to support the costs. As such, the 3 transactions could not be verified as an allowable activity or cost of the food service program and were considered questioned costs. Due to the number and magnitude of exceptions, per auditor judgment, we concluded it would not be appropriate to examine the remaining 29 disbursements. Additionally, the School Corporation incurred costs in the amount of $49,365 paid from the School Lunch fund for a vehicle used to distribute meals to students at the Indiana Department of Education approved meal sites during the COVID-19 pandemic shutdown. The School Corporation could not provide supporting documentation that prior written approval was received from the pass-through entity. Finally, in fiscal year 2021-2022, the School Corporation paid a portion of the Assistant Superintendent of Schools salary from the School Lunch fund without supporting documentation to support the percentage paid. The Assistant Superintendent of Schools spent time on federal program and nonfederal program activities, but did not maintain documentation of time spent on each activity. The total paid to the Assistant Superintendent of Schools from the School Lunch fund without proper documentation was $29,753. The costs that were not properly documented were considered questioned costs. The lack of internal controls, availability of supporting documentation, 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 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (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: ". . . 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 200.439(b) states in part: "The following rules of allowability must apply to equipment and other capital expenditures: (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. . . ." 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. . . ." Cause Management had not established an effective system of internal controls that would have ensured compliance or that supporting documentation would have been maintained and made available for audit 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 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 $83,247 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 to 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 2022-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - 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): FY 20/21, FY 21/22 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 A sample of 40 vendor disbursements from the School Lunch fund was selected for testing to verify the transactions were for allowable activities and costs. There were 3 of the 40 transactions, totaling $4,129, that were paid to vendors for which the School Corporation could not provide documentation to support the costs. As such, the 3 transactions could not be verified as an allowable activity or cost of the food service program and were considered questioned costs. Due to the number and magnitude of exceptions, per auditor judgment, we concluded it would not be appropriate to examine the remaining 29 disbursements. Additionally, the School Corporation incurred costs in the amount of $49,365 paid from the School Lunch fund for a vehicle used to distribute meals to students at the Indiana Department of Education approved meal sites during the COVID-19 pandemic shutdown. The School Corporation could not provide supporting documentation that prior written approval was received from the pass-through entity. Finally, in fiscal year 2021-2022, the School Corporation paid a portion of the Assistant Superintendent of Schools salary from the School Lunch fund without supporting documentation to support the percentage paid. The Assistant Superintendent of Schools spent time on federal program and nonfederal program activities, but did not maintain documentation of time spent on each activity. The total paid to the Assistant Superintendent of Schools from the School Lunch fund without proper documentation was $29,753. The costs that were not properly documented were considered questioned costs. The lack of internal controls, availability of supporting documentation, 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 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (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: ". . . 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 200.439(b) states in part: "The following rules of allowability must apply to equipment and other capital expenditures: (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. . . ." 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. . . ." Cause Management had not established an effective system of internal controls that would have ensured compliance or that supporting documentation would have been maintained and made available for audit 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 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 $83,247 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 to 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 2022-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - 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): FY 20/21, FY 21/22 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 A sample of 40 vendor disbursements from the School Lunch fund was selected for testing to verify the transactions were for allowable activities and costs. There were 3 of the 40 transactions, totaling $4,129, that were paid to vendors for which the School Corporation could not provide documentation to support the costs. As such, the 3 transactions could not be verified as an allowable activity or cost of the food service program and were considered questioned costs. Due to the number and magnitude of exceptions, per auditor judgment, we concluded it would not be appropriate to examine the remaining 29 disbursements. Additionally, the School Corporation incurred costs in the amount of $49,365 paid from the School Lunch fund for a vehicle used to distribute meals to students at the Indiana Department of Education approved meal sites during the COVID-19 pandemic shutdown. The School Corporation could not provide supporting documentation that prior written approval was received from the pass-through entity. Finally, in fiscal year 2021-2022, the School Corporation paid a portion of the Assistant Superintendent of Schools salary from the School Lunch fund without supporting documentation to support the percentage paid. The Assistant Superintendent of Schools spent time on federal program and nonfederal program activities, but did not maintain documentation of time spent on each activity. The total paid to the Assistant Superintendent of Schools from the School Lunch fund without proper documentation was $29,753. The costs that were not properly documented were considered questioned costs. The lack of internal controls, availability of supporting documentation, 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 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (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: ". . . 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 200.439(b) states in part: "The following rules of allowability must apply to equipment and other capital expenditures: (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. . . ." 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. . . ." Cause Management had not established an effective system of internal controls that would have ensured compliance or that supporting documentation would have been maintained and made available for audit 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 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 $83,247 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 to 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 2022-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - 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): FY 20/21, FY 21/22 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 A sample of 40 vendor disbursements from the School Lunch fund was selected for testing to verify the transactions were for allowable activities and costs. There were 3 of the 40 transactions, totaling $4,129, that were paid to vendors for which the School Corporation could not provide documentation to support the costs. As such, the 3 transactions could not be verified as an allowable activity or cost of the food service program and were considered questioned costs. Due to the number and magnitude of exceptions, per auditor judgment, we concluded it would not be appropriate to examine the remaining 29 disbursements. Additionally, the School Corporation incurred costs in the amount of $49,365 paid from the School Lunch fund for a vehicle used to distribute meals to students at the Indiana Department of Education approved meal sites during the COVID-19 pandemic shutdown. The School Corporation could not provide supporting documentation that prior written approval was received from the pass-through entity. Finally, in fiscal year 2021-2022, the School Corporation paid a portion of the Assistant Superintendent of Schools salary from the School Lunch fund without supporting documentation to support the percentage paid. The Assistant Superintendent of Schools spent time on federal program and nonfederal program activities, but did not maintain documentation of time spent on each activity. The total paid to the Assistant Superintendent of Schools from the School Lunch fund without proper documentation was $29,753. The costs that were not properly documented were considered questioned costs. The lack of internal controls, availability of supporting documentation, 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 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (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: ". . . 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 200.439(b) states in part: "The following rules of allowability must apply to equipment and other capital expenditures: (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. . . ." 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. . . ." Cause Management had not established an effective system of internal controls that would have ensured compliance or that supporting documentation would have been maintained and made available for audit 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 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 $83,247 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 to 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 2022-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - 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): FY 20/21, FY 21/22 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 A sample of 40 vendor disbursements from the School Lunch fund was selected for testing to verify the transactions were for allowable activities and costs. There were 3 of the 40 transactions, totaling $4,129, that were paid to vendors for which the School Corporation could not provide documentation to support the costs. As such, the 3 transactions could not be verified as an allowable activity or cost of the food service program and were considered questioned costs. Due to the number and magnitude of exceptions, per auditor judgment, we concluded it would not be appropriate to examine the remaining 29 disbursements. Additionally, the School Corporation incurred costs in the amount of $49,365 paid from the School Lunch fund for a vehicle used to distribute meals to students at the Indiana Department of Education approved meal sites during the COVID-19 pandemic shutdown. The School Corporation could not provide supporting documentation that prior written approval was received from the pass-through entity. Finally, in fiscal year 2021-2022, the School Corporation paid a portion of the Assistant Superintendent of Schools salary from the School Lunch fund without supporting documentation to support the percentage paid. The Assistant Superintendent of Schools spent time on federal program and nonfederal program activities, but did not maintain documentation of time spent on each activity. The total paid to the Assistant Superintendent of Schools from the School Lunch fund without proper documentation was $29,753. The costs that were not properly documented were considered questioned costs. The lack of internal controls, availability of supporting documentation, 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 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (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: ". . . 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 200.439(b) states in part: "The following rules of allowability must apply to equipment and other capital expenditures: (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. . . ." 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. . . ." Cause Management had not established an effective system of internal controls that would have ensured compliance or that supporting documentation would have been maintained and made available for audit 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 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 $83,247 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 to 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 2022-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - 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): FY 20/21, FY 21/22 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 A sample of 40 vendor disbursements from the School Lunch fund was selected for testing to verify the transactions were for allowable activities and costs. There were 3 of the 40 transactions, totaling $4,129, that were paid to vendors for which the School Corporation could not provide documentation to support the costs. As such, the 3 transactions could not be verified as an allowable activity or cost of the food service program and were considered questioned costs. Due to the number and magnitude of exceptions, per auditor judgment, we concluded it would not be appropriate to examine the remaining 29 disbursements. Additionally, the School Corporation incurred costs in the amount of $49,365 paid from the School Lunch fund for a vehicle used to distribute meals to students at the Indiana Department of Education approved meal sites during the COVID-19 pandemic shutdown. The School Corporation could not provide supporting documentation that prior written approval was received from the pass-through entity. Finally, in fiscal year 2021-2022, the School Corporation paid a portion of the Assistant Superintendent of Schools salary from the School Lunch fund without supporting documentation to support the percentage paid. The Assistant Superintendent of Schools spent time on federal program and nonfederal program activities, but did not maintain documentation of time spent on each activity. The total paid to the Assistant Superintendent of Schools from the School Lunch fund without proper documentation was $29,753. The costs that were not properly documented were considered questioned costs. The lack of internal controls, availability of supporting documentation, 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 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (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: ". . . 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 200.439(b) states in part: "The following rules of allowability must apply to equipment and other capital expenditures: (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. . . ." 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. . . ." Cause Management had not established an effective system of internal controls that would have ensured compliance or that supporting documentation would have been maintained and made available for audit 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 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 $83,247 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 to 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 2022-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - 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): FY 20/21, FY 21/22 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 A sample of 40 vendor disbursements from the School Lunch fund was selected for testing to verify the transactions were for allowable activities and costs. There were 3 of the 40 transactions, totaling $4,129, that were paid to vendors for which the School Corporation could not provide documentation to support the costs. As such, the 3 transactions could not be verified as an allowable activity or cost of the food service program and were considered questioned costs. Due to the number and magnitude of exceptions, per auditor judgment, we concluded it would not be appropriate to examine the remaining 29 disbursements. Additionally, the School Corporation incurred costs in the amount of $49,365 paid from the School Lunch fund for a vehicle used to distribute meals to students at the Indiana Department of Education approved meal sites during the COVID-19 pandemic shutdown. The School Corporation could not provide supporting documentation that prior written approval was received from the pass-through entity. Finally, in fiscal year 2021-2022, the School Corporation paid a portion of the Assistant Superintendent of Schools salary from the School Lunch fund without supporting documentation to support the percentage paid. The Assistant Superintendent of Schools spent time on federal program and nonfederal program activities, but did not maintain documentation of time spent on each activity. The total paid to the Assistant Superintendent of Schools from the School Lunch fund without proper documentation was $29,753. The costs that were not properly documented were considered questioned costs. The lack of internal controls, availability of supporting documentation, 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 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (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: ". . . 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 200.439(b) states in part: "The following rules of allowability must apply to equipment and other capital expenditures: (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. . . ." 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. . . ." Cause Management had not established an effective system of internal controls that would have ensured compliance or that supporting documentation would have been maintained and made available for audit 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 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 $83,247 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 to 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.