Finding 1001 (2023-002)

-
Requirement
L
Questioned Costs
$1
Year
2023
Accepted
2023-10-31
Audit: 1901
Organization: School District, City of Flint (MI)

AI Summary

  • Core Issue: The District's ESSER I Final Expenditure Report exceeded the approved budget by more than 10%, leading to questioned costs of $345,536.
  • Impacted Requirements: MDE mandates that final expenditures align with detailed records and that any overages over 10% require an approved budget amendment.
  • Recommended Follow-Up: The business office should ensure all FERs are compared with final trial balances and approved budgets to avoid exceeding the 10% threshold before finalizing reports.

Finding Text

Condition and Criteria: The Michigan Department of Education (MDE) requires that Local Education Agency's (LEA’s) report their final expenditures upon completion of a grant, and that those records agree with the LEA's detailed records and that the allocation of costs within the report are appropriate. MDE further requires that any expenditures that are over an approved amount by more than 10% obtain an approved budget amendment. When the ESSER I Final Expenditure Report (FER) was filed, various amounts by function and object code exceeded the final approved budget by more than 10%. Effect: The District has questioned costs for the portions of their FER exceeding 10% of the approved budget. Cause: Some misclassifications were found throughout the audit testing which could imply that these excess costs are in fact included in the approved budget but simply misclassified. However, we are unable to verify that, and must consider these excess costs as unallowable. Context: The FER and all final trial balances for the fiscal years included in the grant were reviewed and evaluated in total. Only the ESSER I FER included overages over 10%. Questioned Costs: $345,536 Auditors' Recommendation: We recommend that the business office closely compare all FERs with not only their final trial balances, but also with their final approved budgets to ensure that all amounts agree and do not exceed more than 10% of the budget, prior to finalizing the FER in the NexSys System. Views of Responsible Officials and Planned Corrective Actions: The District understands the situation and will ensure this happens moving forward. Please see the attached Corrective Action Plan prepared by the District.

Corrective Action Plan

The newly contracted Accountant for Shared Business Services fully understands the requirements and rules related to the federal ESSER dollars and reporting requirements of the Final Expenditure Report and has already ensured that newly submitted FER’s under her direction do not exceed 10% of the approved budget. She will continue to monitor all grants and their required reporting moving forward.

Categories

Questioned Costs Allowable Costs / Cost Principles

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund $10.96M
84.010 Title I Grants to Local Educational Agencies $10.78M
84.367 Improving Teacher Quality State Grants $1.38M
84.027 Special Education_grants to States $1.32M
84.371 Striving Readers $829,293
10.553 School Breakfast Program $652,593
84.424 Student Support and Academic Enrichment Program $563,881
10.558 Child and Adult Care Food Program $309,782
84.173 Special Education_preschool Grants $142,454
10.582 Fresh Fruit and Vegetable Program $126,425
10.555 National School Lunch Program $93,675
21.019 Coronavirus Relief Fund $30,814
93.778 Medical Assistance Program $10,384
10.579 Child Nutrition Discretionary Grants Limited Availability $10,000
10.559 Summer Food Service Program for Children $5,689
84.365 English Language Acquisition State Grants $5,162
10.649 Pandemic Ebt Administrative Costs $3,135
84.377 School Improvement Grants $0