Finding 1055775 (2023-002)

U. S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS OF EDUCATION COVID-19 - ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425D PASS-THROUGH NUMBER 0404 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-002 Allowable Costs/Costs Principles Criteria or specific requirement: Office of Management and Budget (OMB) 2 CFR part 200, subpart E - Cost Principles establishes principles for determining the allowable costs incurred by the District under federal funds. Such costs are to be necessary and reasonable for the performance of the federal award. Conditions: In our test of disbursements, we identified unallowable costs totaling $4,458 for football kicking lessons ($2,250) and student t-shirts to be worn at sporting events ($2,208) were paid from Education Stabilization Fund. Cause: Lack of internal controls and management oversight over program expenditures. Effect or potential effect: Unallowable costs of $4,458 were paid from the COVID-19 - Education Stabilization Fund. Questioned costs: The amount of questioned cost was $4,458. Context: A test of 6 nonpayroll disbursements from a population of 48. Our sample was statistically valid. Identification as a repeat finding: No Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The District notes that these expenditures were coded using ESSER program code 166. The District will contact DESE for guidance with respect to these expenditures.