Finding 1055776 (2023-001)

U. S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I GRANTS TO LOCAL EDUCATION AGENCIES - AL NUMBER 84.010A AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 PASS-THROUGH NUMBER 0404 2023-001 Allowable Costs/Cost 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. Condition: During our test of payroll expenditures, we identified $9,624 in salary expenditures paid from the Title I program for a Non-Title I certified teaching position. During the school year, the employee was reassigned from a Title I paraprofessional position to a Non-Title I position, and the District continued to pay the employee from the Title I program. Also, a contract was not prepared for the employee's position. Cause: Lack of internal controls and management oversight over program expenditures. Effect: Unallowable costs of $9,624 (gross salary) and $3,607 (fringe benefits) were paid from the Title I program. Questioned costs: The amount of questioned cost was $13,231. Context: An examination of Title I expenditures for 1 employee ($25,698) from a population of 10 employees ($361,978). Our sample was statistically valid. Identification as a repeat finding: No Recommendation: The District should contact the Arkansas Department of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The District has instituted an internal control that requires the preparation, review and retention of documentation as evidence that coding changes have not only been made but also made in a timely manner. The District will ensure that a contract is executed for every full-time employee included in the human resources module in eFinance by reconciling employee and contract counts.