Finding 1055851 (2022-001)

Finding 2022-001 – Education Stabilization Fund – AL No.’s 84.425D & 84.425U Department of Education Massachusetts Department of Elementary and Secondary Education Noncompliance and Significant Deficiency Related to Internal Control over Compliance of the Major Programs Criteria: Grantees must provide reasonable assurance that federal awards are expended only for allowable activities and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Management of the Town is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context: Control deficiencies related to disbursements were noted as a result of the testing of internal controls over payroll. Specifically, a sample of payroll disbursements charged to the Accelerated Literacy Learning Grant were tested in order to determine if adequate internal controls were in place. As a result of the testing of payroll disbursements charged to the programs, employees tested were found to not have adequately approved and or documented employee payroll rate agreements. Cause: The School Department failed to produce copies of documented appointment letters to support pay rates from the appropriate level of management. Effect or Potential Effect: Due to the weaknesses in internal controls noted above, there is a risk of inappropriate rate of pay and/or wages being paid. Identification as a Repeat Finding: N/A Questioned Costs: Questioned costs could not be determined. Recommendation: The Town should improve internal controls over Activities Allowed/Allowable Costs by ensuring employee’s payroll rate agreements are approved by an appropriate level of management and in a timely manner. Managements Response: School management will ensure that documented appointment letters from management will support payments.