Finding 1057615 (2021-002)

FINDING 2021-002 – Lack of Written Policies for Federal Grants (Repeated from Prior Year Findings 20-003, 19-004, 18-003 and 17-002) Federal Program: Individuals with Disabilities Education Act (IDEA) Improvement Grant - Part D Project No: 20-4631-RN and 21-4631-RN Federal Assistance Listing Number: 84.323A Passed Through: Illinois State Board of Education Federal Agency: U.S. Department of Education Criteria/Specific Requirement: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), contained in 2 CFR Part 200, became effective for all federal award programs administered by the Regional Office of Education #47 that were issued on or after December 26, 2014. Specifically, the Uniform Guidance (2 CFR 200.302(b)(7)) requires the Regional Office to have written procedures related to cash management and for determining the allowability of costs in accordance with Subpart E – Cost Principles of the Uniform Guidance and the terms and conditions of the federal award. Condition: As of April 2021, Regional Office developed, but did not implement written procedures concerning cash management, the determination of allowability of costs in accordance with Subpart E – Cost Principles of the Uniform Guidance and the terms and conditions of the federal award. For the period of July 2020 through March 2021 the Regional Office utilized informal procedures in which each purchase made or cost allocated to the IDEA – Improvement Grant - Part D was reviewed for allowability by an individual with knowledge of the budget, allowable costs and activities, and the cash management requirements. The allowability determinations were based on the amounts included in the budgets for the IDEA – Improvement Grant - Part D approved by, and the grant periods set by, the Illinois State Board of Education. Questioned Costs: None Context: The Regional Office of Education #47 expended $1,919,044 of federal awards in total during fiscal year 2021, including $978,533 for the IDEA –Improvement Grant - Part D. Effect: Not having written procedures for the full period under review concerning cash management and cost principles increases the risk that grant payments will not be requested on the reimbursement basis and unallowable costs will be allocated to federal award programs. Cause: Regional Office management indicated they developed the written procedures late into the fiscal year, and were unable to fully implement the Uniform Guidance during the full fiscal year. Recommendation: We recommend the Regional Office implement written procedures to comply with the requirements related to cash management for determining the allowability of costs in accordance with Subpart E –Cost Principles of the Uniform Guidance and the terms and conditions of the federal award. Management’s Response: Effective April 2021, the Regional Office has developed written policies and procedures related to the Uniform Guidance.