Finding Text
U.S. DEPARTMENT OF EDUCATION
PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION
COVID-19 - ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425D
PASS-THROUGH NUMBER 5106
AUDIT PERIOD - YEAR ENDED JUNE 30, 2023
2023-002.Allowable Costs/Cost Principles
Criteria or specific requirement: Purchases of equipment and other capital expenditures require the prior written approval of the Federal awarding agency or pass-through entity, as specified in Office of Management and Budget (OMB) 2 CFR section 200.439.
Condition: During our examination of expenditures, we identified four capital expenditures totaling $34,957 paid from the COVID-19 Education Stabilization Fund in which the District did not obtain prior written approval from the Arkansas Division of Elementary and Secondary Education (DESE). These capital expenditures included gymnasium windows ($20,259) and consultation for projects in which the District did not proceed with, including restroom renovations ($8,378) and an agricultural barn ($6,320).
Cause: Lack of internal controls and management oversight over program expenditures.
Effect or potential effect: Questioned costs of $34,957 were paid from COVID-19-Education Stabilization Fund.
Questioned costs: Total questioned costs of $34,957
Context: All capital expenditures were examined totaling $97,536.
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 will contact the Division of Elementary and Secondary Education (DESE) for guidance regarding this matter. The District will follow the guidance from DESE to ensure compliance with federal regulations and commissioners memos to ensure the District follows allowable costs and principles. Further, the partnership DMJ now has with the Arkansas Public School Resource Center (APSRC) will help establish proper internal controls and management over program expenditures.