Finding 1061907 (2023-008)

Compliance and Significant Deficiency in Internal Control over compliance with Activities Allowed or Unallowed, Allowable Cost/Cost Principles U.S. Department of Education Passed through NYS Department of Education Program Name: Education Stabilization Fund AL#: 84.425U Condition: Payroll Costs for one employee were charged to the UPK grant in excess of the employee’s wages for the year. Criteria: 2CFR Section 200.430 requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must also (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. Context: Our review of the payroll in the UPK grant found that one employee had payroll recorded to the grant that exceed their full payroll for the year. The employee was docked pay that was incorrectly charged to the General Fund creating a negative earning in the general Fund. Questioned Costs are $736. Cause: The employee was docked pay that was incorrectly charged to the General Fund creating a negative earning in the General Fund and an overstatement in the UPK Grant. Questioned Costs are $736. Effect: The District is not in compliance with the requirements of the Education Stabilization Fund program with respect to Activities Allowed or Unallowed and Allowable Costs. Recommendation: We recommend that the District’s written procedures addressing internal controls with respect to program requirements be followed to ensure the District is in compliance at all times. View of Responsible Officials: Highland Falls-Fort Montgomery Central School District’s management concurs with this finding. The District is in the process of implementing procedures to ensure that compliance is maintained in the future. Please refer to the corrective action plan on pages 12 – 13.