Finding 1061922 (2023-020)

2023-020 ALLOWABLE COSTS AND COST PRINCIPLES - SPECIAL EDUCATION CLUSTER Grant Title: Special Education Cluster (IDEA): Special Education Grants to States, Special Education Preschool Grants Federal Award Number and Year: 2023 Assistance Listing #: 84.027A, 84.027, 84.027X, 84.173X, 84.173 Federal Agency: US Department of Education Pass-through Entity number: 43330, 43132, 43210, 43280, 43290 Pass-through Agency: WV Department of Education CONDITION: The Monroe County Board of Education (the “Board”) did not comply with the allowable costs/cost principle for the Special Education Cluster. Three charges to the Special Education Cluster were duplicate payments and seven charges to the Special Education Cluster did not match supporting documentation. CONTEXT: 51 non-payroll expenditures were sampled from a population of 100 for the Special Education Cluster, of which: ● Three expenditures, or 6% of the sample size, were duplicate charges to the grant. CRITERIA: In accordance with 2 CFR Part 200, Subpart E—Cost Principles, federal grant funds must be used in accordance with the specific terms and conditions of the grant, including ensuring that all costs charged to the grant are allowable, reasonable, and adequately supported. The Uniform Guidance requires that expenditures must be necessary and reasonable for the performance of the federal award and must be allocable thereto. QUESTIONED COSTS: None. Actual and likely questioned costs are below $25,000 and program materiality. CAUSE: The noncompliance resulted from inadequate internal controls over the review and approval of expenditures charged to the Special Education Cluster programs. Specifically, there was a failure to detect and prevent duplicate payments and to ensure that all expenditures were supported by adequate documentation before approval and payment. EFFECT: Although the actual and likely costs are below $25,000 and do not exceed program materiality, the identified items could result in the potential disallowance of Federal funds. Additionally, failure to maintain adequate documentation for program expenditures could jeopardize the Board's ability to receive future federal funding and may lead to repayment of questioned costs to the federal government. REPEAT FINDING: No RECOMMENDATION: We recommend that the Board strengthen its internal controls over the expenditure review and approval process to ensure that all charges to the Special Education Cluster programs are adequately supported and in compliance with the allowable cost/cost principles requirements under the Uniform Guidance. This includes implementing procedures to prevent duplicate payments and ensuring that all expenditures have the required supporting documentation. VIEWS OF RESPONSIBLE OFFICIALS: The Board concurs with the finding. The Board acknowledges the importance of adhering to the allowable cost/cost principles requirements and recognizes the need to strengthen its internal controls over federal program expenditures.