Finding 1061925 (2023-019)

2023-019 ALLOWABLE COSTS AND COST PRINCIPLES - ESSER Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2023 Assistance Listing #: 84.425D and 84.425U Federal Agency: US Department of Education Pass-through Entity number: 52110 and 52160 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 related to the ESSER grant. Several expenditures to the ESSER had supporting documentation which did not agree to the costs charged to the grant. CONTEXT: 51 non-payroll expenditures were sampled from a population of 134 for ESSER, of which: Three expenditures, or 6% of the sample size, did not agree with the charges recorded to the grant. CRITERIA: According to Title 2 CFR Part 200.403(g), Uniform Guidance, for costs to be allowable under federal awards, they must be adequately documented, and must align with the purposes of the grant. The Board is required to maintain accurate and complete records to support that expenditures are reasonable, necessary, and allocable to the grant. QUESTIONED COSTS: None. Actual and likely questioned costs are below $25,000 and program materiality. CAUSE: The noncompliance occurred due to insufficient review processes and oversight of expenditures charged to the grant. The Board’s current internal controls were not effective in ensuring that all costs met the allowable costs/cost principles criteria. EFFECT: Although the actual and likely costs are below $25,000 and do not exceed program materiality, charging costs to the program that do not agree with supporting documentation may result in the disallowance of the questioned costs by the federal grantor agency. This could lead to financial liabilities for the Board and potentially jeopardize future federal funding. REPEAT FINDING: No RECOMMENDATION: We recommend that the Board strengthen its internal controls over the review and approval of expenditures charged to federal grants. This should include ensuring that all expenditures are adequately documented and that they align with the purposes of the grant. Training should be provided to relevant staff on the requirements of Title 2 CFR Part 200.403 to prevent future occurrences of this finding. VIEWS OF RESPONSIBLE OFFICIALS: The Board acknowledges the finding and agrees with the recommendation and is committed to improving its internal controls to ensure compliance with federal regulations.