Finding 1061926 (2023-021)

2023-021 ACTIVITIES ALLOWED/UNALLOWED - 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 #: 84.425U Federal Agency: US Department of Education Pass-through Entity number: 52160 Pass-through Agency: WV Department of Education CONDITION: The Monroe County Board of Education (the “Board”) did not comply with the activities allowed/unallowed requirement. We noted a charge to the ESSER grant that is an unallowed activity. CONTEXT: 51 non-payroll expenditures were sampled from a population of 134 for the ESSER grant, of which: ● One expenditure, or 2% of the sample size, were for admission to a “Minions” movie totaling $585.00. CRITERIA: Per the 2023 Compliance Supplement and the Uniform Guidance (2 CFR Part 200), all expenditures charged to the ESSER program must be necessary, reasonable, and allocable to the program's purpose. Costs such as entertainment, including admission to movies, are generally unallowable unless they meet specific educational purposes aligned with the program’s objectives. QUESTIONED COSTS: None. Actual and likely questioned costs are below $25,000 and program materiality. CAUSE: The noncompliance occurred due to a lack of understanding or misinterpretation of the ESSER program's allowable activities. The Board may have believed the expenditure aligned with the program's objectives of supporting students, but it did not meet the strict requirements set forth by federal regulations. EFFECT: Although the actual and likely costs are below $25,000 and do not exceed program materiality, the identified items increases the risk of unallowable activities being charged to federal programs. This finding could result in the need to return federal funds, negatively impacting the Board's financial resources and its ability to effectively manage the ESSER program. REPEAT FINDING: No RECOMMENDATION: We recommend that the Board enhance its review and approval process for expenditures charged to the ESSER program. This should include additional training for staff involved in the approval of such expenditures, ensuring that all charges are necessary, reasonable, and directly related to the program’s objectives. The Board should also review and potentially seek reimbursement of the questioned costs identified in this finding. VIEWS OF RESPONSIBLE OFFICIALS: The Board acknowledges the finding and agrees that the expenditure in question was not in compliance with the ESSER program's allowable activites.