Finding Text
Finding Type: Material Weakness – Noncompliance – Educational Stabilization Fund Under the Coronavirus Aid, Relief, and Economic Security Act
Criteria
Michigan Department of Education awarded the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) program to public school academies operating before fiscal year 2022. Under the program, Academies cannot allow the transfer of ESSER funding to academies open after fiscal year 2021.
Condition
The Academy transferred ESSER funds based on the State of Michigan's approved consolidated application that identified Lincoln-King Adams-Young Academy as a second tier subrecipient. Subsequent to year-end, the State of Michigan deemed the transfer as unallowable incurred expenditures ineligible.
The Academy firmly disputes that the transfers were unallowable because of the pre-approvals received by the Academy to be a sub-recipient of a federal award but supports trying to resolve the relevant issues.
Questioned Cost
Questioned costs included amounts transferred to Lincoln-King Adams-Young Academy, which totaled $3,345,325 in Fiscal Year 23.
Context
Subsequent to year-end, we were made aware that the transfers were unallowable.
Cause and Effect
The Academy relied on the approved consolidated application noting the use of funds for Lincoln-King Adams-Young Academy.