Finding Text
Finding Number: 2023-003
Federal Agency: U.S. Department of Education
Cluster/Program: Supporting Effective Instruction State Grant
AL Number(s): 84.367A
Award Year: 2023
Compliance Requirement: Reporting
Type of Finding
Compliance
Internal Control over Compliance – Material Weakness
Criteria or Specific Requirement
The Supporting Effective Instruction State Grant requires that final financial reports include all expenditures incurred during the period of performance. These reports must be accurate, complete, and adhere to the financial reporting requirements as stipulated by the grant agreement and federal regulations. Additionally, financial reports should be prepared and reviewed by different individuals to ensure proper segregation of duties.
Condition and Context
Upon review of the final financial reports submitted for the program, it was noted that not all expenditures incurred were included. Additionally, the reports were completed and signed by the same individual, indicating a lack of proper internal controls concerning the segregation of duties.
Cause
The omission of certain expenditures from the final financial report appears to be the result of an oversight or misunderstanding of reporting requirements. The completion and signing of the report by the same individual may be due to a lack of adequate staffing or a misunderstanding of reporting requirements.
Effect or Potential Effect
The incomplete final financial reports do not accurately reflect the total expenditures associated with the program, potentially resulting in a misrepresentation of the use of federal funds. Furthermore, the lack of segregation of duties in the reporting process increases the risk of undetected errors.
Recommendation
The Town should review all expenditures to ensure that they are accurately captured and reported in the final financial reports for the program. Additionally, the Town should institute a policy requiring the final financial reports be prepared and reviewed by separate individuals.
Views of Responsible Official
Management agrees with the finding.
Planned Corrective Action
Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.