Finding 1079690 (2024-002)

Federal program Education Stabilization Fund – 84.425 Compliance requirements Activities Allowed and Unallowed and Allowable Costs and Cost Principles Criteria or specific requirement Internal controls should be in place to ensure that costs are correctly charged as to account, amount, and period, and to ensure that costs are adequately documented and supported. Condition During inquiry of District personnel and review of program documents, we identified that certain amounts booked with journal entries to the program expenditure account either could not be fully substantiated with supporting documentation or were booked to an incorrect period. Context Two program transactions were found to have exceptions. Regarding the first transaction, for each payroll period, a manual calculation of the afterschool tutoring hours was performed to identify the wages and taxes that needed to be moved to the program expenditure account. For one month, an additional three hours were listed that could not be matched to a specific employee or to any other supporting documentation. This resulted in an additional $101 being charged to the program. Regarding the second transaction, it was determined that hours worked for summer school in July of 2024 were booked with a journal entry to the program expenditure account in fiscal year 2024. However, since the underlying activity occurred in fiscal year 2025, the original expense transaction was not accrued and recorded within the accounting records until fiscal year 2025. This resulted in $1,987 being expensed to the program in fiscal year 2024 that should not have been recognized until year 2025. Cause Human error occurred during the process of manually creating journal entries to book expenditures to the program. Effect Expenditures were incorrectly charged to the program for the period under audit. Recommendation We recommend that the District carefully review supporting documentation when preparing journal entries associated with federal programs. Views of responsible officials See Corrective Action Plan.