Finding 1081304 (2023-006)

Compliance Activities Allowed or Unallowed and Allowable Costs / Cost Principles Requirement Material Weakness Material Noncompliance 2023-006. The County should establish controls to ensure fifty percent of National Forest Distribution Title I funds are settled to the schools. CFDA Number 10.665 Federal Award Schools and Roads - Grants to States Pass-through Mississippi State Treasurer’s Office Questioned Costs None Repeat Finding Yes Criteria During the fiscal year, the County received $575,361 in National Forest Distribution Title I funds, a portion of the Secure Rural Schools Act State payments, which are to be used to benefit public schools and public roads in counties where national forests are located. Upon receipt of these funds, fifty percent of the total received should be settled to the County’s public school. Condition The County failed to settle the required fifty percent of the National Forest Distribution Title I funds received to the County’s public schools. The County received a total of thirteen (13) National Forest Distribution Title I payments during the fiscal year. However, during our audit test procedures, we noted that six (6) of these payments were not settled properly to the County’s schools. Cause The County lacked the necessary controls to ensure fifty percent of the total received from the Secure Rural Schools Act state payments was settled to the County’s public school. Effect The County’s lack of adequate controls resulted in an overstatement of County revenues in the amount of $12,700. Recommendation The Perry County Board of Supervisors should take the necessary steps to ensure that fifty percent of the total National Forest Distribution Title I funds are properly settled to the County’s public school.