Finding Text
Federal Agency: U.S. Department of Education passed through the State of Alaska, Department of Education and Early Development (DEED)
Federal Program(s): COVID-19 CRRSA ACT: ESSER II / ARP ACT: ESSER III (ESSER)
and Title I-A
Assistance Listing Number(s):84.425 U and D and 84.010A
Award Number(s): Federal award numbers: S425U210020, S425D210020 (ESSER), S010A230002, and S010A230002 (Title I-A), Pass through entity award numbers: ER 24.YFSD.01 (ESSER), IP 24.YFSD.01, and SI 24.YFSD.01 (Title I-A).
Award Year(s): 2024
Type of Finding: Significant deficiency in internal control over compliance and noncompliance.
Criteria: Management is responsible for designing, implementing and maintaining internal controls relevant to ensuring that transactions charged to programs follow proper internal control processes (2 CFR Part 200 Subpart E §200.400 (d). This includes ensuring there is proper supporting documentation for transactions as well as methods to document approval of the cost/activity to determine whether it is allowable under the funding requirements.
Condition and Context: We tested a sample of fifteen (15) payroll transactions for ESSER and seven (7) payroll transactions for Title I-A. We noted four (4) instances where the transaction either lacked supporting documentation for payrate or hours worked for ESSER. We noted three (3) instances where the transaction lacked supporting documentation for payrate or hours worked for Title I-A. We also identified one (1) transaction charged to ESSER that appeared to be unallowable based on the context of the transaction.
Cause: Lack of internal controls related to approval and supporting documentation for transactions charged to the programs.
Effect: Lack of approval and adequate supporting documentation for transactions allows for an environment where unallowable costs could be charged to the programs.
Federal Schedule of Findings and Questioned Costs, Continued
Repeat Finding: This is not a repeat finding, however, due to the number of exceptions identified, we believe this to be a systemic issue.
Questioned Costs: None over the reporting threshold of $25,000.
Recommendation: We recommend that management implement stronger internal controls over payroll transactions and improve the review, approval and maintenance of supporting documentation processes.
Management Response: Management agrees with this finding, see Corrective Action Plan.