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.
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)). Further, Uniform Guidance Requirements, which also apply to expenditures of ESSER funds, dictate the funding recipient is required to follow document personnel costs in accordance with 2 CFR Section 200.430 (i). The District is required to maintain time distribution records for employees funded under Federal Programs.
Condition and Context: We tested a sample of fifteen (15) payroll transactions for ESSER and seven (7) payroll transactions for Title I-A. We were unable to verify the funding allocation for eleven (11) transactions for the ESSER funding and four (4) transactions for the Title I-A funding. The payroll expenditures charged to these programs were recorded using journal entries and lacked documentation of time and effort. The employee positions were not considered unallowable under the programs.
Cause: Lack of internal controls over payroll expenditure allocation.
Effect: The lack of supporting documentation indicating the payroll expenditure allocation allows for the potential of payroll expenditures to be incorrectly charge to unallowable funding sources.
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 reported.
Recommendation: We recommend that management ensures employee personnel action forms are updated to reflect the correct fund allocations for payroll costs to ensure employees time is appropriately coded. Additionally, if charged to federal grant sources that time and effort be adequately tracked and documented.
Management Response: Management agrees with this finding, see Corrective Action Plan.