Finding Text
Internal controls over activities allowed or unallowed and allowable cost and cost principles compliance requirements to be reviewed
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.425, Department of Education, Education Stabilization Fund and 84.367, Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants)
Federal Award Identification Number and Year: 213713 & 240520
Pass-through Entity: Michigan Department of Education
Finding Type: Material weakness in internal control over compliance
Repeat Finding: No
Criteria: Per 2 CFR § 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition: During our testing for activities allowed or unallowed, allowable costs/cost principles, it was noted that 6 out of 6 payroll related disbursements selected for testing did not have evidence of review and approval.
Cause: Management did not fully implement their internal control policies and procedures as there was no evidence of review and approvals, nor was documentation retained.
Effect: Payroll related reports did not have evidence of review and approval.
Recommendation: We recommend that management review its procedures and controls in place to ensure that reports and supporting documentation are retained and have proper evidence of review and approval.
View of responsible officials and planned corrective action plan:
Management agrees with the finding. See corrective action plan.