Finding Text
2023-014 Inability to Test Compliance and Adequacy of Federal Grant Expenditures (Material Weakness)
Federal Agency: All
Compliance Requirement: All
Type of Finding:
Internal Control over Compliance – Material Weakness
Material Noncompliance
Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.302(b)(3)) requires recipients of federal funds to maintain records that adequately identify the source and application of funds and ensure compliance with program requirements.
Condition: We are unable to test compliance with federal program requirements due to pervasive discrepancies in the School District’s accounting for federal grants. Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) could not be supported or reconciled to the School District’s financial records.
Cause: Inadequate grant accounting procedures and internal controls over federal program expenditures.
Effect: We are unable to determine compliance with federal program requirements or assess the allowability of expenditures. A disclaimer of opinion was issued for compliance with major program requirements.
Questioned Costs: Unable to determine. We cannot quantify questioned costs because no testing could be performed, and the scope limitation affects all reported federal expenditures.
Identification as Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the School District implement procedures to ensure grant expenditures are properly accounted for and supported by sufficient documentation. The School District should develop internal controls to ensure accurate and complete reporting on the SEFA.
Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.