Finding Text
Finding #2024-005; Education Stabilization Fund – CFDA No. 84.425; Year Ended June 30, 2024
CONDITION:
Management failed to meet the Pennsylvania Department of Education (PDE) deadlines for submission of the quarterly reports (“Reconciliation of Cash on Hand”) for its grants, including the ECIA Title programs and the Education Stabilization (ESSER/ARP) funding during the 2023-24 fiscal year. In addition, as of June 30, 2024, several Final Expenditure Reports (FERs) also remain due.
CRITERIA:
According to PDE reporting instructions, a “Required Report” represents a required filing for projects that received payments in a previous quarter. The report must be filed no later than the 10th working day following the quarter just ended. A “Delinquent Report” represents a required report that has not been submitted by the 10th working day of the month. Consequently, delinquent reports are not available for importation by the Comptroller’s Office. As such, all scheduled payments to the respective project are suspended until the report is sent. Delinquent reports must be filed no later than the 10th working day of the following month. There are circumstances where the Final Expenditure Report will supersede the Quarterly Report.
CAUSE:
The cause of the non-filing is due to multiple issues. First, the addition of COVID-19 related funding added to the business manager’s workload. Second, due to the size of the District, the business manager not only performs duties associated with his own position, but also assists with other administrative duties. Third, there was a staff retirement in the business office, and the new employee hired in August 2023 has not yet been introduced to grant reporting. As mentioned in Finding #2024-002, the business manager is involved with nearly all transactions involving the business office. The business manager’s current workload, the additional COVID-19 funding, and the staff retirement caused other tasks to take priority over monitoring of grant expenditures and thus, led to the failure to file the required grant reports.
EFFECT:
The effect of the failure to file such reports caused the District to be out of compliance with PDE requirements. The noncompliance resulted in delayed funding from PDE under the ECIA Title and ESSER programs during the 2023-24 school year. PDE could further suspend funding on future grants, which would negatively impact the District’s cash flows.
QUESTIONED COSTS:
$0
PROPER PERSPECTIVE (SAMPLING):
Because there were no quarterly reports filed in 2023-24, 0% of the reports were sampled. The audit sample was statistically valid.
REPEAT FINDING:
Yes.
RECOMMENDATION:
We recommend that the entire management team (superintendent, business manager, building principals, maintenance supervisor, etc.) identify and prioritize the duties each performs and determine those that can be reassigned to support staff, as well as whether the appropriate administrator is actually responsible for the duties they are performing. The business manager’s duties, as much as possible, should be limited to those directly involving the business office. With all administrative positions filled, duties that had shifted to the business manager should be able to revert to the appropriate individual. In addition, with the new business office employee hired in August 2023, we recommend the District involve the new staff person to assist in bringing all PDE filings current so that suspended grant payments resume.
MANAGEMENT RESPONSE:
Management agrees with the recommendations. The unique situation with the COVID-19 funding, coupled with shifts in the business manager’s duties over the last few years and the staff retirement has resulted in grant report filings becoming a lower priority. The management team will work together and will resume management team meetings to determine and monitor the duties for which each is responsible. Strides have been made in this regard, as the principals have become involved in Federal program training, budgeting, and scheduling. Although the aforementioned report submissions are delinquent and funding was suspended, some filings have been completed, and certain payments are forthcoming. However, management will begin to gradually involve the new business office employee in grant reporting to improve on grant compliance with reporting requirements.