Finding 1123455 (2024-001)

MATERIAL WEAKNESS U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 - EDUCATION STABILIZATION FUND - AL NUMBERS 84.425D AND 84.425U PASS-THROUGH NUMBER 5404 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 2024-001. Allowable Costs/Cost Principles Criteria or specific requirement: Office of Management and Budget (OMB) 2 CFR part 200, subpart E – Cost Principles, establishes principles and standards for determining allowable costs incurred by the District under federal awards. Such costs are to be necessary and reasonable for the performance of the federal award and adequately documented. Condition: During our examination of Education Stabilization Fund payroll expenditures, we noted internal control deficiencies that resulted in the District paying $17,876 of unallowable salary payments and overpaying one employee $58. Cause: Lack of internal controls and management oversight over program expenditures. Effect or potential effect: Unallowable costs of $17,934 were paid from COVID-19 Education Stabilization Fund. Questioned costs: The amount of questioned costs was $17,934. Context: An examination of Education Stabilization Fund payroll expenditures for 6 employees totaling $29,467 from a population of 53 employees totaling $152,728. Identification as a repeat finding: No Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for resolution regarding this matter and implement proper controls over program payroll expenditures. Views of responsible officials: The district will check and code employees accurately by fund and/or redistributions, time certifications, etc. will be done according to procedure and requirements.