Finding 1136344 (2024-002)

SIGNIFICANT DEFICIENCY 2024-002 ALLOWABLE COSTS Federal Agency: Department of Education Federal Program or Cluster: Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers and Years 70907: 06/24/2022 - 9/30/2024 Questioned Costs $0 Condition: An allocated payroll expense was improperly calculated and charged to the grant due to an error in a manual spreadsheet used to allocate payroll costs to the grant. A separate unallowed cost was charged to the grant to the grant as well. In that case, out of a sample of 7 expenditures, 1 expenditure tested was unallowed by the grant requirements. Criteria: The Organization is required to maintain a system of internal controls that ensures only costs incurred for federal grant activities are charged to the federal grant. Cause: The individual responsible for reviewing the grant activity and resulting reimbursements failed to detect that the payroll expense was calculated improperly and that the other expense was not an allowable cost. Effect: The Organization used federal funds for unallowable costs which could result in recapture by the federal agency. Recommendation: Management should improve the system of review over payroll costs and other costs charged to the grant to ensure reimbursements are only requested for allowable costs. Personnel should be trained as needed. Identification of repeat findings: This finding is not a repeat finding. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and plans to develop an updated accounting and procedures manual that includes written policies and procedures related to all applicable compliance areas under Uniform Guidance which included allowable costs. Relevant staff will be trained on the updated policies and each cost assigned to a federal grant will be reviewed by the grants manager or leadership staff.