Finding Text
Statement of condition: Supporting documentation for expenditures paid from the Education Stabilization Fund did not contain evidence of appropriate review and approval performed. Additionally, supporting documentation was not maintained for all expenditures.
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) 200.302-303 requires non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Additionally, all recipients and subrecipients of federal awards must maintain sufficient records to track expenditures to establish that funds have been used in accordance with Federal statutes,
regulations, and the terms and conditions of the Federal award. Sound internal control procedures should include a documented review and approval process for expenditures to ensure that funds are used appropriately and in accordance with program requirements.
Cause of condition: Procedures are in place which require all federal program expenditures to be reviewed and approved by appropriate personnel and supported by appropriate documentation. However, due to turnover of key personnel, these procedures were not appropriately followed.
Effect of condition: Without proper review and approval of expenditures and maintenance of supporting documentation, there is an increased risk of noncompliance with federal regulations.
Context: A total of 20 non-payroll expenditures were selected for testing of the Education Stabilization Fund. Of these, 16 expenditures lacked evidence of review or approval. These expenditures total $1,017,291. Additionally, management was unable to provide adequate supporting documentation for 1 of the 20 non-payroll expenditures selected for testing totaling $200.Recommendation: To ensure that non-payroll expenditures charged to federal award programs are accurate, all expenditures should be reviewed and approved by the appropriate School personnel. Documentation of this review and approval should be maintained. Furthermore, expenditures paid
with federal funds should be reviewed and approved by personnel with the appropriate training necessary to identify allowable expenditures. We also recommend that the Federal Program Director position is filled by an individual that has training and knowledge of the federal program they are administrating.
Views of responsible officials and planned corrective actions: Management agrees with this finding and will put procedures in place for the review and approval of expenditures and maintenance of supporting documentation surrounding federal awards.