Finding Text
Finding Number: 2024‐001 Repeat Finding: Yes – 2023‐001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Title I Grants to Local Educational Agencies 84.010 S010A230003 $0 Education Stabilization Fund 84.425C S425D200038 $0 Education Stabilization Fund 84.425D S425D200038 $0 Education Stabilization Fund 84.425D S425D210038 $0 Education Stabilization Fund 84.425U S425U210038 $2,477 Education Stabilization Fund 84.425W S425W210003 $0 Federal Agency: U.S. Department of Education Pass‐Through Agency: Arizona Department of Education Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Criteria In accordance with 2 CFR Part 200.303, the District is responsible for establishing and maintaining effective internal control over the Federal award that provides reasonable assurance that the non‐ Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition The District did not maintain effective internal control over activities allowed or unallowed and allowable costs/cost principles for several grants. Cause The District’s grant budgets were not approved until well after the beginning of each grant’s period of performance. Additionally, the District did not verify actual spending was within approved budgets, and, therefore, did not submit for budget revisions or manage available resources in a timely or effective manner. Effect The District was not in compliance with 2 CFR Part 200.303.Context Journal entries reviewed for the Title I Grants to Local Educational Agencies program and the American Rescue Plan ‐ Elementary and Secondary School Emergency Relief (ARP ESSER) grant within the Education Stabilization Fund were to correct consistent, pervasive, and material grant overexpenditures. In particular, for ARP ESSER, the District posted 533 adjusting journal entries totaling in excess of $25.0 million during fiscal year 2023‐24 moving expenditures to and from the grant, and at times, not identifying specific underlying transactions during such movement. The volume and dollar value of the entries indicate a severe internal control deficiency this late in the lifecycle of the ARP ESSER grant. There was no consistent plan, budget, or management of the ARP ESSER monies. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should provide training for those with grants management responsibilities. In particular, the District should provide training on the relationship between the District’s accounting records and the State’s grants management enterprise to ensure grant budgets are not overexpended going forward. The District should also have more consistent and timely oversight of grants by higher level management. Views of Responsible Officials See Corrective Action Plan.