Finding Text
Item 2023-003 – Activities Allowed or Unallowed/Allowable Costs/Cost Principles Education Stabilization Fund (ESF) ALN# 84.425 U.S. Department of Education Passed through the State Department of Education Grant period – Year ended September 30, 2023 (84.425U) (84.425D) Criteria – Grantees should have controls in place to ensure that grant monies are for allowable costs and allowable activities. 2 CFR 200.303 requires the non-Federal entity to “(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non_x0002_Federal entity is managing the Federal award in accordance with all applicable statutes, regulations, and the terms and conditions of the Federal award.” Condition – In testing a statistically valid sample of 37 items, 7 did not show prior approval. There is a systemic lack of controls in place to ensure that prior approval for allowable costs/activities was obtained prior to incurring the expenditure. Cause – Certain cost charged against the grant for allowable cost/activities did not contain approval from the Superintendent as required. There was a lack of sufficient controls over the review of expenditures to ensure that they received proper approval prior to payment. Effect – Lack of approval over expenditures could lead to disallowed costs. Questioned Costs – N/A Recommendation – We recommend the strengthening of controls to ensure that proper approval is received prior to the encumbrance of an expenditure. Management’s Response – The Board will strengthen the controls in place to provide assurance that proper approval is obtained from required personnel prior to the encumbrance of an expenditure.