Finding 1159894 (2024-002)

MW-2024-002 Improve Controls Over Period of Performance Over Federal Awards Federal Program(s) Information Federal Agency: U.S. Department of Education Cluster/Program: Special Education Cluster AL Number(s): 84.027/84.173 Award Year: 2022 Compliance Requirement: Period of Performance Type of Finding Material Noncompliance Internal Control over Compliance – Material Weakness Criteria or Specific Requirement A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). Management of the School Department is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of per¬forming their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context There were invoices for costs incurred after the end of the School Department’s fiscal year 2022 ARP SPED IDEA/Preschool grant. Since these costs occurred outside the authorized period of performance, they are not eligible to be charged to the grant. Cause The School Department has not established adequate procedures to ensure costs charged to the grant are within the authorized period of performance. Effect or Potential Effect Due to the weakness in internal control noted above, there are known and questioned costs reported for expenditures incurred outside the period of performance and charged to the grant. Questioned Costs Questioned costs related to these invoices outside of the period of performance were approximately $60,000. Recommendation The School Department should implement controls to ensure that no costs are charged to a grant outside the authorized period of performance. Views of Responsible Officials Management’s corrective action plan is included at the end of this report after the schedule of prior year findings.