Finding Text
Program Name: Literacy Excellence Accelerates Performance – 84.215G Awarding Agency: U.S. Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: Our testing identified known questioned costs of $103,970. We extrapolated the error rate to the total population, based on our sample, which calculates extrapolated questioned costs of $103,970. Context / Criteria: The School District should maintain internal controls to document disbursements and salaries and wages that accurately reflect the expenditures incurred and work performed based on Uniform Guidance. The internal controls should provide reasonable assurance that the charges are accurate, allowable, and properly allocated as to account and period. Condition: The School District’s documentation for disbursements indicated the use of incorrect account and object codes, as well as a lack of supporting documentation for certain transactions. Specifically, 4 out of the 40 disbursements tested were charged to the general ledger as disbursements instead of payroll transactions, and support could not be provided for 4 out of the 40 disbursements tested. Cause / Effect: The School District is not appropriately labeling expenditures for posting and/or not appropriately reviewing expenditures compared to budget to prevent and identify errors. Additionally, the School District is not reviewing expenditures to supporting documentation to prevent and identify errors. The lack of review for charges being posted to these accounts could result in the School District over or under-charging certain function or object codes compare to approved budgets. Recommendation: We recommend management implement procedures to ensure all expenditures are being allocated to the correct program, account and object code. A comparison of actual expenditures to budget may help identify and prevent misstatements to account for function, program and object codes. Views of Responsible Officials and Corrective Actions: Management is in agreement with the finding. See accompanying corrective action plan.