Finding Text
Allowable Activities – Allocable Wages, Chart of Accounts, and Budget Monitoring Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance Questioned Cost Amount: $156,818 removed from Title I expenditures Context / Criteria: The School District should maintain internal controls to document wages that accurately reflect the work performed based on 2CFR200.430(i). The internal controls should provide reasonable assurance that the charges are accurate, allowable, and properly allocated as to account and period. Additionally, transactions need to be recorded based on the Michigan School Accounting Manual. The manual has the appropriate account classification with regard to account code dimensions (fund, function, and object code). Condition: The School District improperly charged salaries to the Title I grant. Noted there was one employee that was overcharged to the grant based upon the budget. Cause / Effect: Management has not developed or implemented a control to sufficiently accumulate and document the individuals charged to Title I resulting in inaccuracies in financial reporting and overcharging of the grant. Additionally, the School District did not have adequate controls in place to ensure transactions were being recorded to the proper accounts based on fund, function, and object code. The lack of consistency caused unnecessary variations between the accounting records and supporting documentation. Recommendation: We recommend management implement procedures to document the employees charged throughout the year to ensure they are following the budget, and the School District review the Michigan School Accounting Manual and follow the guidelines for recording transactions with appropriate account classifications. Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.