Finding Text
2023-001 Improve Controls and Documentation Over Payroll Process Federal Agency: U.S. Department of Agriculture Cluster/Program: Child Nutrition Cluster Award Name: National School Lunch Program AL Number(s): 10.553/10.555/10.559/10.582 Award Year: 2023 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Award Name: Title I Grants to Local Educational Agencies AL Number(s): 84.010 Award Year: 2021, 2022, 2023 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Cluster/Program: Special Education Cluster Award Name: Special Education Grants to States and Preschool Grants AL Number(s): 84.027/84.173 Award Year: 2021, 2022, 2023 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Award Name: COVID-19 – Education Stabilization Fund AL Number(s): 84.425 Award Year: 2021, 2022, 2023 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding Compliance Internal Control over Compliance – Material Weakness Criteria or Specific Requirement The Code of Federal Regulations Section 200.403(g) states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. Condition and Context In fiscal year 2023, our sample testing disclosed that amounts paid to employees could not be recalculated and documentation to ensure amounts paid were complete and accurate was not available. Cause Weaknesses in the design and implementation of internal controls. Effect or Potential Effect We were unable to conclude on the allowability, validity, or completeness of payroll charged to the grants, and as a result there is a risk that amounts charged to federal awards may not be allowable in accordance with applicable cost principles. Questioned Costs Due to the condition noted, we were unable to determine if the costs charged to the applicable grants are allowable. AL Number(s) Name of Federal Program or Cluster Questioned Costs 10.553/10.555/10.559/10.582 Child Nutrition Cluster $3,423,470 84.010 Title I Grants to Local Educational Agencies $4,687,955 84.027/84.173 Special Education Cluster $4,946,791 84.425 COVID-19 – Education Stabilization Fund $7,567,860 Recommendation The City should redesign and enhance the internal controls surrounding how payroll is processed to provide assurance that processing is complete, accurate and valid and that suitable, appropriate documentation is maintained. Views of Responsible Official and Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.