Finding Text
Finding Number: 2024-004 Internal control weakness over activities allowed/allowable costs Federal Program: 84.027 & 84.173 Special Education Cluster (IDEA) Federal Program: 84.425D/84.425U Education Stabilization Fund Criteria: 2 CFR §200.302(b)(7) requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing the federal award in compliance with Federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR §200.403 requires that costs charged to a federal award be allowable, reasonable, and allocable to the federal program. 2 CFR §§200.302(b)(3) and 200.302(b)(4) require financial management systems to maintain records that adequately identify the source and application of funds for federally funded activities and support the allowability of costs charged to federal programs. Condition: The District did not maintain adequate internal controls to ensure that expenditures charged to Education Stabilization Fund grants were for activities allowed and allowable under Uniform Guidance. Specifically, the District lacked documented procedures and control activities to review and approve expenditures for allowability prior to charging costs to the federal program. Cause: The deficiencies resulted from the absence of formally documented procedures and internal control activities addressing the review and approval of expenditures for allowability under Uniform Guidance. As a result, management did not establish controls to ensure that costs charged to Education Stabilization Fund grants were evaluated for allowability in accordance with federal requirements. Effect: This condition increases the risk that unallowable or improperly supported costs could be charged to Education Stabilization Fund grants and not be identified or corrected in a timely manner, resulting in noncompliance with Uniform Guidance requirements. Identification of Questioned Costs: None identified. Context: The absence of documented internal control procedures over activities allowed and allowable costs limited the District’s ability to readily demonstrate compliance with Uniform Guidance. Repeat Finding: This is a repeat finding of 2023-04. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the entity.