Finding Text
Retain Supporting Documentation for Journal Entries (Material Weakness, Compliance Finding) Federal Agency: Department of Agriculture/Department of Education Cluster/Program: Child Nutrition Cluster/Education Stabilization Fund Assistance Listing Number(s): 10.553/10.555/10.559/84.425D Award Year: 2024 Compliance Requirement: Allowable Costs/Cost Principles Criteria Per 2 CFR 200.302 (Financial Management) and 2 CFR 200.403 (Factors Affecting Allowability of Costs) of the Uniform Guidance, recipients of federal awards must maintain records that identify adequately the source and application of funds. All accounting records, including journal entries affecting federal programs, must be supported by sufficient documentation to ensure costs are allowable, allocable, and properly authorized. Condition During our audit of federal grant programs, we identified several journal entries affecting federal grant expenditures that lacked adequate supporting documentation. Specifically, these entries did not include invoices, detailed calculations, approval signatures, or written explanations substantiating the nature and purpose of the transactions. Cause The District does not have a formalized policy or consistent procedure requiring that all journal entries be accompanied by adequate supporting documentation and maintained for audit and review purposes. Effect Without adequate supporting documentation, there is an increased risk that unallowable, inaccurate, or unauthorized costs could be charged to federal programs. This deficiency also impedes the ability to demonstrate compliance with federal requirements. Context Supporting documentation for journal entries was not maintained in fiscal year 2024. This was a recurring issue throughout the year. This issue was not present in previous fiscal years. Questioned Costs As a result of this finding, we have identified $54,856 in Child Nutrition Cluster federal expenditures and $523,315 in Education Stabilization Fund federal grant expenditures as questioned costs. These costs represent journal entries for which sufficient supporting documentation was not provided to substantiate allowability and compliance with federal requirements. Recommendation To rectify this material weakness, we recommend the District implement and enforce policies requiring that all journal entries be accompanied by appropriate supporting documentation and reviewed and approved by supervisory personnel prior to posting. View of Responsible Officials and Planned Corrective Actions The District’s corrective action plan is included at the end of this report.