Finding Text
2025-005 U.S. Department of Education, Assistance Listing #84.010, Title 1A Disadvantage for the period of July 1, 2024, through June 30, 2025 Criteria: In accordance with grant agreement terms and applicable federal and state regulations (e.g., Uniform Guidance 2 CFR Part 200), grant reimbursement requests must accurately reflect allowable costs incurred. Condition: The School incorrectly calculated allowable costs when preparing Title 1 grant reimbursement requests. The majority of the error was attributed to the 1/1/2023-3/31/2023 reimbursement request. The request was overstated, and the Maine Department of Education (MDOE) paid the full amount requested. The noncompliance was reported in the 2024 Single Audit, but was not rectified. A payable to MDOE for $123,810 has been recorded on the financial statements as of June 30, 2025. Cause: The above mentioned requests improperly excluded accounting credits when reporting grant expenditures. Most notably, an accounting credit for a MainePERS reimbursement of $95,077 was not netted against grant expenditures. Effect: Grant expenditures totaling $123,810 were over-reported and represent questioned costs that should be reimbursed to MDOE. Failure to comply with grant requirements may result in financial penalties, reputational risk, and potential restrictions on future funding. Questioned Costs: $123,810 Recommendation: Management should: • Reimburse MDOE for the questioned costs of $123,810. • Implement procedures to ensure all credits and adjustments are considered when preparing reimbursement requests. • Strengthen review controls over grant accounting to prevent similar errors in the future. • Provide staff training on proper grant accounting and compliance requirements.