Finding 1186737 (2025-001)

Criteria or Specific Requirement: Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: School system management is required to submit monthly reimbursement requests to the Virginia State Department of Education, which relies on these reports as the basis for reimbursing the school system for reported expenditures. For three of the monthly reimbursement requests selected for testing, the school system was unable to provide documentation demonstrating that an individual independent of the preparer reviewed and approved the reimbursement reports prior to submission. As a result, there was no evidence of adequate segregation of duties between the preparation of the reimbursement requests and their review and approval. Questioned Costs: There are no questioned costs related to this finding as the reimbursement request was properly supported by underlying documentation of the associated expenditures. Cause: The school system did not have sufficient policies and procedures over internal controls to maintain evidence of review and approval of the reimbursement reports. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Effect: The lack of a formal review and approval process could result in inaccurate amounts reported and reimbursed for the Federal programs. Repeat Finding: No Recommendation: We recommend that the school system implement procedures to ensure that documentation evidencing the separate preparation and approval of monthly reimbursement requests is retained for audit purposes. Views of Responsible Officials: There is no disagreement with the finding.