Finding Text
Finding 2025-002: (Significant Deficiency) AL#84.048: Career and Technical Education Basis Grants to States, U.S. Department of Education, Award No. V048A240016, Passed through the Kansas State Board of Education Condition: During testing of allowable expenditures and period of performance we identified five transactions totaling $3,485 that were charged to the grant before the period of performance start date. Criteria or Specific Requirement: According to 2 CFR 200.308 and 200.309, a Non-Federal entity may charge a Federal award only allowable costs incurred during the approved period of performance, unless the Federal awarding agency authorizes pre-award costs or other exceptions. Questioned Costs: $3,485 is known questioned costs. One transaction was related to stipend reimbursements, through additional review of stipend payment service dates as noted in the payroll system, 3 other stipend payments totaling $1,988 are likely questioned costs. Context: One transaction was identified during allowable expenditure testing. A $675 stipend for June 2024 services provided was charged to the grant award with a period of performance start date of July 1, 2024. We tested a total of 60 items in the allowable expenditure testing. Four transactions were identified during period of performance testing. A $90 travel reimbursement for the last week of June 2024 was charged to the grant award with a period of performance start date of July 1, 2024. We tested a total of 10 travel reimbursements. The other three transactions were incurred prior to July 1, 2024 totaled $2,720 related to a Reallocation Grant Award of $11,766 with a period of performance of July 1, 2024 through June 30, 2025. The total period of performance sample was 55 items. The sample sizes were determined based upon guidelines provided by the AICPA which is not a statistically valid sample. Cause: This program had turnover in the current year and with year-end system cut-off dates, these items were incorrectly charged to the wrong grant year. Effect: Costs incurred outside the period of performance may be unallowable, which could result in questioned costs and potential repayment to the Federal awarding agency. Recommendation: We recommend when there is staff turnover that training is provided related to the period of performance and how to identify which grant year is appropriate for each expenditure. Additionally, a secondary review should be completed to ensure transactions are properly charged to the correct grant year. Views of Responsible Officials (Unaudited): The District acknowledges the finding. The Budget Department will implement a training process for all internal budget analysts as well as Career and Technical Education (CTE) program managers and business office staff on the requirements of 2 CFR 200.308 and 200.309, focusing on the “Period of Performance” and allowable cost principles. Additionally, the Budget Department will establish both a quarterly and year-end reconciliation process where the CTE assigned budget analyst will compare all expenditures against the authorized period of performance dates listed in the Perkins V Local Grant Handbook and specific grant award terms.