Finding Text
SCHEDULE OF FEDERAL AWARD FINDINGS AND
QUESTIONED COSTS
Kent School District No. 415
September 1, 2021 through August 31, 2022
2022-001 The District did not have adequate internal controls for ensuring
compliance with requirements for time-and-effort documentation.
Assistance Listing Number and Title: 84.425, COVID-19 – Education
Stabilization Fund
Federal Grantor Name: U.S. Department of Education
Federal Award/Contract Number: N/A
Pass-through Entity Name: Office of Superintendent of Public
Instruction (OSPI)
Pass-through Award/Contract
Number:
COVID-19 – 84.425W; 459549
COVID-19 – 84.425U; 140614
COVID-19 – 84.425D; 120550
COVID-19 – 84.425U; 138100
COVID-19 – 84.425D; 130197
COVID-19 – 84.425U
COVID-19 – 84.425U; 712212
Known Questioned Cost Amount: $0
Prior Year Audit Finding: Yes, Finding 2021-001
Background
The objectives of the Education Stabilization Fund (ESF) are to prevent, prepare
for, and respond to the COVID-19 pandemic. In fiscal year 2022, the District spent
$30,615,680 of its ESF awards. This included $24,366,285 in the Elementary and
Secondary School Emergency Relief (ESSER II) Fund subprogram (84.425D),
$6,215,569 in the American Rescue Plan – Elementary And Secondary School
Emergency Relief (ARP ESSER/ESSER III) Fund subprogram (84.425U), and
$33,826 in the American Rescue Plan – Elementary and Secondary School
Emergency Relief – Homeless Children and Youth (ARP ESSER/HCY II)
subprogram (84.425W).
Federal regulations require award recipients to establish and follow internal
controls that ensure compliance with program requirements. These controls include
understanding program requirements and monitoring the effectiveness of
established controls.
The District is responsible for ensuring it supports all payroll costs charged to the
program with adequate time-and-effort documentation, as federal regulations and
the awarding agency require. Depending on the number and types of activities
employees perform, time-and-effort documentation can be a semiannual
certification or monthly personnel activity reports, such as a detailed timesheet.
Time-and-effort documentation must also be signed and dated after the work is
completed.
Description of Condition
The ESF program allowed the District to claim ESSER II funds for continuing to
employ existing District staff, as well as for other activities that were necessary for
maintaining the operation and continuity of public school services during the
COVID-19 pandemic.
Our audit found the District’s internal controls were ineffective for ensuring it
supported all salaries and benefits charged to the ESF program with appropriate
time-and-effort documentation, as the awarding agency requires. The District could
not provide time-and-effort documentation for 126 food service workers paid with
funds through both ESF and another federal program.
We consider this internal control deficiency to be a significant deficiency.
Cause of Condition
District officials did not know about the requirement to obtain time-and-effort
documentation for staff paid with funds through ESF and another federal program.
Effect of Condition
The District did not obtain time-and-effort documentation for 126 employees
whose payroll and benefits costs totaling $2,768,175 were charged to the ESF
program.
Without adequate time-and-effort documentation, the District cannot demonstrate
compliance with the granting agency’s documentation requirements to support
costs charged to federal programs. Further, the District cannot assure federal
grantors that payroll costs charged to the program were accurate and valid.
During the audit, the District supported these payroll costs by providing alternative
documentation to show the employees worked on the programs, so we are not
questioning these costs.
Recommendation
We recommend the District design and follow internal controls to ensure employees
complete time-and-effort documentation to support payroll costs charged to federal
programs.
District’s Response
The district acknowledges that it did not provide individual employee signatures as
part of a time & effort (T&E) demonstration for employees in the Child Nutrition
Program partially charged to ESSER. The district’s misunderstanding of this
requirement is due in part to the diverging guidance provided from OSPI and the
US Department of Education (USDOE); USDOE has notified us in writing that they
do not require T&E for ESSER 2 & 3 expenditures fitting this description. It is
unusual for state and federal guidance to diverge in this way for a federal program,
but the district acknowledges the OSPI requirement and has prepared a corrective
action plan accordingly. The compliance issue sited is solely one of documentation,
rather than the actual allowability of the costs.
Auditor’s Remarks
We appreciate the District’s commitment to resolving the issue. We will review the
condition during our next audit.
Applicable Laws and Regulations
Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards
(Uniform Guidance), section 516, Audit findings, establishes reporting
requirements for audit findings.
Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes
the requirements for auditees to maintain internal controls over federal programs
and comply with federal program requirements.
The American Institute of Certified Public Accountants defines significant
deficiencies and material weaknesses in its Codification of Statements on Auditing
Standards, section 935, Compliance Audits, paragraph 11.
Office of Superintendent of Public Instruction Addendum to Bulletin 048-17
established requirements for documenting time and effort.