Finding Text
Criteria or specific requirement :Per Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200) Subpart D, Post Federal Award Requirements Section 200.303, Internal controls, the recipient must establish, document and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award. The requirements for activities allowed or unallowed are contained in program legislation, federal awarding agency regulations, and the terms and conditions of the award. Condition: The District incurred program expenditures that were not charged in accordance with the approved grant budget. Cause: The District's internal controls over compliance were not functioning effectively to ensure program expenditures were compliant with the activities allowed or unallowed compliance requirement. Effect: The District was not in compliance with the activities allowed or unallowed compliance requirement. Questioned Costs:The following questioned costs were computed based on exceptions identified in the activities allowed or unallowed compliance testing performed: $10,016 (Project No. 25-4300-00) Context: From the population of non-payroll expenditures totaling $1,230,248, a sample of forty (40) transactions totaling $123,816 were selected for testing, from which two (2) transactions totaling $10,016 were considered exceptions. A statistically valid sample was not utilized. Recommendation: We recommend that the District strengthen controls over expenditure coding and grant claiming processes by ensuring invoices are reviewed against the approved budget detail prior to claiming. This should include management review and periodic reconciliation of claimed expenditures to the grant budget. Management's response: The District agrees with the auditor's finding and recommendation.