Finding Text
2025-003. Allowable Costs/Cost Principles – (Ineligible Security Payroll Costs) COVID-19: American Rescue Plan - Elementary and Secondary School Emergency Relief ALN: 84.425U Pass-through Entity Number: 5882-21-1490 Criteria: Federal grant funds must be expended in accordance with the approved grant budget and applicable cost principles. Only costs that are properly budgeted, necessary, reasonable, and allowable to the grant may be charged to the program. Condition: Payroll expenditures charged to the ARP Summer Learning grant for employees performing security guard duties were incorrectly reported as salaries for professional staff. These positions were not included in the approved grant budget. Cause: An employee responsible for assigning payroll budget codes for employees whose salaries are charged to federal grant awards miscoded the security guards who performed security duties for the summer learning program, mistakenly thinking that they were reimbursable expenditures under the position expenditure object code 150 (instructional). Effect: As a result, $9,343 in grant expenditures were not in accordance with the approved budget and are considered unallowable costs under the ARP Summer Learning grant. The District may be required to return funds received. Questioned Cost: $9,343. Context: Total population of payroll transactions for Education Stabilization Fund grants was 418, we selected a sample of 15%, or sixty-three (63) payroll transactions. Of these, two (2) transactions were for employees performing security guard duties who were charged to the ARP Summer Learning grant as instructional employees. As a result of the exceptions, we expanded our scope and analyzed the payroll detail report for the ARP Summer Learning grant. This analysis identified a total of six (6) employees performing security guard functions who were incorrectly classified as teachers and charged to the ARP Summer Learning grant. These six (6) employees were associated with a total of fifteen (15) payroll transactions, amounting to $9,343. Identification of a Repeat Finding: This is not a repeat finding from the immediately prior audit. Recommendation: The District should strengthen its internal controls over payroll coding and grant expenditure review procedures to ensure that employee classifications accurately reflect actual job duties and are properly aligned with approved grant budgets. Specifically, the District should implement a secondary review process to verify that positions charged to federal awards are consistent with the approved budget prior to posting payroll. In addition, we recommend that the District review payroll coding across all Education Stabilization Fund programs to identify and correct any similar misclassifications. Finally, we recommend that the District reimburse NYSED for the $9,343 in unallowable costs charged to the ARP Summer Learning grant. Views of Responsible Officials of Auditee: The District concurs with the audit finding. The District acknowledges that certain employees performing security-related duties were incorrectly coded as instructional staff and charged to the ARP Summer Learning grant. The District agrees that these costs were not included in the approved grant budget and therefore are unallowable under the program. The District will implement corrective action to ensure proper classification of employees in the accounting system going forward. Additionally, the District will reimburse NYSED for the questioned costs totaling $9,343.