Finding Text
Finding No. 2023-008 Federal Agency: U.S. Department of Education AL Program: COVID-19 84.027 Special Education Cluster - Grants to States (IDEA, Part B) Federal Award No.: H027A220106, H027A230106, H027X210106 Area: Matching, Level of Effort, and Earmarking Questioned Costs: $345,823 Criteria: In accordance with IDEA §612(a)(18) as part of the IDEA Part B Application, states may meet the maintenance of State financial support (MFS), on either a total or per capita basis. Additionally, 34 CFR §300.163(a) says a State must not reduce the amount of State financial support for special education and related services for children with disabilities or otherwise made available because of the excess costs of educating those children, below the amount of support for the preceding fiscal year. Condition: 1. Based on the comparison of State expenditures recorded under Business Unit (BU) 111133 against the amount indicated on the Part B Application for MFS, we noted that PSS failed to maintain the required level of State financial support for special education and related services in FY2023. In addition, PSS included open encumbrances as part of its calculation for maintenance of effort. However, PSS was unable to substantiate these encumbrances or provide adequate documentation to support the inclusion of these encumbrances. As a result, questioned costs were determined based on the actual expenditures incurred in FY2023. 2. Per our walkthrough procedures over internal control, evidence of review and approval by the Director of Finance over the local expenditures recorded under business unit 111133 was not provided. Cause: PSS failed to adhere to the maintenance of effort requirements under IDEA §612(a)(18), 34 CFR §300.163 and applicable grant award requirements. Additionally, PSS lacks proper monitoring, review and approval controls over State expenditures recorded under business unit 111133 to ensure compliance with maintenance of effort requirements. Effect or potential effect: PSS is in noncompliance with applicable maintenance of effort regulations and questioned costs of $345,823 result. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: 1. PSS should ensure compliance with maintenance of effort requirements in accordance with applicable federal regulations and grant award terms. 2. PSS should establish and implement policies and procedures for monitoring, reviewing and reconciling State expenditures to accurately compare prior year and current year levels of State financial support for special education and related services. Views of Auditee and Corrective Action Plan: PSS concurs with the finding. Refer to PSS’ Corrective Action Plan for additional information.