Finding Text
2024-010 – EDUCATION STABILIZATION FUND - LACK OF SUPPORT OVER ESSER FUNDS – ALN 84.425 - MATERIAL WEAKNESS & MATERIAL NONCOMPLIANCE FINDING TYPE: MATERIAL WEAKNESS & MATERIAL NONCOMPLIANCE Finding 2024-010 Federal Program: Education Stabilization Fund ALN: 84.425 Federal Award Number(s) and Year(s): S425U210007, 2024 Federal Agency: U.S. Department of Education Pass Through Agency: North Dakota Department of Public Instruction Questioned Cost: $171,408 Condition Williston Basin Public School District No. 7 was unable to provide supporting documentation for expenses charged to the Education Stabilization Fund. 13 of the 60 we sampled did not have any support, leaving them with known questioned costs of $171,408. Effect By not having the correct supporting documentation, the School District may be subject to an increased risk of error, fraudulent financial reporting, asset misappropriation, and corruption. Cause Williston Basin Public School District No. 7 does not have sufficient procedures in place to ensure that support documentation for federal grants is maintained. Criteria Uniform Guidance 2 CFR 200.403(g) requires costs to be adequately documented. "Standards for Internal Control in the Federal Government" (Green Book) requires management to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. Management is to design appropriate types of control activities for the entity's internal control system. Control activities help management fulfill responsibilities and address identified risk responses in the internal control system. Uniform Guidance 2 CFR 200.303(a) states “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Context Williston Basin Public School District No. 7 had total Education Stabilization Fund expenditures of $1,613,557 in fiscal year 2024. Projected questioned costs identified during testing totaled $257,784. Repeat Finding Yes. See finding 2023-013. Recommendation We recommend that Williston Basin Public School District No. 7 establishes proper internal controls and policies to ensure they are maintaining proper support documentation for all federal grants. Williston Basin Public School District No. 7’s Response See Corrective Action Plan.