Finding 1235968 (2025-002)

Finding 2025-002 – Special Education Cluster – AL No. 84.027 Department of Education Massachusetts Department of Elementary and Secondary Education Noncompliance and Material Weakness Related to Internal Control over Compliance of the Major Program Criteria: Grantees must provide reasonable assurance that federal awards are expended only for allowable activities and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Management of the School is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition: Control deficiencies related to disbursements were noted as a result of the testing of internal controls over expenses. Specifically, a sample of journal entries charged to the major program were tested in order to determine if adequate internal controls were in place. As a result of the testing the journal entries charged to the program, it was noted that expenses where outside the period of performance. Cause: The grant’s effective date was later than it has been historically. The payroll office should have coded the employees’ salaries to the budget, rather than the grant for that first pay period. Context: During our review of journal entries posted to the major program it was noted that a journal entry posted to the FY 2025 Special Education Grants to States grant included an expense that was outside the period of performance as it was for expenses as of 8/28/24 and that grant start date was 9/9/24. The FY 2023 Special Education Grants to States grant included an expense that was outside the period of performance as it was for an expense whose service period was 1/1/25 – 12/31/25 and grant end date was 9/30/24. Effect or Potential Effect: Due to the noncompliance and material weakness in internal controls noted above, there is a risk of unallowable expenditures being charged to the federal grant. Identification as a Repeat Finding: 2024-004 Questioned Costs: Total questioned costs for the expenses charged to the grant that were outside the period of performance was for FY 2025 Special Education Grants to States was $2,499.10 and FY 2023 Special Education Grants to States was $3,612.98. Recommendation: The Assabet Valley Regional Technical High School should improve the internal controls over Allowable Costs by ensuring employee’s payroll charged to the federal grant is within the period of performance and supported with Time and Effort certifications. Responsible for Corrective Plan: Director of Business Operations Estimated Completion Date: Business Office staff have started changing codes for affected accounts. Action Taken: Proper coding procedures were reviewed with Payroll and Business Office staff. They have been instructed to not charge any salaries to a grant until after the start date.