Material Weakness 2023-009 Unsupported Expenditures - Title I, Impact Aid and ESSER Grants Federal Program and Award: Title I, Impact Aid and ESSER Grants The objective of the Title I Grants (Assistance Listing 84.010A) is to provide financial assistance to local educational agencies (LEAs) to ensure that all children, particularly those from low-income families, have a fair, equitable, and high-quality education and the opportunity to meet challenging state academic standards. The objective of the COVID-19 ESSER Grants (Assistance Listing 84.425D) is to provide emergency relief funding to state educational agencies (SEAs) and LEAs to address the impact of the Coronavirus Disease 2019 (COVID-19) pandemic on the elementary and secondary schools. The objective of the Impact Aid Program (Assitance Listing 84.041 A) is to provide financial assistance to LEAs that experience a loss of local revenue due to the presence of tax-exempt federal property of the enrollment of federally connected students, ensuring such districts can maintain adequate educational services. CFDA Numbers: 84.010A, 84.425D, and 84.041A Pass-Through Entity: Only the Title I grant , Passed through the State of Wyoming Department of Education. Subrecipient Information: None Criteria The Uniform Guidance (2 CFR Part 200), as applicable to federal prgrams including Title I Grants (Assistance Listing 84.010A), COVID-19 ESSER Grants (Assistance Listing 84.425D), and Impact Aid (Assistance Listing 84.041A), requires that expenditures charged to federal awards be allowable, properly documented, and adequately supported. Costs must be necessary, reasonable, and allocable to the respective program, and records sufficient to support the nature and purpose of each expenditure must be maintained. Type of Compliance Requirement: Allowable Costs Direct or Indirect: Direct and Indirect Condition The District recorded payroll costs to federal programs, including Title I, ESSER, and Impact Aid, through journal entries; however, sufficient documentation was not maintained to support the allowability of these costs. Specifically, the District could not provide support identifying the employees compensated, their job responsibilities, or the services performed. In many cases, supporting documentation for the journal entries charged to the grants was not available, including the methodology, supporting documentation for indirect costs charged to the federal programs was not available, including the methodology used to calculate and allocate such costs. We also noted instances where invoices and supporting documentation for certain equipment purchases could not be located, limiting the District's ability to demonstrate that these costs were allowable and properly supported. Cause The District did not have personnel with the necessary skills, knowledge, and experience to properly maintain accounting records and comply with federal grant requirements. As a result, adequate procedures were not in place to ensure that grant expenditures, including payroll and indirect cots, were properly supported and documented. In addition, there was insufficient communication and coordination between District personnel and external resources, limiting the District's ability to maintain adequate records and support for grant activity. Effect During the current year audit, a significant portion of the items tested lacked adequate supporting documentation limiting our ability to verify that expenditures were allowable and properly supported. This deficiency continues to represent a breakdown in internal controls over financial reporting and compliance with federal grant requirements. The business manager in place during the 2022 audit year has since been replaced as of the end of 2024. Questioned Costs $848,464 of expenditures tested lacked adequate supporting documentation; therefore, the allowability of these costs could not be determined for the Title I Grants. $1,099,212 of expenditures tested lacked adequate supporting documentation; therefore, the allowability of these costs could not be determined for the ESSER Grants. $219,179 of expenditures tested lacked adequate supporting documentation; therefore, the allowability of these costs could not be determined for the Impact Aid Grants. Prior Year Finding: Yes, Education Stabilization Fund Expenditures. Recomendation The District should strengthen its internal control system over federal expenditures by implementing formal prcedures to ensure all costs are adequately documented, supported, and retained in accordance with Uniform Guidance requirements. The District should utilize a centralized electronic document management system to maintain records in an organized and accessible manner. Mangagement should ensure that documentation is consistently retained and reviewed to support the allowability, accuracy, and completeness of all grant-related expenditures.