Finding Text
Finding 2022-003. Allowed and Unallowed Costs. (ALN 84.425D ESSER II) CRITERIA: 2 CFR 200.302 requires that a non-federal entity?s financial management systems must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions. This section further requires the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statutes, regulations, and the terms and conditions of the federal award, including a comparison of expenditures with budget amounts for each federal award. 2 CFR 200.303 requires that a non-federal entity must establish and maintain effective internal control over a federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statues, regulations, and the terms and conditions of the federal award. CONDITION: We noted seven (7) line items in the ESSER II grant where actual expenditures exceeded budget expenditures by a total of $27,046.22. The ESSER II grant budgeting software was aligned with the approved budget; however, unfavorable spending variances were not addressed by grant oversight personnel. CAUSE: The school district failed to address unfavorable budgetary variances when actual expenditures exceeded approved budget amounts. EFFECT: The effect is both a breakdown in budgetary controls and unallowable program costs. QUESTIONED COSTS: $27,046.22 RECOMMENDATION: The district should limit expenditures to approved budgeted amounts for this grant. VIEWS OF RESPONSIBLE OFFICIALS: See the school district?s response in the auditee?s corrective action plan in this report.