Finding Text
Finding 2022-002: Special Education Cluster (IDEA), CFDA 84.027 and 84.173 U.S. Department of Education Passed through the Colorado Department of Education Compliance Requirements: Reporting Grant No.: 4027, 6027, 4173, and 6173 Type of finding: Internal Control (material weakness) and noncompliance (material noncompliance) Criteria: A system of internal control includes the design, documentation, and monitoring of control activities over the application of accounting principles, anti-fraud programs, non-routine transactions, financial statement preparation, safeguarding of assets, and compliance with laws and regulations. Condition: The San Luis Valley Board of Cooperative Education Services (SLV BOCES) financial close and reporting was not performed timely or accurately for the fiscal year ended June 30, 2022. Accounting records were initially presented for audit on February 28, 2023. At that time, year-end accruals were not accurately recorded for revenues and expenditures. Cause: The SLV BOCES internal controls over the financial close and reporting process, specifically grant reconciliations were not completed timely due to turnover in key management positions. In addition, the general ledger chart of accounts for grants is cumbersome as it includes a separate account structure for each fiscal year. This creates additional burden and complexity for grant accounting throughout the year and grant reconciliation at year-end. Effect: As a result of this condition, the following areas were effected: 1.Audit adjustments were proposed to accurately reconcile grant activity to the general ledger accounting records. 2.Audit procedures identified $36,000 of unspent Improving Education Stability for Foster Youth grant funds that are required to be returned to the Colorado Department of Education. 3.The June 30, 2022 audit report was not submitted to the Colorado Office of the State Auditor by the extended deadline of March 1, 2023 in accordance with Local Government Audit Law. (Section 29-1-601, et seq., C.R.S.) 4.The June 30, 2022 single audit reporting package and data collection form was not submitted to the Federal Audit Clearinghouse within nine months after the end of the audit period in accordance with Uniform Guidance (CFR 200.512(a)) Recommendation: The SLV BOCES should evaluate the duties and responsibilities for financial close and reporting and adopt policies and procedures that include segregation of duties to ensure financial close and reporting is performed timely and accurately. In addition, we recommend management consider the consolidation of the chart of accounts by grant to reduce the accounting and reconciliation burden. Management?s Response: See corrective action plan.