Finding 366540 (2023-002)

Criteria: Per the Office of Management and Budget Compliance Supplement and the Cost Principles for State, Local, and Indian Tribal Governments, claims for reimbursements must be for actual costs incurred. Condition: Tests of expenditures during the year revealed that an invoice in the amount of $320,310 addressed to Roanoke City Public Schools was erroneously paid by Rockbridge County School Board. $228,816 of the invoice was submitted to Virginia Department of Education for reimbursement under the State and Local Fiscal Recovery Fund program. Cause: The School Board's internal control procedures failed to prevent the processing of payment for the invoice that was not owed by the School Board Effect: Federal revenues and expenditures of federal awards exceeded the allowable amount by $228,816. Questioned Costs: $228,816 was requested for reimbursement for expenditures that were not actually owed by the School Board. Recommendation: We recommend that policies and procedures be adequate to ensure approval for payment of invoices includes verifying the School Board is the actual payee listed on the invoice. Views of Responsible Officials and Planned Corrective Actions: The school board acknowledges the incorrect payment of the invoice. The school board invoice payment process has a two-step verification process. The first step is for the end user to acknowledge receipt and payment approval for invoice. The end user is to verify accuracy of the invoice and receipt of goods or services. The second step is for the Accounts Payable employee to verify the accuracy of the invoice and approval for payment. The school board will review these processes with staff and the importance of this process.