FAC Explorer

Finding 366724 (2023-005)

Significant Deficiency
Requirement
B
Questioned Costs
$1
Year
2023
Accepted
2024-02-09
Audit: 289732
Organization: New Mexico Early Childhood Education and Care Department (NM)
Auditor: Cliftonlarsonallen LLP

AI Summary

  • Core Issue: There was a significant deficiency in internal controls regarding allowable costs for space maintenance under the IDEA Part C grant.
  • Impacted Requirements: Costs must be pre-approved by the US Education Department as specified in the grant application to comply with federal regulations.
  • Recommended Follow-Up: Review the compliance supplement and grant applications to ensure all necessary federal approvals are obtained before incurring costs.

Finding Text

2023 – 005 Allowable Costs Federal Agency: US Department of Education Federal Program Name: Special Education - Grants for Infants and Families Assistance Listing Number: 84.181A Federal Award Identification Number and Year: H181X210125-21A & H181A210125 Award Period: 7/1/21-09/30/22 & 7/1/22-09/30/23 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: Part 4 of the Federal Compliance Supplement and the IDEA Application says, "A state may charge rent, occupancy, or space maintenance costs as a direct cost to its IDEA Part C grant award, only if it indicates so in the Section IV.B.2, "Restricted Indirect Cost Rate/Cost Allocation Plan Information," of its IDEA Part C grant application and receives approval from the US Education Department in its grant award letter (34 CFR section 303.225(c) (3)). Condition: During our testing of 34 vouchers, 14 were for costs related to space maintenance. Questioned costs: $2,666.72 Context: We tested 34 vouchers, of which 14 contained exceptions Cause: Management oversight with regard to requiring explicit approval from the US Education Department in advance Effect: Noncompliance with allowable costs Repeat Finding: No Recommendation: We recommend the program review the compliance supplement and grant applications thoroughly to notate instances when federal approval is required in advance. Views of responsible officials: There is no disagreement with the audit finding.

Corrective Action Plan

2023-005 Allowable Costs U.S. Department of Education Special Education - Grants for Infants and Families Assistance Listing Numbers: 84.181A Recommendation: We recommend the program review the compliance supplement and grant applications thoroughly to notate instances when federal approval is required in advance. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: ECECD recognizes that ECECD did not fully comply with the IDEA part C grant award related to charging rent, occupancy, or space maintenance costs as direct costs prior to receiving approval from the US Education Department in the grant award letter. To correct this compliance oversight, ECECD has substituted funds from General Fund to cover the amount charged to the ECECDFIT2301 to replace the funds that ECECD inappropriately spends on rent, occupancy, and space maintenance. Additionally, ECECD will not charge these costs to this grant prior to receiving written approval in our grant award letter from the US Education Department. Additionally, the Chief Financial Officer (CFO) review, amend and enhance our process to ensure strict compliance with all grant requirements including those in the compliance supplement of 34 CFR Section 303.225(c)(3). Name(s) of the contact person(s) responsible for corrective action: Carmel Pacheco-Aragon, Chief Financial Officer; ECECD FIT Program Manager. Planned completion date for corrective action plan: June 30, 2024

Categories

Questioned Costs Allowable Costs / Cost Principles Internal Control / Segregation of Duties Significant Deficiency

Other Findings in this Audit

  • 366723 2023-004
    Significant Deficiency
  • 366725 2023-002
    Material Weakness Repeat
  • 366726 2023-003
    Significant Deficiency Repeat
  • 943165 2023-004
    Significant Deficiency
  • 943166 2023-005
    Significant Deficiency
  • 943167 2023-002
    Material Weakness Repeat
  • 943168 2023-003
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
93.575 Child Care and Development Block Grant $41.64M
10.558 Child and Adult Care Food Program $36.79M
93.596 Child Care Mandatory and Matching Funds of the Child Care and Development Fund $31.53M
93.558 Temporary Assistance for Needy Families $18.77M
84.181A Special Education-Grants for Infants and Families $3.24M
84.425C Education Stabilization Fund $1.83M
10.560 State Administrative Expenses for Child Nutrition $1.32M
93.778 Medical Assistance Program $924,624
84.181X Family, Infant and Toddler with Disabilities-American Rescue Plan $773,661
93.434 Every Student Succeeds Act/preschool Development Grants $599,502
93.870 Maternal, Infant and Early Childhood Home Visiting Grant $379,559
93.110 Maternal and Child Health Federal Consolidated Programs $229,841
93.600 Head Start $105,189
10.559 Summer Food Service Program for Children $54,405