Finding 369061 (2023-003)

Material Weakness
Requirement
B
Questioned Costs
-
Year
2023
Accepted
2024-02-14

AI Summary

  • Core Issue: There are weaknesses in internal controls for reviewing and approving allowable costs charged to the ESSER funds.
  • Impacted Requirements: Ongoing monitoring of costs in line with grant guidelines and the spend plan is not being effectively implemented.
  • Recommended Follow-Up: HR should confirm and document that payroll and other expenses align with the approved spend plan at the start of the year.

Finding Text

Federal Program: ESSER FUND II of the CRRSA ACT and ESSER FUND III of the American Rescue Plan Act of 2021 Compliance Requirement: Allowable Cost Criteria: Ongoing monitoring of the general ledger, and activity in the federal program to ensure that the costs charged to the program are allowable according to the grant guidelines and the grant spend plan. Condition: We noted a deficiency in internal control procedures related to documentation of administrative review and approval of the allowable costs that were charged to the program, including employees' payroll. Cause: The cause of the deficiency appears to be a lack of regular administrative review procedures and a lack of communication between the program directors, payroll administrator, and the Chief Financial Officer. Effect: The lack of internal controls could result in a questioned cost. Recommendation: It is recommended that when setting up the payroll at the beginning of the year, HR needs to verify and document that the employees charged to the program agree with what was decided in the spend plan and that there were no changes. Also, verify any other expenditures charged to the program agree to the spend plan

Corrective Action Plan

White Oak ISD has been in a period of transition since the Spring of 2023. A new Superintendent was hired in April 2023. Operational areas were assessed, and corrective actions were and continue to be taken to address weak and critical need areas, including the Business Office. The current CFO, at that time, left in May of 2023 and was replaced with a Business Manager in June of 2023. The Business Manager began assessing specific deficiencies within the department. New procedural manuals were adopted in August of 2023. The business manager left in December of 2023 due to personal reasons and a new CFO was hired. A new payroll coordinator was also onboarded during December 2023. Between the new staff members and the new Superintendent all systems have been turned over and are trying to get back to an effective and efficient level of function. The new plan of action is to allow the CFO to set goals and make necessary changes regarding business operations and procedures. The audit findings will be our guide for making corrective actions. The CFO and Superintendent will continue to update processes, written procedures, and establish appropriate internal controls to ensure appropriate oversight and compliance with laws, rules, and regulations. Business Office staff will continue working to adequately segregate duties and establish additional monthly and annual reconciliation processes with oversight by the CFO, program directors, andSuperintendent as appropriate. Responsible Party: Carrie Howard, CFO Estimated Completion Date: August 31, 2024

Categories

Subrecipient Monitoring Allowable Costs / Cost Principles Internal Control / Segregation of Duties

Other Findings in this Audit

  • 369060 2023-002
    Material Weakness
  • 369062 2023-003
    Material Weakness
  • 945502 2023-002
    Material Weakness
  • 945503 2023-003
    Material Weakness
  • 945504 2023-003
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund $682,934
16.710 Public Safety Partnership and Community Policing Grants $500,000
84.010 Title I Grants to Local Educational Agencies $297,148
10.553 School Breakfast Program $91,408
10.565 Commodity Supplemental Food Program $58,551
10.555 National School Lunch Program $56,994
84.367 Improving Teacher Quality State Grants $38,152
84.027 Special Education_grants to States $33,128
84.048 Career and Technical Education -- Basic Grants to States $18,962
45.310 Grants to States $8,979
84.173 Special Education_preschool Grants $6,382
84.424 Student Support and Academic Enrichment Program $1,277