Finding 370542 (2023-002)

Federal Program COVID-19 - Education Stabilization Fund ALN 84.425; passed through the Pennsylvania Department of Education Criteria The grant agreements under the Education Stabilization Fund programs outline costs that are allowable for the program. Recipients of funds are required to establish internal controls over allowable activities and allowable costs to ensure only allowable expenditures are being charged to the grant. Condition/Cause We tested a sample of 8 nonpayroll invoices charged to the Education Stabilization Fund. For 1 out of the 8 invoices tested, the invoice was miscoded to the grant and should have been charged to a different program. Controls at the District did not catch this miscoding prior to the audit. The Board of Directors approves all salaried positions that are funded by the Education Stabilization Fund. For one of the individuals charged to the program, the Board did not approve their position as a grant funded position. Instead, a different individual was approved but not charged to the grant. Controls at the District did not catch this miscoding prior to the audit; however, the individual charged to the grant was in a position that was allowable under the grant requirements. Effect Grant funds were utilized to fund expenditures not intended to be funded with Education Stabilization Fund monies. Questioned Costs Less than $25,000. Context There were 7 salaried positions funded with Education Stabilization Fund grants during the year. Our audit procedures did not utilize sampling and all 7 positions were tested. The 1 individual who was coded to the grant but was not approved by the Board of Directors to be funded with Education Stabilization Fund grants had recently transferred positions. The individual who was approved to be funded with Education Stabilization Fund grants but was not charged to the program had the same salary as the individual who was charged to the program but not approved. Because of this, there are no questioned costs, but internal controls did not operate as designed to ensure only individuals approved by the Board of Directors were charged to the program. The invoice erroneously charged to the Education Stabilization Fund due to a coding error totaled $2,613. This was 6.16% of total costs tested as part of our sample. Repeat Finding No. Recommendation We recommend the District review their internal controls over allowable activities and allowable costs charged to the Education Stabilization Fund to ensure they are designed and operating to detect coding errors that may result in noncompliance with grant requirements. Management Response See corrective action plan included in this report package.