Finding Text
Federal Program Affected
Program Name: COVID‐19 ‐ Elementary and Secondary School Emergency Relief (ESSER III) Fund:
Learning Loss (Resource 3214), Expanded Learning Opportunities (ELO) Grant: ESSER II State Reserve
(Resource 3216), and Expanded Learning Opportunities (ELO) Grant: GEER II (Resource 3217)
Assistance Listing Number: 84.425U, 84.425D, 84.425C
Pass‐Through Entity: California Department of Education (CDE)
Federal Agency: U.S. Department of Education
Criteria
The United States Department of Education has approved a delegation agreement with the California
Department of Education (CDE) that authorizes the CDE to provide funding to LEAs pursuant to the
American Rescue Plan of 2021 (ARP Act) to address the learning loss requirement portion of ESSER III
funds. Indirect costs for the total ESSER III allocation (Resource 3213 and 3214 combined) should be
charged to Resource 3213 only. In addition, indirect cost for the Expanded Learning Opportunities,
ESSER II State Reserves program (Resource 3216) and the Expanded Learning Opportunities, GEER II
program (Resource 3217) is not allowable. Additional information is available on the on the CDE’s ARP
Act Funding web page at https://www.cde.ca.gov/fg/cr/arpact.asp#esseriiialloc.
Condition
During our audit, we found the District incorrectly charged $24,363 of indirect costs to Resource 3214.
The District’s total indirect costs, $42,097, for Resources 3213 and 3214 combined were under the LEA
approved rate of 4.96%. In addition, the District incorrectly charged $15,008 of indirect costs to
Resource 3216 and $3,440 of indirect costs to Resource 3217, which do not allow indirect costs for those
resources.
Questioned Costs
A total of $42,811 in questioned costs was identified as a result of the conditions identified above. As
the total indirect costs charged to resources 3213 and 3214 were under the District’s approved rate, the
likely questioned cost is deemed to be $18,448 for resources 3216 (Expanding Learning Opportunities
Grant (ESSER II) and Expanding Learning Opportunities Grant (GEER II). Context
The conditions were identified as a result of the auditor’s federal program testing of the District’s
indirect cost charges.
Effect
The District is out of compliance with allowable indirect cost charge requirements of the COVID‐19 ‐
Elementary and Secondary School Emergency Relief Fund programs.
Cause
The condition identified above appears to be due to the District not being familiar with the varying
indirect cost requirements for each of the ESF federal programs.
Recommendation
In the 2023‐2024 fiscal year, the District should transfer $24,363 from the District’s General Fund
Resource 3213 to the District’s General Fund Resource 3214, as well as, transferring $15,008 and $3,440
from the District’s General Fund unrestricted resource to Resources 3216 and 3217. In addition, the
District should review their procedures to ensure it is only charging indirect costs to those programs that
allow it.