Finding 380752 (2023-001)

2023‐001 50000 Federal Program Affected Program Name: Education Stabilization Funds Assistance Listing Number: 84.425 Pass‐Through Entity Number: 15559, 10155 Pass‐Through Entity: California Department of Education (CDE) Federal Agency: U.S. Department of Treasury Compliance Requirement: Reporting Type of Finding: Material Weakness in Controls over Compliance Criteria or Specific Requirements Local education agencies must comply with all reporting requirements that the Department of Education may reasonably require. Section 15011 of Division B of the Coronavirus Aid, Relief, and Economic Security (CARES) Act requires that a grantee submit annual reports. In addition, the Uniform Guidance, Section 200.303 Internal Controls, requires that the non‐Federal entity must establish and maintain documentation of effective internal controls over Federal awards that provide reasonable assurance that awards are being managed in compliance with Federal statutes, regulations and the terms and conditions of the Federal award. Condition During our testing over reporting of the Education Stabilization Fund awards, we noted that the County did complete the required annual reports on time. However, the County reported the accumulation of the previous quarterly reports rather than the final end of year accumulation. This did not agree with the most up to date general ledger reports that supported the prior year ending Schedule of Expenditures of Federal Awards (SEFA) amounts, which should have been the proper amounts reported on the annual expenditure reports. ESSER III, Resource 3213, reported expenditures of $901,021 while the SEFA reported $952,102. ESSER III ‐ Learning Loss, Resource 3214, reported expenditures of $145,070 while the SEFA reported $159,989. Questioned Costs Since the correct expenditures were reported on the SEFA, and the annual expenditure reports were only off due to incorrect dates being used to run general ledger reports, the likely questioned cost will be $0. Context The County did not comply with the reporting requirements as specified by the California Department of Education because of the incorrect date used to run reports. Effect The County did not comply with the reporting requirements as specified by the California Department of Education, as well as the internal control requirements for Federal awards. Cause The condition identified appears to have materialized due to the Business Services personnel not using the most up to date general ledger reports when preparing their annual expenditure reports. Repeat Finding No. Recommendation The District should review their policies and procedures related to required reporting requirements of federal awards and ensure that general ledger reports being used are the most accurate and up to date reports.