Finding 380796 (2023-001)

Significant Deficiency 2023-001. Allowable Costs/Cost Principles United States Federal Communications Commission: COVID-19: Emergency Connectivity Fund Program ALN: 32.009 Criteria: The District is required to make purchases for only eligible devices or equipment for unmet student or staff members needs in order to comply with the program application and guidelines for the Emergency Connectivity Fund Program. This requirement is also in accordance with the allowability of reasonable costs under the Uniform Guidance Subpart E, 2 CFR §200.404. Condition: Subpart E, 2 CFR §200.404 of the Uniform guidance requires that any monies charged to the Emergency Connectivity Fund Program be reasonable costs allowable under the approved grant application, including the grant requirement that reimbursed costs for devices or equipment are only eligible for a one-per user limitation. During the current year, we noted that the District purchased and was reimbursed for additional devices or equipment beyond the unmet need and the one per-user limitation. Cause: The District’s final reimbursement of funds, incorrectly included purchases for devices and equipment, which was over the unmet need of the District and also included reimbursement for equipment and devices that exceeded the allowable one-per user limitation. Effect: Noncompliance with these requirements resulted in the District being reimbursed more than the unmet need of students and staff members, and the provision of devices or equipment that was in excess of user limitation per the grant requirements. Questioned Costs: $29,376 of reimbursements received were more than the allowable costs under the grant (92 devices or equipment at an approximate cost of $319.30 each). Context: The program guidelines specify that devices or equipment are to be provided for unmet student or staff member needs and at a one per-user limitation. During a review of the District’s current year inventory tracking system, it was discovered that there were devices or equipment purchased, distributed, and reimbursed for more students than originally applied for, and in some instances more than the one-per user limitation. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The District should gain a better understanding of the program application and guidelines and ensure that they comply with those guidelines and are only reimbursed for allowable items provided to eligible students and staff members per the grant terms. Under this specific grant, there was limited funding for eligible schools to purchase no more than one connected device per student or school staff member, as a result of the implications brought about by COVID-19. The District should review its determination of students and staff members with an unmet need and request reimbursement for only those devices approved in the original application. In addition, the District should contact the federal agency to see how they need to remediate the excess reimbursement received for the amount that was ineligible in accordance with the grant. Views of Responsible Officials of Auditee: The District agrees with the recommendation, and the Assistant Superintendent for Finance and Management Services will contact the federal agency to determine the appropriate action for the reimbursement of the excess funds received.