Finding 384451 (2023-004)

Material Weakness
Requirement
P
Questioned Costs
-
Year
2023
Accepted
2024-03-26
Audit: 297588
Organization: Unified School District No. 321 (KS)
Auditor: Ssc CPAS P A

AI Summary

  • Core Issue: The District lacks effective internal controls over the preparation of the Schedule of Expenditures of Federal Awards, leading to potential inaccuracies and noncompliance.
  • Impacted Requirements: The preparation must conform to 2 CFR 200, Subpart F, ensuring accurate reporting of federal expenditures.
  • Recommended Follow-Up: The Board of Education should review the financial reporting process and conduct a risk assessment to implement necessary internal controls.

Finding Text

2023-004 Preparation of and Internal controls over Schedule of Expenditures of Federal Awards Preparation (Material Weakness) Federal Agency: U.S Department of Education Program Name: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555 and 10.559 Award Period: June 30, 2023 Criteria: According to 2 CFR 200, Subpart F, the District is required to prepare a schedule of federal expenditures, which must include the total federal awards expended as determined in accordance with §200.502. An effective internal control system exists if controls are effective in preventing or detecting material misstatements in the preparation of the schedule of federal expenditures of federal awards (the schedule). It provides reasonable assurance for the reliability of financial information and compliance with laws and regulations. Condition: We have determined that there was an inadequate design of internal control over the preparation of the schedule during the fiscal year ended June 30, 2023. The current financial reporting process does not ensure accuracy and completeness in the preparation of the schedule by the District, as required by Uniform Guidance. Cause: The District’s policies and procedures were not designed to ensure the District’s preparation of the schedule in conformity with Uniform Guidance. Effect: The District did not prepare the schedule in conformity with Uniform Guidance. This increases the likelihood of a material misstatement and noncompliance with laws and regulations. Recommendation: We recommend the Board of Education and management review the financial reporting process. Once this review is complete, the District should then perform a risk assessment to determine the best way to implement appropriate internal controls over financial reporting to ensure that the District prepares the schedule conformity with Uniform Guidance. Questioned Costs: None. Repeat Finding: No. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and plans to develop proper written policies and procedures for the internal control over compliance to ensure accuracy and completeness in the District’s preparation of the schedule as required by Uniform Guidance.

Corrective Action Plan

March 21, 2024 U.S. Department of Education Washington, D.C. Unified School District No. 321 respectfully submits the following corrective action plan for the year ended June 30, 2023. SSC CPAs, P.A. 3025 Cortland Circle, Suite 201 Salina, Kansas 67401 Audit period: Year ended June 30, 2023 The findings from the June 30, 2023 schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Section I of the schedule, Summary of Audit Results, does not include findings and is not addressed. FINDINGS-FINANCIAL STATEMENT AUDIT 2023-001 Internal Controls over Financial Statement Presentation (Material Weakness) Recommendation: The Board of Education and management should review the financial reporting process. Once this review is complete, the District should then perform a risk assessment to determine the best way to implement appropriate internal controls over financial reporting to ensure conformity with the regulatory basis of accounting. Action Taken (Unaudited): Management plans to review the financial reporting process and implement appropriate internal controls over financial reporting to ensure conformity with the regulatory basis of accounting. Contact Name – Kristy Dyche Expected Completion Date - 06/30/2024 2023-002 Internal Controls over Adjustments to Expenditures (Material Weakness) Recommendation: The Board of Education and management should review the process of moving expenditures between funds so that negative (credit) balances are not reported in general ledger accounts. Adjustments to expenditure accounts in the general ledger should be supported by proper documentation and allocation of expenditures. Action Taken (Unaudited): Management plans to review the process of moving expenditures and develop appropriate internal controls to ensure adjustments to expenditure accounts in the general ledger are supported by proper documentation. Contact Name – Kristy Dyche Expected Completion Date - 06/30/2024 2023-003 Internal Controls over Compliance with Kansas Statutes (Significant Deficiency) Recommendation: The Board of Education and management should review the expenditures in funds to ensure that no indebtedness is created in excess of budget limits. Action Taken (Unaudited): Management plans to review the process or tracking expenditures and develop appropriate internal controls to ensure that no indebtedness is created in excess of budget limits in budgeted funds. FINDINGS-FEDERAL AWARD PROGRAMS AUDIT 2023-004 Preparation of and Internal controls over Schedule of Expenditures of Federal Awards Preparation (Material Weakness) Federal Agency: U.S. Department of Education Program Names: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555 and 10.559 Award Period: June 30, 2023 Recommendation: The Board of Education and management should review the financial reporting process. Once this review is complete, the District should then perform a risk assessment to determine the best way to implement appropriate internal controls over financial reporting to ensure that the District prepares the schedule conformity with Uniform Guidance. Action Taken (Unaudited): Management plans to develop proper written policies and procedures for the internal control over compliance to ensure accuracy and completeness in the preparation of the schedule as required by Uniform Guidance. Contact Name – Kristy Dyche Expected Completion Date - 06/30/2024 If the U.S. Department of Education has questions regarding this plan, please call Kristy Dyche at 785-437-2254. Sincerely yours, Kristy Dyche Board Clerk Unified School District No. 321

Categories

Reporting Subrecipient Monitoring Material Weakness School Nutrition Programs

Other Findings in this Audit

  • 384452 2023-004
    Material Weakness
  • 384453 2023-004
    Material Weakness
  • 960893 2023-004
    Material Weakness
  • 960894 2023-004
    Material Weakness
  • 960895 2023-004
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
10.555 National School Lunch Program $517,984
84.425 Education Stabilization Fund $304,592
84.027 Special Education_grants to States $256,873
84.010 Title I Grants to Local Educational Agencies $190,793
10.553 School Breakfast Program $179,195
32.009 Emergency Connectivity Fund Program $102,125
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $84,308
93.558 Temporary Assistance for Needy Families $62,500
10.559 Summer Food Service Program for Children $47,450
84.367 Improving Teacher Quality State Grants $46,740
84.060 Indian Education_grants to Local Educational Agencies $20,955
84.424 Student Support and Academic Enrichment Program $18,493
84.173 Special Education_preschool Grants $10,000
84.048 Career and Technical Education -- Basic Grants to States $475