Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2023 Assistance Listing #: 84.010A
Federal Agency: US Department of Education
Pass-through Entity number: 41
Pass-through Agency: WV Department of Education
Grant Title: Supporting Effective Instruction State Grants (Title II) Federal Award Number and Year: 2023 Assistance Listing #: 84.367 and 84.367A
Federal Agency: US Department of Education
Pass-through Entity number: 40
Pass-through Agency: WV Department of Education
Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2023 Assistance Listing #: 84.425U
Federal Agency: US Department of Education
Pass-through Entity number: 52
Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Title II, and ESSER programs. CONTEXT: Specifically, we identified the following:
Sixty non-payroll expenditure transactions were sampled from a population of 204 for Title I Grants to Local Education Agencies, of which Fifty-seven expenditures, or 95% of the sample size, totaling $208,000, did not have Program Director approval prior to payment. Fourteen expenditures, or 23% of the sample size, totaling $144,290, in which the contract was not available for review for contracted services. Twenty-three expenditures, or 38% of the sample size, totaling $30,152, in which purchase orders were not signed. One expenditure, or 2% of the sample size, totaling $2,783, in which an itemized invoice was not available for review. Three expenditures, or 5% of the sample size, totaling $8,003, in which the expenditure was not properly coded. One expenditure, or 2% of the sample size, totaling $6,485, in which the invoice was not itemized. Eleven expenditures, or 18% of the sample size, totaling $25,811, in which the purchase order was dated after the invoice. In addition, one expenditure was $120 more than the approved purchase order. One expenditure, or 2% of the sample size, totaling $23, in which State sales tax was paid. Twenty-three expenditures, or 38% of the sample size, totaling $25,989, which were not supported with adequate documentation. Nine non-payroll expenditures were sampled from a population of 53 for the Supporting Effective Instruction State Grants program (Title II), of which Three expenditures, or 33% of the sample size, totaling $2,827, did not have Program Director approval prior to payment. Four expenditures, or 44% of the sample size, totaling $6,545, in which the purchase order was not signed. Two expenditures, or 22% of the sample size, totaling $3,195, in which the purchase order was dated after the invoice. Sixty non-payroll expenditure transactions were sampled from a population of 93 for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Fifty-four expenditures, or 90% of the sample size, totaling $3,136,290, did not have Program Director approval prior to payment. One expenditure, or 2% of the sample size, totaling $27,665, in which the expenditure was not properly coded. Nineteen expenditures, or 32% of the sample size, totaling $176,763, in which the contract was not available for review for contracted services. Twenty-one expenditures, or 35% of the sample size, totaling $814,912, in which the purchase order was not signed. One expenditure, or 2% of the sample size, totaling $6,485, in which the invoice was not itemized. Twenty-four expenditures, or 40% of the sample size, totaling $940,689, in which the purchase order was dated after the invoice. In addition, one expenditure was $12,000 more than the approved purchase order. Sixteen expenditures, totaling $81,698, that did not have any bid documentation available for review. Ten expenditures, totaling $143,731, were not included in the approved ESSER budget. Six expenditures, totaling $118,731, in which ESSER funds were used to match other federal funds. Three expenditures, totaling $32,460, for activities such as passes or tickets where there was no support to indicate who received the passes or tickets. The final cost of a construction project was $81,589 more than the original bid and also exceeded the next two highest original bids with no documentation available for review regarding change orders or approvals thereof. The Board allowed a construction project to begin knowing that there was a deficit of $107,246 and no known available funding to complete the project. In addition, we tested 20 personnel files and related payroll expenditures for the above federal programs and noted the following items: One employee was overpaid $1,775 for supplemental duties based on support available for review. Six employees did not have a proper verification of education in their file. Five employees did not have a valid employment contract in their file. Four employees were paid supplements, totaling $55,351, and did not have support in their file. Five employees did not have a valid extra-duty employment contract in their file. Four employees did not have an IRS W-4 withholding form. Ten employees did not have a WV IT-104 withholding form. Twenty employees did not have voluntary withholding forms available for review. CRITERIA:
Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." Title 34 U.S. Code of Federal Regulations (CFR) Part 75, Subpart E §75.604 states, in part, that: "A grantee shall ensure that sufficient funds are available to meet any non-Federal share of the cost of constructing the facility." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Title II, and ESSER Programs. REPEAT FINDING: No RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, All expenditures be no greater than the remaining amount on their corresponding blanket purchase orders, Each expenditure be coded in accordance with the Board of Education's chart of accounts, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures. The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented. Management of the Upshur County Board of Education should follow the guidance set forth in Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75.
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Board has developed procedures to ensure that all purchased orders are approved before orders are placed, all expenditures are properly authorized by the respective program director and supporting documentation is adequately maintained. The Board is using a requisition form in Droplet to achieve this goal. All employees authorized to make or approve purchases have been trained on purchasing procedures outlined in the Purchasing Policies and Procedures and Procedures Manual for Local Educational Agencies in the State of West Virginia by the WVDE Office of School Finance on 2/23/2024.