Finding Text
Finding 2023-007 Lack of Documentation of Approval – Federal and State Awards
Type of Finding: Significant Deficiency in Internal Control Over Compliance
Federal Agency: U.S. Department of Education
Assistance Listing Numbers: 84.027A, 84.173A, 84.173X
Federal Program Titles: Special Education Grants to States, Special Education Preschool Grants,
COVID-19 Special Education Preschool Grants
Pass-through Agency: Wisconsin Department of Public Instruction
Pass-Through Numbers: 2022-405026-DPI-FLOW-341, 2023-405026-DPI-FLOW-341, 2022-405026-DPI-PRESCH-347, 2023-405026-DPI-PRESCH-347, 2022-405026-DPI-PRESCH-346
Award Period: July 1, 2022 – June 30, 2023
State Compliance Component: Community Service Fund
Compliance Requirements: Allowable Costs/Cost Principles
Condition: The District did not properly document prior approval for cash disbursements in the Special Education Cluster or the Community Service Fund.
Context: While performing cash disbursement testing, three of the eleven disbursements tested for the Special Education Cluster did not contain documentation of approval. Two of the seventeen disbursements tested for the Community Service Fund did not contain documentation of approval.
Criteria: The review and approval of disbursements by staff is an internal control intended to prevent, detect, and correct a potential omission or misstatement in the financial statements or a potential unallowable cost.
Cause: The lack of documentation of approval is due to turnover in the Finance department and a lack of segregation allowing disbursements to get posted to
the financial system and paid without documentation of approval.
Effect: Errors or intentional fraud could occur and not be detected in a timely manner by other employees in the normal course of their responsibilities as a result of the lack of documentation of approval. There is also potential for unallowable costs to be charged to the program.
Recommendation: We recommend that the District continue to monitor the processes and controls over cash disbursements. We recommend that all disbursements contain documentation of approval at both the invoice level, and also within the accounting system prior to payment and processing.
Management Response: There is no disagreement with the audit finding.