Finding Text
Title 2 U. S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), 2 CFR 200.403(g) outlines the factors affecting allowability of costs charged to a federal award, specifically that costs should be adequately documented.
Twenty-five (25) expenditures were initially tested from the Education Stabilization Fund. The test indicated that the Board recorded a journal entry to charge $627,472.58 to the Education Stabilization Fund that was not supported by documentation. Six (6) additional journal entries were tested and four (4) of these journal entries that charged $405,002.44 to the Education Stabilization Fund were not supported by documentation. Therefore, a total of $1,032,475.02 in expenditures charged to the Education Stabilization Fund were undocumented and unsupported.
The Board did not have procedures in place to ensure costs charged to the Education Stabilization Fund were adequately documented. As a result, the Board is not in compliance with Uniform Guidance as it pertains to documentation of costs charged to the Education Stabilization Fund. Questioned costs of $1,032,475.02 will be reported for the Education Stabilization Fund which represent material noncompliance to the program, and also a material misstatement to the Schedule of Expenditures of Federal Awards.
Recommendation
The Board should establish procedures to ensure all costs charged to federal programs, including
journal entries, are supported by adequate documentation.
Views of Responsible Officials of the Auditee
The Board agreed with the finding.