Finding 42026 (2022-001)

Material Weakness

Requirement

Questioned Costs

Year

2022

Accepted

2023-08-15

Audit: 39260

Organization: Northumberland School District (NH)

Auditor: Plodzik & Sanderson

AI Summary

Core Issue: The District lacks proper documentation for two employees' time spent on grant activities, violating federal regulations.
Impacted Requirements: Non-compliance with 2 CFR 200.303 and 2 CFR 200.430 regarding internal controls and accurate payroll records.
Recommended Follow-up: Ensure all employees' salary distributions are documented to meet federal requirements for grant funding.

Finding Text

Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the District, as a recipient of Federal funds, must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, under 2 CFR 200.430, it states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must (I) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, (2) be incorporated into the official records of the non-Federal entity, (3) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, and (4) support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award or a federal award and non-Federal award. Condition: During our review of payroll charged to the grant, we noted two employees who did not have documentation to support the distribution of the employee's time spent on grant activities. Cause: Administrative oversight. Effect: The District did not have adequate documentation to support the distribution of the employee's wages paid using grant funds. Questioned Costs: $52,911 Repeat Finding: No Recommendation: We recommend that documentation be retained to support the distribution of salaries and wages for all employees paid using grant funds. Views of Responsible Officials: Management's views and corrective action plan is included at the end of this report.

Corrective Action Plan

SAU 58 had a big transition our office with the replacement of all three of our accounting positions; Business Manager, Payroll/HR and Accounts Payable & Grants. The Accounts Payable position was then vacated for a second time and we found a new replacement in Jan 2022. During this transition period the Time and Effort for two positions that were grant funded, was overlooked. We did provide documentation of payroll from Payroll/HR but did not get the signature of the teacher or other staff member on the Certification form. Typically, we would have been able to rectify the omission but the employees had both left our district at the end of the school year. The Business manager is ultimately responsible for the implementing of the process and internal controls and will follow up with the Accounts Payable clerk to be sure each month all documentation is on file. Since the new AP person came on, she has implemented a spreadsheet to track each employee paid by Federal Funding. This way we know who has submitted their certification, and at what point we are at during the year. We will be looking at electronic documents in the future for easier tracking and getting signatures on certification documents but as of now the spreadsheet has made this process much easier to track and be sure we do not miss documents. If a big transition happens again the Accounts Payable Clerk will be responsible for all grant compliance paper work. The Business Manager will oversee this process. The above processes and procedures have already been implemented and the Business Manager will follow up monthly with the Accounts Payable clerk. Name of Contact Person and Completion Date: Name 1 Heather McMann Name 2 Tiffany Griffin Anticipated Completion Date ? Already implemented.

Other Findings in this Audit

42027 2022-001

Material Weakness
618468 2022-001

Material Weakness
618469 2022-001

Material Weakness

Programs in Audit

ALN	Program Name	Expenditures
84.425	Education Stabilization Fund	$266,163
10.555	National School Lunch Program	$213,011
84.010	Title I Grants to Local Educational Agencies	$160,701
84.027	Special Education_grants to States	$19,304
84.367	Improving Teacher Quality State Grants	$10,881
84.358	Rural Education	$9,941
10.582	Fresh Fruit and Vegetable Program	$9,743
84.424	Student Support and Academic Enrichment Program	$5,650