Finding 42582 (2022-001)

Significant Deficiency
Requirement
B
Questioned Costs
$1
Year
2022
Accepted
2023-07-11

AI Summary

  • Core Issue: The Mineral Springs School District improperly charged $38,219 in unallowable costs to ESSER funds due to inadequate internal controls.
  • Impacted Requirements: Compliance with OMB 2 CFR, part 200, which mandates that costs must be necessary, reasonable, and well-documented for federal awards.
  • Recommended Follow-up: The District should seek guidance from DESE and enhance controls over program expenditures to prevent future issues.

Finding Text

SIGNIFICANT DEFICIENCY U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND ? AL NUMBER 84.425D and 84.425U PASS-THROUGH NUMBER 3104 AUDIT PERIOD ? YEAR ENDED JUNE 30, 2022 2022-001 ALLOWABLE COSTS/COST PRINCIPLES Criteria or specific requirement: Office of Management and Budget (OMB) 2 CFR, part 200, subpart E ? Cost Principles establishes principles for determining allowable costs incurred by the District under federal awards. Such costs are necessary and reasonable for the performance of the federal award and adequately documented. Condition: On August 18, 2022, the Arkansas Division of Elementary and Secondary Education (DESE) conducted an on-site monitoring of the Mineral Springs School District?s use of Elementary and Secondary School Emergency Relief (ESSER) funds. DESE?s report issued on August 24, 2022, stated the district must move all expenditures related to a fieldhouse addition from ESSER funds to a local fund source. These expenditures included, but were not limited to, contractor fees, architect fees, labor, supplies, and equipment. As a result, the District identified $101,276 in unallowable fieldhouse expenditures and correctly transferred these expenditures to local funds. However, during our examination of expenditures, we identified an additional $38,219 in unallowable fieldhouse expenditures that were not identified and corrected by the District. Cause: Lack of internal controls and management oversight over program expenditures. Effect or potential effect: Unallowable costs of $38,219 were paid from COVID-19-Education Stabilization Fund. Questioned costs: The amount of questioned costs was $38,219. Context: An examination of fieldhouse expenditures totaling $139,495. Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The District will implement proper controls over program expenditures. We have contacted DESE for assistance on correcting this.

Categories

Questioned Costs Allowable Costs / Cost Principles Internal Control / Segregation of Duties

Other Findings in this Audit

  • 42581 2022-001
    Significant Deficiency
  • 619023 2022-001
    Significant Deficiency
  • 619024 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.425 Covid-19 - Education Stabilization Fund $1.16M
84.010 Title I Grants to Local Educational Agencies $230,726
84.027 Special Education_grants to States $96,806
10.553 School Breakfast Program $80,834
84.367 Supporting Effective Instruction State Grants $56,020
84.358 Rural Education $16,739
84.424 Student Support and Academic Enrichment Program $16,585
10.555 National School Lunch Program $15,612
10.582 Fresh Fruit and Vegetable Program $9,546
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $5,455
84.173 Special Education_preschool Grants $2,442