Finding Text
U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBERS 84.425D and 84.425U PASS-THROUGH NUMBER 6703 AUDIT PERIOD - YEAR ENDED JUNE 30, 2022 2022-001 - Allowable Costs/Cost Principles Criteria or specific requirement: Purchases of equipment and other capital expenditures require the written prior approval of the Federal awarding agency or pass-through entity, as specified in Office of Management and Budget (OMB) 2 CFR section 200.439. Condition: In our test of equipment purchases from the COVID-19 Education Stabilization Fund, we identified the purchase of two pieces of equipment with unit costs greater than the $5,000 threshold for which the District did not obtain prior written approval from the Arkansas Division of Elementary and Secondary Education. Cause: Lack of internal controls and management oversight over program expenditures. Effect or potential effect: Unallowable costs of $19,403 were paid from the COVID-19 Education Stabilization Fund. Questioned costs: The amount of questioned costs was $19,403 Context: As a result of an examination of 3 checks (totaling $107,678) from a population of 40 checks (totaling $521,325), we identified 1 unauthorized purchase for 2 pieces of equipment totaling $19,403 that did not contain evidence of prior written approval from the pass-through agency. Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The Horatio School District has received approval for all equipment greater than the $5000 threshold as required COM-22-047 since the purchase.