Finding Text
Condition - The District does not have formalized or documented procedures related to the accurate tracking, recording, reconciling or oversight of grant programs. In addition, there appears to be a lack of appropriate communication between those administering the grants and those responsible for the financial records. Criteria - Costs charged to federal programs are to be supported by adequate documentation in accordance with guidelines established in the OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (commonly referred to as ?Uniform Guidance?). Furthermore, governmental accounting standards require that revenue for expenditure-driven grant programs be recognized when the District meets the eligibility requirements of the grant and the resources are considered to be available, and for the subsequent reimbursement requests to be submitted in a timely manner. When grant funds are received in advance, unearned revenue should be recorded until the costs have been incurred, eligibility requirements are met, or unexpended funds are returned to the granting agency. Effect - In connection with performing our audit testing, as described in other findings, it was discovered that the District struggled to accurately identify the correct expenditure amounts applicable to each grant, which resulted in several reimbursement requests not being submitted on a timely basis. In some instances, adjustments were required in order to properly remove eligible costs from the applicable grants due to the expiration of the available grant award. While there is no evidence that the District submitted requests for ineligible expenditures, it is apparent that the District did not submit for grant funds that they would have been entitled to had the submissions been completed timely. In addition, without adequate procedures in place, grant expenditures and revenue may not be properly identified, which could result in noncompliance with the grant requirements or Uniform Guidance. Cause - Due in part to transition of management, as described in other findings, the District does not have formalized, documented procedures for tracking and recording activity related to grants. In addition, the District did not completely perform all of the procedures that should be performed in order to properly identify eligible grant expenditure amounts for purposes of submitting timely reimbursement requests. Questioned Costs - No known questioned costs were identified during the course of the audit. Recommendation - We recommend that the District develop and implement a comprehensive set of procedures to identify and track federal and state grants. These procedures should include maintaining a schedule of all grants, detailing the source of funding, expenditures incurred and revenues earned on a grant-to-date basis and a year-to-date basis. These procedures should also include documented communication between those administering the grants and those responsible for the financial records. In addition, we recommend that the District appoint an individual with the responsibility of providing compliance oversight, specifically related to the proper recording of grant expenditures and the timely submission of reimbursement requests. The individual can either be an existing employee or an external contractor who possesses sufficient skill, knowledge or experience in understanding Uniform Guidance requirements. Management?s Response - The District will develop and implement documented procedures for recording and communicating information regarding grants. Oversight and the necessary training will be made available on an as-needed basis, in an effort to eliminate audit adjustments and ensure compliance with grant requirements. In addition, the District will develop procedures to ensure that grant draw requests are prepared, reviewed and submitted on a timely basis in accordance with the grant agreements.