Finding Text
2022-001 Improve Controls and Documentation over Disbursements Process Federal Program(s) Information Federal Agency: U.S. Department of Education Cluster: Special Education Cluster Award Name: Special Education Grants to States Special Education Preschool Grants AL Number(s): 84.027 84.173 Pass-through Entity: Massachusetts Department of Elementary and Secondary Education Award Year: 2022 Compliance Requirement Activities Allowed/Allowable Costs Type of Finding Compliance Internal Control over Compliance - Significant Deficiency Criteria or Specific Requirement Grantees must provide reasonable assurance that federal awards are expended only for allowable activities and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Management of the Town is also responsible for establishing and maintaining effective internal control over compliance with Federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context Control deficiencies related to disbursements were noted as a result of the testing of internal controls. A sample of disbursements charged to the grants was tested for proper supporting documentation in order to determine if they were in accordance with Activities Allowed/Allowable Costs. As a result of the testing of payroll disbursements charged to the grants, certain costs were found that did not meet the time and effort documentation requirements. Specifically, time sheets and semi-annual certifications were not provided. Cause Weaknesses in the design and operation of controls. Effect or Potential Effect Due to the weaknesses in internal controls noted above, there is a risk that amounts charged to federal awards are not allowable or in accordance with applicable cost principles. Known questioned costs are reported below, calculated as all payroll charges to the cluster: AL Questioned Number(s) Name of Federal Program or Cluster Costs 84.027/84.173 Special Education Cluster $148,400 Recommendation Improvements in internal controls should be implemented in order to address the weaknesses in internal controls noted and to ensure compliance with the requirements of the Uniform Guidance. Specifically, the Town should require that all payroll charged to the special education cluster be supported by appropriate time and effort documentation, such as time sheets and semi-annual certifications. This will address the weaknesses in internal controls noted above and provide reasonable assurance that federal awards are expended only for allowable activities, and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Views of Responsible Official Management agrees with the finding. Planned Corrective Action Management?s corrective action plan is included at the end of this report after the summary schedule of prior year audit findings and status.