Finding Text
Finding 2022-001 – Special Education Cluster – AL No.’s 84.027 & 84.173
Department of Education
Massachusetts Department of Elementary and Secondary Education
Massachusetts Department of Early Education and Care
Noncompliance and Significant Deficiency Related to Internal Control over Compliance of the Major Programs
Criteria: 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 over payroll. Specifically, a sample of payroll disbursements charged to the programs were tested in order to determine if adequate internal controls were in place. As a result of the testing of payroll disbursements charged to the programs, all of the employees tested were found to not have adequately approved employee payroll rate agreements.
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 of inappropriate salaries and wages being paid.
Identification as a Repeat Finding: Yes, finding number 2021-001
Questioned Costs: Questioned costs are reported equal to $256,796, calculated as payroll charged to the programs.
Recommendation: The Town should improve internal controls over Activities Allowed/Allowable Costs by ensuring employee’s payroll rate agreements are approved by an appropriate level of management and in a timely manner.
Managements Response: Though we believe that Finding 2021-001occured due to staff turnover at the time of the rate agreement approval, the Town and the Schools will assure federal awards are expended only for allowable activities. Consistent with State and Federal requirements and as in Acushnet’s updated Federal Grant Procedures Manual (February 2023), the Town will maintain source documentation (invoices, time sheets, payroll stubs, etc.) – including approved payroll rate agreements – that support federal expenditures.