Finding Text
U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION "COVID-19 - AMERICAN RESCUE PLAN - ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425U" PASS-THROUGH NUMBER 4602 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 prior written approval of the Federal awarding agency or pass-through entity, as specified in OMB 2 CFR section 200.439. Condition: During our examination of expenditures, we identified a facilities improvement purchase in which the District did not obtain prior written approval. Expenditures paid from the Education Stabilization Fund for this project totaled $218,614. Subsequent to audit discovery, the District obtained retroactive 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 $218,614 were paid from COVID-19-Education Stabilization Fund. Questioned costs: The amount of questioned costs was $218,614. Context: An examination of 11 checks (totaling $358,047) from a population of 17 capital improvements checks (totaling $380,220) revealed 8 checks (totaling $218,614) 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 (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: We have been in contact with DESE for guidance and will continue to do so regarding this fund. We will implement proper internal controls over program expenditures. Documentation has already been received from DESE to assist in this finding.