Finding 48481 (2022-004)

Material Weakness
Requirement
AF
Questioned Costs
-
Year
2022
Accepted
2022-12-21
Audit: 53174
Organization: Isd #363 - Northome (MN)

AI Summary

  • Core Issue: Two transactions lacked District approval, and two equipment purchases over $5,000 did not receive required preapproval.
  • Impacted Requirements: Expenditures must be approved before incurring costs, and all expenditures should be accurately coded to specific finance and object codes.
  • Recommended Follow-Up: Ensure all expenditures receive necessary approvals and are reported under the correct codes to minimize risk of unallowable costs.

Finding Text

Federal Program - Education Stabilization Fund (84.425) Activities Allowed or Unallowed, Equipment and Real Property Management. Criteria - To ensure all expenditures charged to a program are allowable, the District should establish controls for approval of expenditures. In addition, the Minnesota Department of Education (MDE) requires all equipment purchases greater than $5,000 to receive preapproval of the equipment from MDE. Finally, all program expenditures should be coded to their specific finance and object codes to ensure accuracy of program expenditures. Condition - We tested 41 transactions and two of the transactions were not approved by the District. In addition, two equipment purchases greater than $5,000 did not receive pre-approval, but the equipment was approved by MDE at a later date. Budgeted expenditures in total agree with the actual expenditures, but the expenditures do not agree by object code (salary, supplies, etc.). Questioned Costs - None. Context - We tested 41 transactions and two of the transactions were not approved by the District. In addition, two equipment purchases greater than $5,000 did not receive pre-approval, but the equipment was approved by MDE at a later date. Budgeted expenditures in total agree with the actual expenditures, but the expenditures do not agree by object code (salary, supplies, etc.). Cause - Oversight by staff. Effect - There is an increased risk of unallowable costs being charged to grants. Repeat finding - No. Recommendation - We recommend the District obtain approvals prior to incurring the expenditures. The District should also report all expenditures to the correct finance and object code at the time the expenditure is incurred. Views of Responsible Officials and Planned Corrective Actions - The District agrees with the recommendation and will review its policies and procedures.

Categories

Allowable Costs / Cost Principles Equipment & Real Property Management Procurement, Suspension & Debarment

Other Findings in this Audit

  • 48476 2022-003
    Material Weakness
  • 48477 2022-004
    Material Weakness
  • 48478 2022-003
    Material Weakness
  • 48479 2022-004
    Material Weakness
  • 48480 2022-003
    Material Weakness
  • 624918 2022-003
    Material Weakness
  • 624919 2022-004
    Material Weakness
  • 624920 2022-003
    Material Weakness
  • 624921 2022-004
    Material Weakness
  • 624922 2022-003
    Material Weakness
  • 624923 2022-004
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
10.555 National School Lunch Program $184,194
32.009 Emergency Connectivity Fund Program $85,154
84.010 Title I Grants to Local Educational Agencies $77,754
10.553 School Breakfast Program $64,573
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $40,000
84.358 Rural Education $26,836
21.027 Coronavirus State and Local Fiscal Recovery Funds $26,020
84.041 Impact Aid $17,981
84.425 Education Stabilization Fund $12,060
84.060 Indian Education_grants to Local Educational Agencies $11,428
84.424 Student Support and Academic Enrichment Program $10,000
84.367 Improving Teacher Quality State Grants $6,321
10.582 Fresh Fruit and Vegetable Program $4,259
84.048 Career and Technical Education -- Basic Grants to States $1,169