Finding Text
SIGNIFICANT DEFICIENCY Compliance ? Allowable Costs/Cost Principles Criteria: Expenditures reported from the Education Stabilization Fund should be supported by proper documentation and be allowable under program guidelines. Condition: In FY 21-22 Nash County Public Schools (NCPS) implemented an IT device "refresh" where all devices were to be replaced throughout the district for students and administrators. This "refresh" was to be funded initially using ESSER funding (PRC 181). In January 2022 NCPS received an Emergency Connectivity Funding (ECF) grant and the decision was made to use the ECF grant to fund the "refresh". Since the ECF grant was to be used, payment for the devices was to be made directly to the vendor, CDW-G, by the Universal Service Administrative Co. (USAC). CDW-G required a purchase order and one was issued using an ESSER budget code to generate the purchase order. The purchase order total was zeroed out by reflecting a discount of the total purchase price as recommended by CDW-G. NCPS was informed by CDW-G via e-mail that NCPS would not be billed for this purchase order and USAC would be billed directly. USAC paid the bill in full prior to June 30, 2022. In June 2022, NCPS finance department staff pulled the purchase order and requested an invoice from the IT department, overlooking the $-0- total on the purchase order. The IT department requested an invoice from CDW-G. The invoice was sent to IT via e-mail and given to finance department staff who paid the $1,108,657.42 invoice per check #676626 dated 6/7/2022. Federal PRC 181 was used as the funding source for the check. CDW-G cashed the check and notified NCPS that USAC had already paid the invoice and that NCPS? payment was made in error. CDW-G issued NCPS a refund for the full amount of the payment via ACH on 7/26/22. Effect: $1,108,657.42 of Education Stabilization funds were paid to a vendor (CDW-G) for an invoice for computer devices that had already been paid from Emergency Connectivity funds. Cause: Controls were not in place to ensure that invoices paid using Education Stabilization funds were supported by proper documentation with proper administrative approvals. Questioned costs: At June 30, 2022, NCPS has recorded a receivable for $1,108,657.42 from CDW-G and a corresponding payable to the N.C. Department of Public Instruction (DPI) for repayment of the Education Stabilization funds. Identification of a repeat finding: This is not a repeat finding from the immediate previous audit.Recommendation: We recommend that controls be put in place to ensure that any expenditures paid from Education Stabilization Fund are supported by proper documentation with proper administrative approvals. Views of responsible officials and planned corrective actions: The Board of Education agrees with this finding and will implement controls to ensure that any expenditures paid from Education Stabilization funds are supported by proper documentation with proper administrative approvals.