Finding Text
2023 – 005 – Allowable Costs/Cost Principles – Indirect Costs
Federal Agency: U.S. Department of Education
Federal Program Name: Education Stabilization Fund
Assistance Listing Number: 84.425
Pass-Through Agency: Arizona Department of Education
Pass-Through Number(s): All Pass-Though Numbers Present in the SEFA
Award Period: March 2020 through September 2024
Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample.
Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria: In accordance with 2 CFR 200.334 Retention requirements for records, financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. Federal awarding agencies and pass-through entities must not impose any other record retention requirements upon non-Federal entities.
Condition/Context: For one of the two samples selected the indirect cost was calculated incorrectly when compared to the supporting documentation.
Questioned costs: None greater than the reportable amount.
Cause: The District was not aware of the need to retain the original supporting documentation used for the indirect cost calculation.
Effect: Failure to comply with 2 CFR 200 can lead to improper payment charged to the program.
Repeat finding: No
Recommendation: We recommend management to incorporate a management review control to ensure the calculation is complete and accurate and all supporting documents including the general ledger used for the calculation is retained in accordance with UG.
Views of responsible officials: There is no disagreement with the audit finding. See corrective action plan.