Finding 501713 (2023-007)

Federal Agency: Department of Education Federal Program Name: COVID-19 Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D, & 84.425U Federal Award Identification Number and Year: S425V210045 Awarded fiscal year 2023 Pass-Through Agency: Minnesota Department of Education Pass-Through Number(s): S425D210045 Award Period: 7/1/2022 – 6/30/2023 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters Criteria or specific requirement: The School should have an internal control over each major compliance area, including allowability, to ensure all payments are allowable for the grant to which they are coded. Condition: It was noted that manual checks, wire transactions, and debit card purchases did not have documentation of the transactions being reviewed and approved. It was noted during payroll testing that none of the disbursements tested had documentation of reviewing the payment for allowability or amount. There was also no documentation of review for time and effort documentation. There were also payments to individuals for incorrect amounts that were charged to the grant. Questioned costs: $1,254.44 Context: Of the eight cash disbursements tested two of them did not have documentation of review and approval. Of the eight payroll items tested, none of them had documentation of review and approval. Of the eight payroll items tested five of them had discrepancies between the amount paid to the individual and their approved contract. In some instances, there was an overpayment and in others an under-payment which caused some additional costs to be coded to the federal expenditures for this program. Cause: These types of payments were not reviewed and approved at a detailed level during the year, or if they were, that review was not formally documented. Effect: The School does not have any documentation of someone reviewing and approving the expenditures charged to the federal program, and in some situations paid out incorrect amounts to individuals coded to the program. Repeat Finding: No Recommendation: We recommend that all purchases and payroll are reviewed and approved, with part of that procedure being to review that the expenditures are allowable for the grant to which they are being recorded, and that time and effort are properly documented and reviewed. This review and approval should be documented so it is clear who reviewed it and when. Views of responsible officials: There is no disagreement with the audit finding.