Finding 502111 (2023-003)

SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE – U.S. DEPARTMENT OF EDUCATION, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES – ALN NO. 84.010 2023-003 Internal Control Over Compliance With Federal Allowable Cost Requirements Criteria – 2CFR Part 200, Subpart F, § 430(i) requires that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition – The District’s internal control system for documenting employee time supporting salaries charged to the Title I program for teachers assigned to the program as a single cost objective, requires the completion of semi-annual certifications approved by the employees’ supervisor. For three of five Title I teacher salaries tested, this documentation was either missing, incomplete, or lacking documentation of approval. Questioned Costs – None. For each of the three teacher salaries tested that lacked the prescribed documentation, the District was able to produce adequate alternative documentation to provide reasonable assurance that the salaries charged to the Title I program during the period tested were accurate, allowable, and properly allocated. Context – For one of five employees tested, no semi-annual certification forms were completed. For one of five employees tested, a semi-annual certification was prepared and approved for one-half of the year, but not for the other half. For one of five employees tested, semi-annual certifications were prepared, but had not been signed by the employee’s supervisor. This was not a statistically valid sample. Repeat Finding – This is a current year finding. Cause – The District’s internal control procedures for documenting employee time and effort supporting single cost objective salaries charged to the Title I program was not being consistently followed. Effect – The lack of documentation could result in unallowable costs being charged to the federal program or having allowable costs be disallowed by the grantor due to insufficient documentation. Recommendation – We recommend the District ensure its internal controls for documenting employee time and effort supporting single cost objective salaries charged to the Title I program be consistently followed for all applicable costs in the future. View of Responsible Official and Planned Corrective Actions – There is no disagreement with the audit finding. District management will ensure that appropriate time and effort documentation is prepared, approved, and kept on file to support all salaries charged to federal programs going forward. The District has separately issued a Corrective Action Plan related to this finding.