Finding 504381 (2024-001)

Significant Deficiency
Requirement
B
Questioned Costs
-
Year
2024
Accepted
2024-11-01
Audit: 326950
Organization: Alpena Public Schools (MI)

AI Summary

  • Core Issue: There were misallocations of function and object codes in grant expenditures compared to the approved budget by MDE, indicating a significant deficiency in internal controls.
  • Impacted Requirements: Compliance with Uniform Guidance and specific federal grant requirements was not met due to insufficient budgetary review processes.
  • Recommended Follow-Up: The School District should enhance its internal controls for budget reviews to ensure accurate tracking of actual expenditures against MDE-approved budgets.

Finding Text

2024-001 – Significant Deficiency in Internal Control over Major Federal Program and Noncompliance – Budget Allocation. Career and Technical Education – Basic Grants to the States, ALN # 84.048 and #84.048A, Award Numbers 233480 231400, 233480 231405, 233480 231410 and 243520 24124; and American Rescue Plan Act, Homeless Children and Youth II (COVID-19), ALN # 84.425W, Award Number 211012 2122 Federal Agency: U.S. Department of Education Criteria – Management is responsible for complying with the specific compliance requirements set forth by the Uniform Guidance, the U.S. Department of Education and the District’s pass-through entity Michigan Department of Education (MDE), as it relates to federally funded grants. Title 2 CFR 200.403 requires that costs be charged appropriately according to budget and that costs be necessary and reasonable for the performance of the grant. Condition- As a result of our audit procedures, we identified function and object codes misallocated in comparison to the grant budget approved by MDE. Neither grant misallocations were material to the grants. Cause and Effect – The District’s internal control over grant compliance, along with budgetary review, were not sufficient to detect and correct errors in a timely manner. The effect was that actual costs were not recorded accurately with the grant budget by either function or object codes. Questioned Costs – None. The grants were not overspent in total, nor would the grant expenditure tests have been considered unallowable if they had been correctly allocated with the budget. Career and Technical Education had five instances. American Rescue Plan Act, Homeless Children and Youth II had one instance which was adjusted and corrected. Recommendation – We recommend the School District expand its internal control over budgetary review of its grants, particularly in regard to reviewing MDE approved budgeted amounts to actual expenditures. View of Responsible Officials – The School District agrees with our finding and recommendation. Planned Corrective Actions – See corrective action plan, annexed.

Corrective Action Plan

Corrective Steps Taken – The District will implement the reinforcement of its internal controls. Expenditures will be verified against the MDE approved budget.

Categories

Allowable Costs / Cost Principles

Other Findings in this Audit

  • 504382 2024-001
    Significant Deficiency
  • 504383 2024-001
    Significant Deficiency
  • 504384 2024-001
    Significant Deficiency
  • 504385 2024-001
    Significant Deficiency
  • 504386 2024-002
    Significant Deficiency
  • 504387 2024-002
    Significant Deficiency
  • 504388 2024-002
    Significant Deficiency
  • 504389 2024-002
    Significant Deficiency
  • 1080823 2024-001
    Significant Deficiency
  • 1080824 2024-001
    Significant Deficiency
  • 1080825 2024-001
    Significant Deficiency
  • 1080826 2024-001
    Significant Deficiency
  • 1080827 2024-001
    Significant Deficiency
  • 1080828 2024-002
    Significant Deficiency
  • 1080829 2024-002
    Significant Deficiency
  • 1080830 2024-002
    Significant Deficiency
  • 1080831 2024-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.425U Education Stabilization Fund $2.72M
84.010 Title I Grants to Local Educational Agencies $1.05M
10.553 School Breakfast Program $528,232
84.048A Career and Technical Education -- Basic Grants to States $228,561
84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) $193,543
84.358B Rural Education $110,073
10.555 National School Lunch Program $101,150
84.048 Career and Technical Education -- Basic Grants to States $98,605
84.424 Student Support and Academic Enrichment Program $93,830
84.425D Education Stabilization Fund $74,692
10.582 Fresh Fruit and Vegetable Program $44,658
84.196 Education for Homeless Children and Youth $32,088
93.778 Medical Assistance Program $26,425
84.425W Education Stabilization Fund $22,827
84.010A Title I Grants to Local Educational Agencies $12,882
10.579 Child Nutrition Discretionary Grants Limited Availability $9,885