Finding Text
Item:
2023-003
Assistance Listing Number:
84.425U
Programs:
COVID-19 - American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER)
Federal Agency:
U.S. Department of Education
Pass-Through Agencies:
Arizona Department of Education
Pass-Through Grantor Identifying Number:
Unknown
Award Year:
April 19, 2022 to September 30, 2024
Compliance Requirement:
Allowable Activities and Costs
Criteria:
In accordance with 2 CFR § 200.430 – Compensation – the entity’s system of internal controls should include a process to review after-the-fact interim charges made to federal awards based upon budget or allocation estimates.
Condition:
The entity’s system of internal controls did not include a process to review after-the-fact interim payroll charges made to federal awards based upon budget or allocation estimates.
Questioned Costs:
n/a
Context:
In a population of 225 payroll costs charged to the program, we conducted a non-statistical sample of 23 payroll costs charged to the program. In our sample of 23, we noted that all selections were charged to the program based on estimated allocations determined in advance based on job descriptions and duties. We noted that actual time incurred was not used to charge expenditures to the program. Payroll records and the nature of the Organization's programs evidenced that allowable cost and activities occurred such that costs charged to the program were supported. However, recordkeeping regarding the measurement of actual effort compared to budgeted or allocated effort was inadequate. As such, this is deemed to be a material weakness in internal control over compliance.
Effect:
The system of internal controls was not properly designed to detect potential adjustments needed to the amounts that were billed based upon budget or allocation estimates.
Cause:
Special Olympics Arizona, Inc. did not design processes and controls to perform the after-the-fact review.
Identification as a Repeat Finding:
Repeat finding of 2022-03
Recommendation:
The entity should design processes and controls to perform the after-the-fact review or implement a process that will allow for billing of actual expenses rather than budgeted expenses.
Views of Responsible Officials:
Management of the Organization concurs with the finding. See Corrective Action Plan.