Finding 508152 (2024-006)

Significant Deficiency
Requirement
AB
Questioned Costs
-
Year
2024
Accepted
2024-11-15
Audit: 328590
Organization: Yukon Flats School District (AK)

AI Summary

  • Core Issue: There are significant deficiencies in internal controls over payroll transactions for ESSER and Title I-A programs, leading to inadequate documentation and potential unallowable costs.
  • Impacted Requirements: Compliance with internal control processes as outlined in 2 CFR Part 200, including proper documentation and approval for transactions.
  • Recommended Follow-Up: Strengthen internal controls for payroll transactions and enhance processes for reviewing, approving, and maintaining supporting documentation.

Finding Text

Federal Agency: U.S. Department of Education passed through the State of Alaska, Department of Education and Early Development (DEED) Federal Program(s): COVID-19 CRRSA ACT: ESSER II / ARP ACT: ESSER III (ESSER) and Title I-A Assistance Listing Number(s):84.425 U and D and 84.010A Award Number(s): Federal award numbers: S425U210020, S425D210020 (ESSER), S010A230002, and S010A230002 (Title I-A), Pass through entity award numbers: ER 24.YFSD.01 (ESSER), IP 24.YFSD.01, and SI 24.YFSD.01 (Title I-A). Award Year(s): 2024 Type of Finding: Significant deficiency in internal control over compliance and noncompliance. Criteria: Management is responsible for designing, implementing and maintaining internal controls relevant to ensuring that transactions charged to programs follow proper internal control processes (2 CFR Part 200 Subpart E §200.400 (d). This includes ensuring there is proper supporting documentation for transactions as well as methods to document approval of the cost/activity to determine whether it is allowable under the funding requirements. Condition and Context: We tested a sample of fifteen (15) payroll transactions for ESSER and seven (7) payroll transactions for Title I-A. We noted four (4) instances where the transaction either lacked supporting documentation for payrate or hours worked for ESSER. We noted three (3) instances where the transaction lacked supporting documentation for payrate or hours worked for Title I-A. We also identified one (1) transaction charged to ESSER that appeared to be unallowable based on the context of the transaction. Cause: Lack of internal controls related to approval and supporting documentation for transactions charged to the programs. Effect: Lack of approval and adequate supporting documentation for transactions allows for an environment where unallowable costs could be charged to the programs.   Federal Schedule of Findings and Questioned Costs, Continued Repeat Finding: This is not a repeat finding, however, due to the number of exceptions identified, we believe this to be a systemic issue. Questioned Costs: None over the reporting threshold of $25,000. Recommendation: We recommend that management implement stronger internal controls over payroll transactions and improve the review, approval and maintenance of supporting documentation processes. Management Response: Management agrees with this finding, see Corrective Action Plan.

Corrective Action Plan

Name of Contact Person: Elena Begojevic, Business Manager Corrective Action Plan: Human resources manager will collaborate with both a business manager and a grant manager to ensure that employees’ time is being charged to the correct programs and grants in accordance with approved budgets. The human resource manager will prepare a payroll action form that will list available and applicable funding sources to cover the payroll expenses of an employee. The independent payroll contractor will maintain payroll action notices (PAN) for employees who are covered by multiple funding sources or funding sources other than general fund. In addition, she would update payroll distribution coding in the accounting software to match PAN. She would also match coding on timesheets with coding on PAN and in the accounting software. In case of a discrepancy, she would reach out to a business manager and/or a grant manager on how to resolve it. The Superintendent will review account coding each payroll while performing a review of the payroll check register. In addition, budgeted account codes will be compared to the actual codes being used in payroll on a periodic basis. Proposed Completion Date: Implemented July 1, 2024

Categories

Allowable Costs / Cost Principles Reporting Significant Deficiency

Other Findings in this Audit

  • 508147 2024-004
    Significant Deficiency Repeat
  • 508148 2024-004
    Significant Deficiency Repeat
  • 508149 2024-005
    Significant Deficiency Repeat
  • 508150 2024-005
    Significant Deficiency Repeat
  • 508151 2024-005
    Significant Deficiency Repeat
  • 508153 2024-006
    Significant Deficiency
  • 508154 2024-006
    Significant Deficiency
  • 508155 2024-007
    Significant Deficiency
  • 508156 2024-007
    Significant Deficiency
  • 508157 2024-007
    Significant Deficiency
  • 508158 2024-005
    Significant Deficiency Repeat
  • 508159 2024-006
    Significant Deficiency
  • 508160 2024-007
    Significant Deficiency
  • 1084589 2024-004
    Significant Deficiency Repeat
  • 1084590 2024-004
    Significant Deficiency Repeat
  • 1084591 2024-005
    Significant Deficiency Repeat
  • 1084592 2024-005
    Significant Deficiency Repeat
  • 1084593 2024-005
    Significant Deficiency Repeat
  • 1084594 2024-006
    Significant Deficiency
  • 1084595 2024-006
    Significant Deficiency
  • 1084596 2024-006
    Significant Deficiency
  • 1084597 2024-007
    Significant Deficiency
  • 1084598 2024-007
    Significant Deficiency
  • 1084599 2024-007
    Significant Deficiency
  • 1084600 2024-005
    Significant Deficiency Repeat
  • 1084601 2024-006
    Significant Deficiency
  • 1084602 2024-007
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.299 Indian Education -- Special Programs for Indian Children $1.46M
84.425 Education Stabilization Fund $919,769
84.041 Impact Aid $379,397
84.010 Title I Grants to Local Educational Agencies $100,000
84.060 Indian Education Grants to Local Educational Agencies $75,933
84.371 Comprehensive Literacy Development $65,773
84.424 Student Support and Academic Enrichment Program $54,552
84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) $47,368
10.553 School Breakfast Program $22,118
10.555 National School Lunch Program $10,321
84.358 Rural Education $7,082
84.173 Special Education Preschool Grants $4,044
84.027 Special Education Grants to States $2,093