Indirect rate on a portion of federal grant 84.027 Special Education (IDEA) Cluster funding.
a. Type of deficiency: Significant Deficiency
i Condition: The District’s controls did not detect and correct an improper indirect cost rate applied to the federal program on a timely basis. A significant deficiency in controls over compliance with allowable cost requirements was identified.
ii. Cause: The District changed from being a contractor to a subrecipient for the fiscal year ended June 30, 2024. This change resulted in a different allowable indirect cost rate.
iii. Effect or potential effect: Prior to correcting, the District had $878 of indirect charges in excess of the allowable rate charged to the federal program.
iv. Questioned costs: As the District corrected the error, there appears to be no remaining questioned costs.
v. Context: The District’s accounting system used an incorrect cost rate for indirect charges prior to correcting.
vi. Recommendation : The District should ensure that controls related to indirect cost charges are implemented and operating effectively.
b. Plan of acti on: The Grant Manager will be directed to create sufficient internal controls to confirm indirect rates in the accounting system match grant award agreements.
c. Date of implementation: November 27, 2024