Finding 519402 (2023-001)

FA 2023-001 Improve Controls over Financial Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 – Title I Grants to Local Educational Agencies Federal Award Number: S010A210010-21A (Year: 2022), S010A220010 (Year: 2023) Questioned Costs: None Identified Description: The School District did not file accurate completion reports for Title I Grants to Local Educational Agencies program. Background Information: The Georgia Department of Education (GaDOE) requires the School District to submit a completion report by October 30 after the 15-month period of performance associated with the Title I Grants to Local Educational Agencies (Title I) program ends. These completion reports are filed through the Grants Application section of the MyGaDOE webportal and reflect budgeted and actual expenditure information for the Title I program for the reporting period. If the total expenditures reflected on the completion report are more than the Title I program funds received by the School District for the grant period, a DE-0147 – Request for Reimbursement of Monthly Cash Disbursements will be automatically generated and the additional funds due to the School District will be disbursed appropriately. Conversely, if the total funds received for the grant period exceed the total expenditures reflected on the completion report, the Grants Application will prompt the School District to enter a check number for the required refund of excess funds drawn down. Therefore, it is imperative that completion reports are filed by the School District in an accurate and timely manner. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.302(a) state in part that “the non-Federal entity’s financial management systems must… be sufficient to permit the preparation of reports required by general and program-specific terms and conditions.” In addition, provisions included in the Uniform Guidance, Section 200.302(b)(2) state in part that the non-federal entity’s financial management system must provide for “accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements.” Condition: A review of the School District’s accounting records and the completion reports related to the Title I program revealed the following deficiencies: 1. The Title I-A, Improving the Academic Achievement of the Disadvantaged completion report for the period July 1, 2022 through June 30, 2023 was under reported by $79,636. 2. The Title I-A, Improving the Academic Achievement of the Disadvantaged completion report for the period July 1, 2023 through September 30, 2023 was over reported by $390. 3. The Title I-A, School Improvement completion report for the period July 1, 2022 through June 30, 2023 was under reported by $4,571. 4. The Title I-A, School Improvement completion report for the period July 1, 2023 through September 30, 2023 was under reported by $32. Cause: Due to high turnover within the School District finance department and lack of strong procedures and controls, the School District had a deficiency in oversight of federal programs and reviews. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. Failure to accurately report federal award expenditures through the completion report process could lead to the filing of DE-0147 reimbursement requests with GaDOE that do not support actual expenditures. Therefore, the School District may obtain more or less federal funding than they were eligible to receive. Recommendation: The School District should establish procedures to ensure that completion reports submitted to GaDOE are supported by the accounting records and reimbursement requests are prepared based upon actual expenditures incurred. In addition, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.