Finding 519747 (2024-006)

-
Requirement
B
Questioned Costs
-
Year
2024
Accepted
2025-01-20
Audit: 338862
Organization: Independent School District 695 (MN)
Auditor: Sterle & CO LTD

AI Summary

  • Core Issue: The District did not provide timely documentation for federal expenditures, leading to a required repayment of $236,260 for the previous fiscal year.
  • Impacted Requirements: The District must adhere to approved budgets and obtain timely approval for any budget amendments related to federal programs.
  • Recommended Follow-Up: Review all federal expenditures against approved budgets and establish procedures for timely submission of any necessary modifications to the oversight agency.

Finding Text

Inadequate documentation for federal expenditures Condition: The District failed to timely provide adequate documentation as to compliance with capital budgets in a federal program resulting in a repayment of funds expended in the previous fiscal year. Criteria: The district has an approved budget for federal programming and must obtain approval for any budget amendments in a timely manner. Certain capital expenditures require approval prior to purchasing through application and budget process. Cause: The District failed to timely request and receive a budget amendment for a federal program during the presribed time period. Effect: During the current fiscal year, the Minnesota Department of Education (MDE) required the District to repay federal funds expended in the previous year for specific capital items since the budget amendment was not timely submitted by the District. MDE subsequently reallocated those program funds back to the District and approved for District use in the current fiscal year. This was material to the District's federal funds and required material adjustments to the financial statements and a reconcilding variance to the Schedule of Expenditures of Federal Awards (SEFA). The total amount reallocated to the current fiscal year was $236,260 for this program. Recommendation: The District review all federal expenditures recorded in UFARS against the approved budgets. If modifications are required from the original application, the District should implement procedures to submit the proposed modifications to the oversight agency in a timely manner. Views of Responsible Officials and Planned Corrective Actions: The District acknowledges the instance and determined it to be an isolated instance due to staff turnover in the business office. The District has hired additional business office staff. Repeat Finding: No

Corrective Action Plan

Inadequate Documentation for Federal Expenitures Actions Planned - The District feels that this was an isolated instance due to turnover of staff and has since hired addional business office staff. However, additional controls are set related to allocation of federal programming including frequent budget versus actual reconcilation and timely compliance with any amendments or approvals required if there is deemed to be a necessary change to budget. Official responsible - Business Manager and Superintendent of Schools. Planned Completion Date - December 30, 2024 Disagreements with Finding - None - ISD 695 Chisholm concurs with the finding. Plan to Monitor - The District will monitor and reconcile federal programming budgets monthly. The Business Manager will meet with the Superintendent and/or other program managers as necessary to review budgets and expenditures to ensure compliance with the federal programs. Request for reimbursement and receipting will be completed by the Business Manager with oversight by the Superintendent.

Categories

Reporting

Other Findings in this Audit

  • 519744 2024-002
    Significant Deficiency Repeat
  • 519745 2024-001
    Material Weakness
  • 519746 2024-002
    Significant Deficiency Repeat
  • 519748 2024-001
    Material Weakness
  • 519749 2024-002
    Significant Deficiency Repeat
  • 519750 2024-006
    -
  • 1096186 2024-002
    Significant Deficiency Repeat
  • 1096187 2024-001
    Material Weakness
  • 1096188 2024-002
    Significant Deficiency Repeat
  • 1096189 2024-006
    -
  • 1096190 2024-001
    Material Weakness
  • 1096191 2024-002
    Significant Deficiency Repeat
  • 1096192 2024-006
    -

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund $238,324
84.010 Title I Grants to Local Educational Agencies $209,810
21.027 Coronavirus State and Local Fiscal Recovery Funds $118,055
84.027 Special Education Grants to States $74,307
10.553 School Breakfast Program $58,192
10.559 Summer Food Service Program for Children $21,656
84.173 Special Education Preschool Grants $3,176
84.424 Student Support and Academic Enrichment Program $2,607
10.555 National School Lunch Program $1,398
10.649 Pandemic Ebt Administrative Costs $653