Finding Text
Finding #2024-006; Education Stabilization Fund – CFDA No. 84.425; Year Ended June 30, 2024
CONDITION:
An audit adjustment was necessary to remove 2024-25 ESSER expenditures from the 2023-24 fiscal year.
CRITERIA:
Internal controls should be in place to ensure that allowable costs under Federal awards are determined in accordance with generally accepted accounting principles (GAAP). (See Finding #2024-003 in the Compliance section.)
CAUSE:
The cause of the lack of controls is primarily due to a lack of segregation of duties, as noted in Finding #2024-002 in Section II – Internal Control Over Financial Reporting. Ultimately, with limited staff in the business office and one of those members being new, the necessary monitoring and review procedures are lacking which leads to errors going undetected.
EFFECT:
The effect is that the internal controls over grant expenditures are not functioning as designed and the payment of expenditures based on quotes rather than invoices was permitted.
RECOMMENDATION:
We recommend that procedures be modified and internal controls followed to ensure that payments based on quotes are prohibited. The business office staff should be involved in the cash/accounts payable function and should understand proper accounting principles. When an error is discovered, the business manager should be notified and the error documented and corrected in a timely manner. Effective controls should include a two-person monitoring of cash/accounts payable.
MANAGEMENT RESPONSE:
Management agrees with the recommendations. The procedures in the business office will be modified and internal controls followed to ensure that payments based on quotes are prohibited. The business office staff will be more involved in the cash/accounts payable function and will be educated on proper accounting principles. If an error is discovered by the staff, the business manager will be notified and the error documented and corrected in a timely manner. Controls will include a two-person monitoring of cash/accounts payable.