During the audit of the 2023-2024 school year, it was determined that the expenditures reported for the 2022-2023 fiscal year did not align with the expenses recorded and reported on the Schedule of Expenditures of Federal Awards (SEFA).
Cause:
The discrepancy appears to be a result of coding errors or weaknesses in internal controls over the financial reporting process.
Corrective Action Plan:
1. Review and Reconciliation Process Improvement
- Implement a standardized reconciliation process to ensure that all expenditures reported in federal grant filings match the SEFA and general ledger records.
- The reconciliation process will be conducted monthly to ensure expenditures are accurately recorded and categorized.
2. Independent Review of Reports
- Assign an independent reviewer, separate from the preparer, to verify the accuracy of all grant-related reports before submission.
- This reviewer will cross-check expenditures with SEFA, general ledger records, and supporting documentation to ensure consistency and compliance.
3. Enhanced Internal Controls
- Develop and document a formalized grant reporting procedure that includes clear steps for expenditure tracking, coding, and verification.
- Require dual sign-off on all grant expenditure reports before submission to the Pennsylvania Department of Education.
4. Staff Training and Accountability
- Provide targeted training to finance and grants management personnel on proper coding procedures and federal grant compliance requirements.
- Conduct annual refresher training to reinforce best practices in financial reporting and compliance.
5. Regular Monitoring and Audits
- Conduct quarterly internal audits of grant expenditures to proactively identify and correct any discrepancies before external audits.
- Establish a compliance checklist to ensure all reporting aligns with federal and state requirements.
6. Follow-Up and Monitoring:
- A follow-up review will be conducted after the next reporting cycle to assess the effectiveness of corrective actions and ensure compliance.
By implementing these corrective measures, the District aims to strengthen internal controls, improve reporting accuracy, and ensure compliance with federal grant requirements.