Finding Text
U.S. DEPARTMENT OF EDUCATION
PASSED THROUGH THE ARKANSAS DEPARTMENT OF EDUCATION
COVID-19 AMERICAN RESCUE PLAN - ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL# 84.425U
PASS-THROUGH NUMBER 3105
AUDIT PERIOD - YEAR ENDED JUNE 30, 2024
Criteria or specific requirement: Office of Management and Budget (OMB) 2 CFR section 200.502 states the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. OMB 2 CFR section 200.344(b) requires that a non-federal entity must liquidate all financial obligations incurred under the federal award no later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the federal award unless the federal awarding agency or pass-through entity authorizes an extension. American Rescue Plan - Elementary and Secondary Emergency Relief Funds must be obligated by September 30, 2024 and liquidated by January 28, 2025.
Condition: The District issued two checks totaling $282,435 for the purchase of two buses on June 25, 2024 and held the checks awaiting delivery of the buses. The District reported the expenditures prior to being incurred and received federal reimbursement from the Education Stabilization Fund of $282,435. The District took possession of the buses and gave the payments to the vendor on February 5, 2025. The federal funds were not obligated or liquidated during the Education Stabilization Fund's period of performance.
Cause: Lack of management oversight and adherence to program requirements.
Effect or potential effect: $282,435 was reimbursed without an expenditure being incurred.
Questioned costs: $282,435
Context: Identified during review of bank reconciliations in the financial statement audit. The program was not audited as a major federal program.
Identification as a repeat finding: No
Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education for guidance regarding this matter.
Views of responsible officials: DESE has informed us that if this situation ever comes up in the future, asking for a federal extension if buses were not going to be delivered in a timely manner (by January 10, 2025). The manufacturer assured us that the buses would be delivered by November 4, 2024 so we didn’t ask for the extension. In the future, we will wait until buses are on site to write checks. We do not anticipate any ESSER ARP money to be issued in the near future.