Finding 529306 (2024-102)

REFERENCE: 2024-102 CFDA NUMBER 84.367 – IMPROVING TEACHER QUALITY U.S. DEPARTMENT OF EDUCATION – 2023 PASSED THROUGH ARIZONA STATE DEPARTMENT OF EDUCATION GRANT NUMBER: S367A220049 QUESTIONED COSTS $28,100 CONDITION A fiscal monitoring completed by the Arizona Department of Education in December 2024, covering fiscal year 2023, reported $28,100 in unallowable costs for therapeutic services, not outlined in the approved grant budget, and that the School is required to repay. CRITERIA In accordance with Title 2 of the Code of Federal Regulations, Subtitle A Office of Management and Budget Guidance for Grants and Agreements, Chapter II Office of Management and Budget Guidance, Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart E -Cost Principles 200.403 Factors Affecting Allowability of Costs, except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: a. Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b. Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c. Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the recipient or subrecipient. d. Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e. Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f. Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). g. Be adequately documented. See also §§ 200.300 through 200.309 of this part. h. Administrative closeout costs may be incurred until the due date of the final report(s). If incurred, these costs must be liquidated prior to the due date of the final report(s) and charged to the final budget period of the award unless otherwise specified by the Federal agency. All other costs must be incurred during the approved budget period. At its discretion, the Federal agency is authorized to waive prior written approvals to carry forward unobligated balances to subsequent budget periods. See § 200.308(g)(3). In accordance with OMB Compliance Supplement, Part 6 – Internal Control, non-Federal entities receiving Federal awards establish and maintain internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. EFFECT Program requirements were not complied with. The School did not maintain adequate documentation of all costs charged to the federal program. CAUSE Internal controls were not designed appropriately to ensure that all charges to the federal grant were allowable. RECOMMENDATION AND BENEFIT A control system should be developed and implemented to ensure that documentation of all purchases charged to a federal program include only allowable costs and that the costs are included in the grant applications. Any reviews should be documented. This will help ensure that program requirements are complied. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.