Finding Text
Criteria: The Board must obtain prior approval before expending federal funding for construction projects as referenced in 34 CFR section 76.600.
Condition: Our audit revealed a material weakness concerning unallowable expenditures related to a project funded by a federal grant that lacked the required prior written approval. During our review of the 2024 oversight monitoring report, we found an instance where prior approval was not obtained for a project involving federal funds in fiscal year 2024.
Questioned Costs: The Board was found noncompliant in their annual monitoring by the Department of Education in the amount of $37,740.12 for two checks on a construction project that lacked required prior written approval and also overcharged indirect costs by $5,627.18 relating to this project.
Effect: Failure to obtain prior approval for projects involving federal funds can increase the risk of fraud, result in financial statement misstatements, and expenditures that are not for an allowable activity.
Cause: Improper controls over prior approvals of projects.
Recommendation: We recommend the Board ensure it obtains all required prior approvals for all projects involving federal funds.