Finding 544 (2023-001)

-
Requirement
B
Questioned Costs
$1
Year
2023
Accepted
2023-10-24
Audit: 1068
Organization: Tawas Area Schools (MI)

AI Summary

  • Core Issue: The District paid for a six-year Subscription-Based Information Technology Arrangement (SBITA) using ESSER funds, which extends beyond the allowable four-year period.
  • Impacted Requirements: Funds must revert to the U.S. Treasury four years after obligation deadlines, and the District needs prior approval from the Michigan Department of Education for any extensions.
  • Recommended Follow-Up: Seek immediate clarification from MDE regarding the extension and assess the potential need to reimburse unallowable costs incurred for the SBITA agreement.

Finding Text

Condition and Criteria: According to the United States Department of Education's (USDE) Elementary and Secondary School Emergency Relief Programs and Governor's Emergency Education Relief Programs Frequently Asked Questions document, updated on December 7, 2022, "under limited circumstances, it may be allowable for ESSER, GEER, or EANS-funded activities to continue after the obligation and liquidation period". However, "under no circumstances may the services extend beyond the date on which the funds revert to the U.S. Department of Treasury (31 USC § 1552), which occurs four years after the obligation deadlines", which for the above-named grant, would be September 30, 2028. In the current year, the District paid in advance for six years of a new Subscription-Based Information Technology Arrangement (SBITA) out of the ESSER grant funds, that will run through June 30, 2029, nine months past the four year cutoff. In addition, the District has not yet obtained an approval from the Michigan Department of Education (MDE) for the four-year extension. Effect: The District drew the entire cost of the six-year SBITA agreement, including the portion that falls outside of the allowable grant period under the above mentioned exception. Cause: The District did not realize that the SBITA agreement extending past the four-year window would be considered unallowable, nor did they realize that they needed to obtain MDE approval prior to drawing the additional four years. Context: In the current year, the District paid in advance for six years of a new Subscription-Based Information Technology Arrangement (SBITA) out of the ESSER grant funds, that will run through June 30, 2029. This includes nine months of SBITA services past the four year cutoff allowed with those ESSER funds. In addition, the District has not yet obtained an approval from MDE for the four-year extension. Context: In the current year, the District paid in advance for six years of a new Subscription-Based Information Technology Arrangement (SBITA) out of the ESSER grant funds, that will run through June 30, 2029. This includes nine months of SBITA services past the four year cutoff allowed with those ESSER funds. In addition, the District has not yet obtained an approval from MDE for the four-year extension.

Corrective Action Plan

The District understands the issue and will reclassify the excess expenses charged to the ESSER grant and include/incur other allowable expenses in those charged to the grant.

Categories

Questioned Costs Allowable Costs / Cost Principles

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund $943,400
84.010 Title I Grants to Local Educational Agencies $332,725
10.553 School Breakfast Program $103,776
10.555 National School Lunch Program $65,148
84.367 Improving Teacher Quality State Grants $21,551
84.424 Student Support and Academic Enrichment Program $18,756
10.665 Schools and Roads - Grants to States $7,711
93.778 Medical Assistance Program $1,073
10.649 Pandemic Ebt Administrative Costs $628