Finding Text
Condition and Criteria: The Michigan Department of Education’s Auditing Manual requires that all monies are not requested until after the expenses have been incurred as well as after actual disbursement of those funds. At year end, the District drew down more funds than were actually disbursed, including accruals and encumbrances in the final draw. Effect: The District received more grant dollars from the Michigan Department of Education than they had disbursed. Cause: The District did not realize the requirement to not draw down the funds until physically disbursed. Context: At year end, the District drew down more funds than were actually disbursed, including accruals and encumbrances in the final draw. However, the encumbrances drawn were subsequently reduced back out of the District's expenditures, with additional expenditures that were not previously coded to the correct funding source code, being added back to each grant, resulting in no remaining questioned costs. In addition, the accruals were subsequently disbursed, resulting in no excess funds being drawn as of the date of the audit report. Questioned Costs: None. Auditors' Recommendation: We recommend that the District ensure that only disbursed funds are included in their draws at year end, at that the final draw, including accrued payroll, not be drawn until after the last pay in August each year. Views of Responsible Officials and Planned Corrective Actions: The District understands the issue and will make sure to only draw disbursed funds moving forward.