Finding 553799 (2024-001)

2024-001 Lack of Documentation to Support Distribution of Wages (Significant Deficiency) Federal Agency: Department of Education Pass-through Agency: New Hampshire Department of Education Cluster/Program: COVID – 19 Education Stabilization Fund Assistance Listing Numbers: 84.425D/84.425U Passed-through Identification: #20220358 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Internal Control over Compliance – Significant Deficiency Material Noncompliance Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the District, as a recipient of Federal funds, must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, under 2 CFR 200.430, it states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must (1) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, (2) be incorporated into the official records of the non-Federal entity, (3) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, and (4) support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award or a federal award and non-Federal award. Condition: During our review of payroll charged to the ESSER III (#20220358) grant it was noted the district gave out retention bonuses to all staff working at Haverhill Cooperative School District. Although a record of bonus recipients was maintained, it was not formally approved by the Superintendent and/or the School Board. Cause: Administrative oversight. Effect: The District did not have adequate documentation to support the distribution of the employee’s wages paid using grant funds. Questioned Costs: $33,557 Repeat Finding: No Recommendation: We recommend that if the district chooses to maintain a master spreadsheet for stipends or retention bonuses, the list should be formally reviewed and approved by both the School Board and the Superintendent. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.