Finding Text
Other Matter – Non-Major Federal Award Program
2024-002. Questioned Costs
United States of Department of Education, Passed Through New York State, Department of Education:
Special Education Cluster
Special Education Grants to States: IDEA Part B ALN: 84.027
Pass-through Entity Number: 0032-23-0415
Criteria: Pursuant to Federal regulations 2 CFR §200.344(e), a subrecipient of a Federal award must promptly refund any unobligated funds that the Federal agency or pass-through entity paid that are not authorized to be retained.
Condition: The District received total reimbursement for its 2022-2023 IDEA, Part B (Section 611) Federal grant award that exceeded the program’s final total expenditures, but did not notify the pass-through entity of the overpayment to refund the overpayment.
Cause: Some of the amounts reported in the District’s final expenditure report (Form FS-10F) submitted to the pass-through entity, the New York State Education Department (NYSED), for its 2022-2023 IDEA, Part B (Section 611) grant award were for accrued expenditures based on open encumbrances that did not materialize. The District’s Business Office adjusted the records in their accounting system but neglected to contact the pass-through entity for instructions to submit a corrected final expenditure report and refund the overpaid reimbursement.
Effect: The failure to notify the pass-through entity of unentitled Federal grant monies and promptly refund unentitled monies is noncompliant with Federal regulations and could affect amounts of future grant awards or their approval.
Questioned Costs: $60,184.
Context: On its revised Form FS-10F final expenditure report for the 2022-23 IDEA, Part B Section 611 grant award, which was submitted to the NYSED on March 6, 2024, the District reported amounts for three vendors totaling $62,199 that were recorded as accounts payable based on open encumbrances. Subsequently, in October 2024, the District determined that only $2,015 for one vendor was a valid expenditure and outstanding accounts payable, and adjusted its accounting records for the year ended June 30, 2024, while the external audit of its annual financial statements was under way. The District did not contact the NYSED about the invalid expenditures claimed on its Form FS-10F final expenditure report.
Identification of a Repeat Finding: This is not a repeat finding from the immediately prior audit.
Recommendation: The District should notify the NYSED of the overpayment and obtain instructions for how to refund the overpayment. The District should also implement procedures to ensure discrepancies between amounts reported in final expenditure reports and accounting records are reconciled and corrected final reports are submitted to the NYSED timely.
Views of Responsible Officials of Auditee: The District agrees with the finding. The District’s Assistant Business Administrator will contact the NYSED and submit a corrected final expenditure report, and begin the overpayment refund process.