Finding 555600 (2024-002)

Finding Number: 2024-002 Federal Program: Education Stabilization Fund: COVID-19 – ARP ESSER Federal Award Identification Number and Year: N/A, 2023 and 2024 Assistance Listing Number (ALN): 84.425U Federal Awarding Agency: U.S. Department of Education Compliance Requirement: Allowable Activities, Allowable Costs/Cost Principles Pass-through Entity: Ohio Department of Education and Workforce Repeat Finding: No Significant Deficiency and Noncompliance Criteria: Federal regulation (2 CFR 200.303(a)) requires that non-federal entities 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. Condition: The School had unallowable activities and unallowable costs charged to the grant related to sales tax, of which the School is tax exempt. Questioned Costs: Total of $18,753. Identification of How Questioned Costs Were Computed: Total known questioned costs of $4,332, and total projection of $14,421 for a total of $18,753. Context: In testing ARP ESSER nonpayroll costs, it was noted that the School charged a vendor quote to the grant, which included sales tax of $3,834, instead of charging the actual invoice amount paid to the vendor. For another testing selection, there was also an additional $498 of sales tax charged to the grant. Cause and Effect: The School did not have internal controls in place to ensure that only allowable costs are charged to federal grants. As a result, the School charged unallowable expenses to the grant. Recommendation: We recommend the School review the federal award allowable uses and implement a process to ensure that costs are allowable prior to payment. Failure to comply with the federal award allowable uses could lead to noncompliance and future questioned costs. Views of Responsible Officials: See the Corrective Action Plan.