Finding 562087 (2024-001)

U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES - AL NUMBER 84.010A PASS-THROUGH NUMBER 5102 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 2024-001. Allowable Costs/Cost Principles Criteria or specific requirement: Office of Management and Budget (OMB) 2 CFR part 200, subpart E - Cost Principles, establishes principles for determining the allowable costs incurred by the District under federal funds. Such costs are to be necessary and reasonable for the performance of the federal award. Condition: During our test of payroll expenditures, we identified $34,015 in salary and fringe benefits paid from the Title I program for a non-Title I certified teaching position. The employee was previously in a Title I position and reassigned to a non-Title I position for the 2024 fiscal year, and the District continued to pay the employee from the TItle I program. Cause: Lack of internal controls and management oversight over program expenditures. Effect: Unallowable costs of $27,750 (gross salary) and $6,265 (fringe benefits) were paid from the Title I program. Questioned costs: The total amount of questioned cost was $34,015. Context: A test of Title I salary expenditures for 3 employees ($56,592) from a population of 26 employees ($280,839). Identification as a repeat finding: No Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The District has instituted an internal control to ensure employee payroll coding is reviewed year-to-year as program changes are made.