Finding 564770 (2024-005)

SIGNIFICANT DEFICIENCY 2024-005 Education Stabilization Fund – Activities Allowed or Unallowed and Allowable Costs and Cost Principles Criteria or specific requirement Expenditures should only be incurred for the program if they have been deemed to meet program allowability requirements, which includes ensuring that no improper payments are made, that payroll charges are supported by required documentation, and that the cost was necessary and reasonable for the performance of the federal award. Condition Of the 51 transactions tested, 9 were found to not meet elements of allowability. Context For 7 of the transactions, charges to the federal awards for salaries and wages were not accurately based on records that reflected the work performed. This improper payment also resulted in incorrect directly associated costs (payroll taxes) being charged to the federal award. The eighth transaction involved a payroll charge that did not have the required supporting documentation prepared. For the final transaction, an order was placed for numerous items that were all charged to the federal award, but two of those items were found to not meet the allowability standards. Cause Payments made to staff for summer school wages were calculated based upon planned work hours and scheduled days, and they were not adjusted when the actual hours worked differed from those calculations. Additionally, two timesheets were not summed correctly when determining the hours worked for the afterschool program. Lastly, expenditures were not carefully reviewed to ensure that all expenses were allowable and that all necessary supporting documentation had been prepared and kept on file. Effect Total questioned costs amounted to $1,979, and, when compared to the overall population, total likely questioned costs were calculated as $9,029. Recommendation The District should carefully review all charges to the federal award in order to ensure that sufficient supporting documentation has been obtained, that correct payments are being made, and that no unreasonable or unnecessary charges exist. Views of responsible officials and planned corrective actions See Corrective Action Plan.