Finding 575156 (2024-001)

Finding 2024-001 – Special Education Cluster – AL No.’s 84.027 & 84.173 Department of Education Massachusetts Department of Elementary and Secondary Education Noncompliance and Significant Deficiency Related to Internal Control over Compliance of the Major Program Criteria: Expenditures charged to the Special Education Cluster major program must be within the period of availability of the individual grants that are part of the major program cluster. The Period of Availability for the SPED PL 94-142 Grant was October 2, 2023 through September 30, 2025, ARPA IDEA September 29, 2021 through September 30, 2023, 21st Century Enhanced Programs for Students with IEP’s September 1, 2023 through August 31, 2024, and 21st Century Community Learning September 1, 2023 through June 30, 2024. Condition: During our test of controls over compliance it was noted that there are expenditures charged to these various programs, the SPED PL 94-142 Grant was October 2, 2023 through September 30, 2025, ARPA IDEA September 29, 2021 through September 30, 2023, 21st Century Enhanced Programs for Students with IEP’s September 1, 2023 through August 31, 2024, and 21st Century Community Learning September 1, 2023 through June 30, 2024 that are for services outside of the period of availability as set forth by the Massachusetts Department of Elementary and Secondary Education. Context: During our test of expenditures and the review of the general ledger we noted the follow: • SPED PL 94-142 Grant as it is related to compliance it was noted that 3 vendor invoices charged to the grant were for services prior to the grant start date of October 2, 2023 and thus would be outside the period of performance and thus would not be allowable costs. • ARPA IDEA Grant as it is related to compliance it was noted that 1 vendor invoice charged to the grant was for 11 months of service that extended beyond the grant end date of September 30, 2023 and thus would be outside the period of performance and thus would not be allowable costs. • 21st Century Enhanced Programs for Students with IEP’s Grant as it is related to compliance it was noted that 1 payroll transaction charged to the grant was for services prior to the grant start date of September 1, 2023, and thus would be outside the period of performance and thus would not be allowable costs. • 21st Century Community Learning Grant as it is related to compliance it was noted that 3 payroll transaction charged to the grant were for services prior to the grant start date of September 1, 2023 and thus would be outside the period of performance and thus would not be allowable costs. Effect: The School District was not in compliance with the period of availability requirement as set forth by the Massachusetts Department of Elementary and Secondary Education. Questioned Costs: Questioned costs for the expenses (payroll and vendor) charged to the major program that are outside the period of availability was $24,840.55. Identifies as a Repeat Finding: N/A Cause: The absence of a Director of Finance and Operations led to a lack of centralized oversight for grant expenditures. As a result, submissions were not consistently reviewed for compliance with grant award timelines and allowable use criteria. Recommendation: We recommend the School District follow procedures to ensure that expenditures charged to the grants are within the period of performance as set forth by the Massachusetts Department of Elementary and Secondary Education. Managements Response: 1. Hiring of Key Personnel: In April 2024, the district hired a new Director of Finance and Operations, who now oversees all financial and grant-related activities to ensure full compliance with state and federal requirements. 2. Reinforced Review Procedures: All grant expenditures must now be submitted through a centralized review process, which includes validation of budget alignment and period of availability before approval. 3. Staff Training: All staff responsible for grant management have completed training on federal and state grant compliance requirements, including proper expenditure coding and allowable use of funds. 4. Internal Monitoring: Monthly reviews of all active grants are now conducted by the Business Office to identify and correct any discrepancies proactively. Expected Outcome: These corrective actions will ensure that all grant expenditures are compliant with award requirements and period of availability. The presence of a qualified Director of Finance and Operations and the implementation of new procedures will prevent recurrence of this issue in future fiscal years.