Finding 576992 (2023-002)

-
Requirement
A
Questioned Costs
$1
Year
2023
Accepted
2023-10-24
Audit: 1084
Organization: Onaway Area Community Schools (MI)

AI Summary

  • Core Issue: Incorrect funding source codes were used for various expenditures, leading to discrepancies between trial balances and Final Expenditure Reports (FERs).
  • Impacted Requirements: The accuracy of accounting information submitted to the Michigan Department of Education is compromised, affecting compliance with audit standards.
  • Recommended Follow-Up: Management should verify transaction coding, document it on invoices, and compare trial balances to grant draws and approved applications before finalizing reports.

Finding Text

Condition and Criteria: The Michigan Department of Education (MDE) Audit Manual requires that the accounting information submitted to the MDE, which would include the Financial Information Database (FID) and Final Expenditure Report (FER), be accurate and true representations of the expenditures for each project, by funding source code. During the audit, we found multiple areas where incorrect funding source codes were used for various expenditures. While we noted no material overages in amounts charged to grants after completion of the FERs, we did note discrepancies between the ending trial balances and the FERs. In addition, we found that those charges included in the District's trial balance were not always compared back to the approved grant applications. Effect: The District had multiple adjusting journal entries that had to be recorded after year end to correctly report the various grant activities, which identified errors in what was reported in year end FER's, resulting in small overages in what was claimed. Cause: Expenditures by grant code are not consistently matched against the amounts being claimed or against the approved grant applications, as well as against the Final Expenditure Reports when submitted. Context: During the audit, we found multiple areas where incorrect funding source codes were used for various expenditures, which in turn caused errors between ending balances and the FERs that were submitted. In addition, we found that those charges included in the District's trial balance were not always compared back to the approved grant applications. Questioned Costs: $1,730 - ESSER II Summer Programing; $1,099 - ESSER II - Before and After School Programs; $2,885 - GEER II Teamer & Support Staff Payments. Auditors' Recommendation: We recommend that management continue verifying the accuracy of the coding of each transaction, documenting such coding on each invoice, and that management then compare the trial balance to the individual grant draws, each time a draw is made, prior to completing the trial balance for the audit, and prior to completing the annual FER. In addition, we recommend that when coding the transactions, management compare each transaction to the applicable approved grant application. Views of Responsible Officials and Planned Corrective Actions: The District understands the issue and will begin comparing each transaction to the approved grant application and to ensure proper coding and allowability in all areas.

Categories

Questioned Costs

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund $829,564
84.010 Title I Grants to Local Educational Agencies $165,925
10.553 School Breakfast Program $105,568
84.358 Rural Education $54,727
84.367 Improving Teacher Quality State Grants $33,153
93.575 Child Care and Development Block Grant $27,650
10.555 National School Lunch Program $24,104
84.424 Student Support and Academic Enrichment Program $14,657
10.559 Summer Food Service Program for Children $1,868
10.649 Pandemic Ebt Administrative Costs $628