Finding Text
Finding 2023-002, 2022-002: Reporting - Chart of Accounts
Program Name: Title I Grants to Local Educational Agencies – Assistance Listing 84.010 & Education Stabilization Fund – Assistance Listing 84.425C, 84.425D, 84.425U
Awarding Agency: U.S. Department of Education, passed through Michigan Department of Education
Finding Type: Material Weakness on Internal Controls over Compliance and Material Noncompliance
Questioned Cost Amount: None
Context / Criteria: Transactions need to be recorded based on the Michigan School Accounting Manual. The manual has the appropriate account classification with regard to account code dimensions (fund, function, major class, and object code).
Condition: During our review of revenue and expenditures, we noted transactions are not being recorded to the appropriate revenue and expense accounts based on the Michigan School Accounting Manual for function, major class and
object code. These inconsistencies could have affected the filing of Federal Expenditure Reports and caused
budget-to-actual differences that could have been undetected by management.
Cause / Effect: The School District did not have adequate controls in place to ensure transactions were being recorded to the proper accounts based on function, major class, and object code. The lack of consistency caused unnecessary variations between the accounting records and required reporting for final expenditure reports.
Recommendation: We recommend the School District review the Michigan School Accounting Manual and follow the guidelines for recording transaction with appropriate account classifications.
Views of Responsible Officials and Corrective Actions: Management agrees with the finding. See accompanying Corrective Action Plan.