Finding Text
US Department of Education
Program Title: Education Stabilization Fund
CFDA Number(s): 84.425C, 84.425D, 84.425U, 84.425W
Federal Award Number: 201201-2122, 213712-2021, 213742-2122,213713-2122 & 2223 (COVID-19)
Federal Award Year: July 1, 2022 to June 30, 2023
Pass-Through Entity: Passed-Through Michigan Department of Education
Type of Compliance: Significant Deficiency (Activities Allowed/Unallowed and Allowable Costs)
Criteria: The OMB requires that recipients of federal funds report deviations from the approved budget and request approvals from Federal awarding agencies for any revisions [2 CFR Part 200.308(b)].
Condition: The District submitted a final expenditure report to the State where certain line-item expenditures were reported in such a way that caused the report to appear over budget by greater than 10%.
Cause: This condition was the result of the lack of oversight by appropriate personnel to review the final expenditure report before it was submitted to the State.
Effect: As a result of this condition, the District did not fully comply with the budgeting requirement of expenditures being within 10% of the approved budget due to reporting expenditures in the wrong areas on the final expenditure report.
Questioned Costs: None
Perspective Information: The incident at hand appears to be an isolated instance as the business manager position has been turned over 3 times in the past 3 years. The District’s general ledger had expenditures that were properly spent in accordance with the approved budget and correctly classified in the general ledger, however, the District simply reported the wrong numbers on the Final Expenditure Report for certain Activities and Objects, but the correct amounts were spent in accordance with the approved budget. All of final expenditure report submissions after the incident did not have this same problem and were reported accurately.
Recommendation: We recommend the District have appropriate personnel review the final expenditure report before final submission to the State.
Views of Responsible Officials: There is a new business manager responsible for any future final expenditure report submissions. They will closely monitor this situation going forward to avoid this from happening in the future.