Finding Text
Finding No.: 2022-009
Federal Agency: U.S. Department of Education (ED)
AL Program: 84.425 Education Stabilization Fund
ED Subprogram: 84.425X American Rescue Plan – State Agency Educational Agency
(Outlying Areas) (ARP-OA SEA)
Federal Award No.: COVID-19 S425X210003
Area: Activities Allowed or Unallowed
Questioned Costs: $0
Criteria:
In accordance with applicable activities allowed or unallowed requirements, the Outlying Areas
must ensure that expenditures under ARP-OA-SEA are consistent with the grant conditions,
including U.S. Department of Education’s approval to charge school-based utilities only for the
period from August 2021 through May 2022 and July 2022 through September 2023.
Conditions:
For one (or 3%) out of 33 transactions tested, aggregating $20.1 million of $68.8 million in total
non-payroll Program expenditures, utility costs for the month of June 2022 were charged to the
Program. No grantor approval for June 2022 was provided.
Cause:
GDOE did not enforce monitoring controls over compliance with applicable activities allowed or
unallowed requirements.
Effect:
GDOE is in noncompliance with applicable activities allowed or unallowed requirements. No
questioned cost is reported because subsequently on September 22, 2023, GDOE obtained an email
confirmation from a U.S. ED Education Program Specialist, confirming that “the power and water
expenditures GDOE incurred…is [sic] an allowable expense for ESF II-SEA” (i.e., ALN
84.425A). GDOE subsequently provided journal entries JNL 34 and JNL 40, transferring the
utilities expenditures from ALN 84.425X to ALN 84.425A.
Identified as a Repeat Finding: 2021-003
Recommendation:
Responsible personnel should enforce monitoring controls over compliance with applicable
activities allowed or unallowed requirements. Prior to charging costs to a Federal award,
responsible personnel should verify that the cost is consistent with specific grantor approvals.
Views of Responsible Officials:
The GDOE disagrees with the finding. Utilities (power and water) are an allowable cost allowing
the maximization for a safe return of students to the classroom, and necessary for continued
operation and promoting handwashing techniques to prepare, prevent, and respond to COVID-19.
USEd FAQ B-10 specifically states that "Generally, ESF-SEA or ESF Governor funds may be
used to support activities that are necessary to maintain the operation and continuity of services in
the SEA or LEA as schools and students recover from the pandemic.” Additionally, GDOE sought
grantor approval and USEd approved the allowability of utility expense under the ARP, and more
recently deemed the transfer of utility costs from the ARP to ESF as an allowable expense.
Auditor Response:
Grantor approval of the utility costs for June 2022 was not on file, whereas grantor approval was
obtained specifically for all other months in FY 2022. Further, we acknowledge that US ED
deemed utility costs allowable under ALN 84.425A ESF-SEA; however, this finding is for utility
costs initially charged to ALN 84.425X ARP-OA SEA as of September 30, 2022.