Finding Text
Finding Type. Immaterial Noncompliance/Material Weakness in Internal Controls over Compliance (Allowable Costs/Cost Principles).
Program. Education Stabilization Fund; U.S. Department of Education; Assistance Listing Number 84.425; Passed through Michigan Department of Education (MDE); Project numbers 213782-2223 and 213713-2122.
Criteria. Section 200.431(g) of the Uniform Grant Guidance states that; Pension plan costs which are incurred in accordance with the established policies of the non-Federal entity are allowable, provided that: (1) Such policies meet the test of reasonableness. (2) The methods of cost allocation are not discriminatory. (3) For entities using accrual based accounting, the cost assigned to each fiscal year is determined in accordance with GAAP.
Condition. During testing of fringe benefit rates, as a percentage of total salaries and wages, we noted that the rate of retirement costs was significantly greater than the rate noted at the District-wide level. Management did not have a supporting calculation for the amount of retirement costs charge to the federal program.
Cause. The cause of this condition appears to be that the former business manager did not take due care in making sure that documentation existed to support the fringe benefit costs being charged to the program.
Effect. Certain of the District's federal expenditures were not documented in accordance with the Uniform Guidance.
Questioned Costs. The amount charged to the program exceeded the estimated allowable cost by $36,019.
Recommendation. We recommend that the District staff in charge of payroll administration familiarize themselves with the documentation requirements of the Uniform Guidance and retain supporting documentation to support the fringe benefit costs charged to federal awards.
View of Responsible Officials. We concur with the audit assessment regarding this matter.