Finding 584634 (2023-002)

AL 81.141 High school Equivalency Program, Better Together Central Oregon, Award ID: S141A190019, Award Year: July 1, 2022 – June 30, 2023, Compliance Requirement: B –Cost Principles. Criteria: Management must implement and maintain internal controls over compliance to ensure only allowable costs are charged to federal programs. Condition: The district charged wages and associated payroll costs to the program which were incurred in previous program budget periods and thus, not allowable to be charged to the program during the fiscal year ended June 30, 2023, absent an approved waiver from the federal agency. Cause: The District’s internal controls over compliance did not include sufficient controls to ensure that only costs incurred during the current budget period would be included in their request for reimbursement. Effect: Wages allocated to the program were not incurred in the current approved budget period, resulting in a questioned cost of $35,844 charged to the program. Context: The error was isolated to one employees’ wages and associated payroll costs. Recommendation: We recommend the District implement formal written policies for ensuring that all charges to federal programs be limited to those incurred in the current budget period. If management identifies a need to use carry over funds by charging prior year allowable expenses, permission should be obtained from the federal granting agency prior to such charge. Views of responsible officials: The District agrees with this finding and has requested a waiver from the granting agency. Processes will be reviewed, and any necessary changes will be implemented to ensure all wages are correctly allocated within the budget year.