Finding Text
Federal Agency: U.S. Department of Education
Federal Program Name: COVID-19 – Education Stabilization Fund
Assistance Listing Number: 84.425U
Federal Award Identification Number and Year: S425U210033 - 2022
Pass-Through Agency: Colorado Department of Education
Pass-Through Number(s): 4414, 9914
Award Period: March 24, 2021 through September 30, 2023
Compliance Requirement: Allowable Activities
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the allowable costs and activities. The District should have internal controls designed to ensure compliance with those provisions.
Condition: During our testing, we noted 8 employees who had amounts incorrectly charged to the grant and 3 employees who did not have documented time and effort in a reasonable period.
Questioned costs: $52,317 Known
Context: During our testing, we noted the District did not thoroughly review the year end balances charged to the grant by employee to ensure the amounts were charged correctly. The District's new enterprise resource planning (ERP) system allocated payroll changes made via journal entry in addition to the District's manual journal entry, which in effect overcorrected the error. This caused adjustments made to personnel expenditures to not be reversed from the expenditures charged to the grant. There was a total of 8 employees where this error occurred. Further, during our testing, we noted 3 employees who had time and effort documented after our selections for testing were made. This did not result in any questioned costs being charged to the grant but was an issue with the grant controls not operating as they should.
Cause: The District was unaware the accounting software was not reducing these amounts from the grant, and did not add a check to their controls to ensure it was being done accurately. Further, the 3 employees with no time and effort was due to their time being allocated after the fact, as they were determined to have eligible time worked for ESSER.
Effect: Salaries and wages paid with federal funding have the potential of being funded by the grant when their time was not eligible for the grant's purpose and/or actual payroll charges were subsequently reversed.
Recommendation: We recommend the District add a review process into their controls to ensure all employees’ time being charged to the grant is accurately captured. Additionally, we recommend the District review and adjust all final time and effort certifications in a timely manner, based on the final adjusted and allowable personnel expenditures charged to the grant.
Views of responsible officials: There is no disagreement with the audit finding.