Finding 596581 (2022-001)

Significant Deficiency
Requirement
B
Questioned Costs
$1
Year
2022
Accepted
2023-03-28

AI Summary

  • Core Issue: The District made purchases over $5,000 without prior written approval, violating federal requirements.
  • Impacted Requirements: Purchases must comply with OMB 2 CFR section 200.439, which mandates prior approval for capital expenditures.
  • Recommended Follow-Up: The District should seek guidance from the Arkansas Division of Elementary and Secondary Education and strengthen internal controls for future expenditures.

Finding Text

U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBERS 84.425D AND 84.425U PASS-THROUGH NUMBER 0406 AUDIT PERIOD - YEAR ENDED JUNE 30, 2022 2022-001. Allowable Costs/Cost Principles Criteria or specific requirement: Purchases of equipment and other capital expenditures require the prior written approval of the Federal awarding agency or pass-through entity, as specified in Office of Management and Budget (OMB) 2 CFR section 200.439. Condition: During our examination of expenditures from the COVID-19 Education Stabilization Fund, we identified a facilities improvement purchase and an equipment purchase with unit costs greater than the $5,000 threshold for which the District did not obtain prior written approval from the Arkansas Division of Elementary and Secondary Education. These purchases had a total cost of $15,204. Cause: Lack of internal controls and management oversight over program expenditures. Effect or potential effect: Unallowable costs of $15,204 were paid from COVID-19 - Education Stabilization Fund. Questioned costs: The amount of questioned costs was $15,204. Context: We examined all capital expenditures of the COVID-19 - Education Stabilization Fund totaling $75,927. Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The ESSER Coordinator, Shane Patrick, Assistant Superintendent of Operations and the Chief Financial Officer, Terri Raskiewicz, are reviewing all actual expenses that pertain to COVID-19-Education Stabilization Fund. Shane Patrick did reach out to DESE and DESE provided our district with a letter stating these expenses would have been approved had we sent in a justification form. This item was approved by DESE in our overall ESSER plan.

Categories

Questioned Costs Allowable Costs / Cost Principles Internal Control / Segregation of Duties

Other Findings in this Audit

  • 20138 2022-001
    Significant Deficiency
  • 20139 2022-001
    Significant Deficiency
  • 596580 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.425 Covid-19 - Education Stabilization Fund $3.02M
84.010 Title I Grants to Local Educational Agencies $929,907
84.027 Special Education_grants to States $770,923
10.553 School Breakfast Program $766,179
32.009 Emergency Connectivity Fund Program $553,825
84.367 Supporting Effective Instruction State Grants $244,497
10.555 National School Lunch Program $94,235
84.048 Career and Technical Education -- Basic Grants to States $93,814
84.365 English Language Acquisition State Grants $86,293
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $64,209
84.173 Special Education_preschool Grants $22,283
84.011 Migrant Education_state Grant Program $20,171