Finding Text
Finding 2022-008 Lack of Internal Control over Activities Allowed or Unallowed and Material Weakness Allowable Costs/Cost Principles Material Noncompliance Federal Agency: U.S. Department of Education Federal Program: School Safety National Activities and Native Youth Community Programs ALN: 84.184 and 84.299 Award Numbers: S299A170061, S299A18022, S299A180025, and S18G190154 Award Years: 2017, 2018, and 2019 Type of Finding: Material weakness in internal control over compliance and material noncompliance. Criteria: Allowable cost principles are defined in 2 CFR 200.400. Condition and Context: We select a sample of 25 expenditures transactions for ALN 84.184. The District did not provide supporting documentation for 4 of these transactions. The District also did not provide detailed payroll distribution reports to select samples from. We selected 6 payroll transactions for ALN 84.184 and 15 payroll transactions for ALN 84.299. The District did not provide the auditors with supporting documentation for any of the payroll transactions selected. Cause: Lack of internal control over transactions charged to the major programs. Effect: The lack of supporting documentation allows for the potential for misstatement of expenditures being charged to the major program for which the cost is unallowable. Questioned Costs: Actual and likely questioned costs estimated to be below the reporting threshold of $25,000. Based on the auditor?s review of pay rates, all employees were being paid a reasonable amount based on the their position and the auditor?s experience with similar entities. Repeat Finding: No. We believe this to be an isolated issue due to employee turnover. Recommendation: We recommend the District adhere to their internal control policies to ensure that the regulations contained in 2 CFR 200 are followed. Management?s Response: Management agrees with this finding. See Corrective Action Plan.