Finding Text
Department of Education 2022-02 Compliance Finding and Material Weakness 84.425 Education Stabilization Fund Criteria and Condition: Per the Office of Management and Budget Compliance Supplement and the Cost Principles for for State, Local, and Indian Tribe Governments, claims for reimbursements must be for actual costs incurred. Context: During a test of disbursements, we observed that an invoice was submitted for reimbursement to Virginia Department of Education under the Education Stabilization Fund (ESSER) as well under the Coronavirus State and Local Fiscal Recovery Funds to Support HVAC Replacement. Under the terms of the Coronavirus State and Local Fiscal Recovery Funds to Support HVAC Replacement, there is a 100% local match required, which could be funded with ESSER funding. The School Board total HVAC project cost was $224,856 and the school board received reimbursement in the amount of $424,856 ($224,856 under ESSER and $200,000 under ARPA HVAC). Cause: The School Board received reimbursement for the HVAC project in excess of the allowable amount under conditions of the grants. Effect: Federal revenues and expenditures of federal awards exceeded the allowable amount by $200,000. Questioned Costs: Total allowable costs for the HVAC project were $224,856. Half of the project costs were eligible for funding under each program (ESSER and HVAC ARPA). Total grant reimbursement amounted to $424,856. Therefore, $200,000 is considered questioned costs. Recommendation: The School Board should thoroughly review the terms and conditions of federal awards before submitting reimbursement requests to ensure compliance with federal programs guidelines. Views of Responsible Officials and Planned Corrective Actions: Management will review terms and conditions of federal awards before submitting reimbursement requests to ensure compliance. The School Board will issue a check in the amount of $200,000 and return the excess funds to the Virginia Department of Education.