Finding Text
The District?s internal controls were inadequate for ensuring compliance with requirements for time-and-effort documentation. Assistance Listing Number and Title: 84.010 ? Title I Grants to Local Educational Agencies Federal Grantor Name: U.S. Department of Education Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: 0204000, 0270309, 0270595 Known Questioned Cost Amount: $0 Background The objective of the Title I program is to improve the teaching and learning of children who are at risk of not meeting state academic standards and who reside in areas with high concentrations of children from low-income families. During fiscal year 2022, the District spent $890,158 in Title I federal funding. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. The District is responsible for ensuring it supports all payroll costs charged to the program with adequate time-and-effort documentation, as federal regulations and the awarding agency require. Depending on the number and type of activities an employee performs, documentation can be a semiannual certification or a monthly personnel activity report, such as a timesheet. The Office of Superintendent of Public Instruction (OSPI) approved a plan for the District to complete and certify quarterly time-and-effort documentation based on employees? predetermined schedules. Description of Condition The District?s internal controls were ineffective for ensuring it supported all salaries and benefits charged to the program with appropriate time-and-effort documentation. The District could not provide quarterly time-and-effort documentation for six employees. We consider this deficiency in internal controls to be material weakness, which led to a material noncompliance. The issue was not reported as a finding in the prior audit. Cause of Condition The District had turnover among key staff responsible for recordkeeping and preparing time-and-effort documentation. As a result, current District staff were unable to locate the documents for the six employees. Effect of Condition Using a nonstatistical sample, we found six of 19 employees (36 percent) whose payroll costs totaling $95,142 did not have time-and-effort documentation to support the hours worked on the program. Without adequate time-and-effort documentation, the District cannot assure the federal grantor that payroll costs charged to the program were accurate and valid. During the audit, the District provided alternative documentation to show the employees worked in the program and the costs charged to it were for allowable activities. Therefore, we are not questioning these costs. Recommendation We recommend the District establish effective internal controls to ensure all payroll costs charged to applicable federal programs comply with federal and OSPI requirements for time-and-effort documentation. District?s Response The Wahluke School District concurs with this finding. The following corrective actions will be taken: The Director of Finance will revise the time and effort procedure to include a verification process to ensure that all federally funded staff complete and submit time and effort forms. The Director of Finance will meet with the Grants Manager on a quarterly basis to review the staffing schedules and payroll coding to ensure that all federally funded staff are included in the Time and Effort tracking spreadsheet. We thank the District for its cooperation and assistance during the audit and acknowledge its commitment to improving the condition described. We will review the status of this issue during our next audit. Applicable Laws and Regulations Office of Superintendent of Public Instruction Addendum to Bulletin 048-17, establishes requirements for documenting time and effort. Title 2 CFR Part 200, Uniform Guidance, Subpart E, Cost Principles, establishes requirements for determining allowable costs and supporting costs allocated to federal programs. Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11.