Finding Text
SIGNIFICANT DEFICIENCY U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND ? AL NUMBER 84.425D and 84.425U PASS-THROUGH NUMBER 3104 AUDIT PERIOD ? YEAR ENDED JUNE 30, 2022 2022-001 ALLOWABLE COSTS/COST PRINCIPLES Criteria or specific requirement: Office of Management and Budget (OMB) 2 CFR, part 200, subpart E ? Cost Principles establishes principles for determining allowable costs incurred by the District under federal awards. Such costs are necessary and reasonable for the performance of the federal award and adequately documented. Condition: On August 18, 2022, the Arkansas Division of Elementary and Secondary Education (DESE) conducted an on-site monitoring of the Mineral Springs School District?s use of Elementary and Secondary School Emergency Relief (ESSER) funds. DESE?s report issued on August 24, 2022, stated the district must move all expenditures related to a fieldhouse addition from ESSER funds to a local fund source. These expenditures included, but were not limited to, contractor fees, architect fees, labor, supplies, and equipment. As a result, the District identified $101,276 in unallowable fieldhouse expenditures and correctly transferred these expenditures to local funds. However, during our examination of expenditures, we identified an additional $38,219 in unallowable fieldhouse expenditures that were not identified and corrected by the District. Cause: Lack of internal controls and management oversight over program expenditures. Effect or potential effect: Unallowable costs of $38,219 were paid from COVID-19-Education Stabilization Fund. Questioned costs: The amount of questioned costs was $38,219. Context: An examination of fieldhouse expenditures totaling $139,495. 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 District will implement proper controls over program expenditures. We have contacted DESE for assistance on correcting this.