Finding Text
Finding 2022-004 Federal Agency: U.S. Department of Education Federal Program: Elementary and Secondary School Emergency Relief (ESSER) Assistance Listing Number: 84.425U Award Period: 09/01/2021 - 08/31/2022 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters - Reporting Criteria: The School?s procedures for reporting expenditures should include controls to ensure reported expenditures are supported by general ledger detail. The objectives of the Education Stabilization Fund are to prevent, prepare for and respond to the COVID-19 pandemic. During fiscal year 2022, the School expended $227,096 in federal funding from the Elementary and Secondary School Emergency Relief (ESSER) fund subprogram awarded by the American Rescue Plan (ARP) Act (ESSER III). Federal regulations require award recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal regulations and the Washington State Office of Superintendent of Public Instruction (OSPI) require the School to report uses of the ESSER III funds via the online reporting tool provided on the OSPI website. Uses reported were required to match expenditures claimed through the OSPI Electronic Data System (EDS) claim process. Condition: During our testing over reporting of ESSER III award, we noted that the School completed the required reports. However, the School?s controls were not effective to ensure it maintained adequate documentation to support use of funds, as required by federal regulations and the grantor. We consider this internal control deficiency to be a significant deficiency. Questioned Costs: None. Context: Our procedures included examining the final report provided to OSPI as of August 31, 2022, and tracing funding uses to general ledger reports provided by the School. The School was not able to provide general ledger detail to support all of the expenditures reported. Cause: The School maintained a process for collecting and reporting of ESSER III expenditures that did not allow for retaining detailed reports that documented use of funds reported through the OSPI portal, as the expenditures were tracked on a cumulative basis throughout the fiscal year. While the School did timely file the required reports during the fiscal year ending 2022, they did not maintain detailed records that supported each report submission at the specific point in time each report was submitted. Effect: The School did not comply with OSPI reporting requirements for use of ESSER III funds. By not keeping general ledger reports that support point-in-time claims for reimbursement, the School cannot demonstrate compliance with OSPI?s documentation requirements to support costs charged to federal programs. In addition, it cannot assure the federal grantor that payroll costs charged to the ESSER III award were accurate or valid. The School provided sufficient documentation that demonstrated the grant reporting period was open beyond the fiscal year-end and that the next claim would correct the reporting categories. Therefore, we are not questioning costs. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the School review reporting requirements of federal awards and establish controls to ensure detailed documentation is retained that supports completed reports.