Finding Text
Finding 2022-002 Federal Agency: U.S. Department of Education Federal Program: Charter School Program Subgrant Assistance Listing Number: 84.282 Award Period: 03/13/2020 - 09/30/2025 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters - Allowable Costs/Cost Principles Criteria: The School?s procedures for preparing requests for reimbursement should include controls to prevent duplication of expenditures when submitting requests to multiple granting agencies. The Uniform Guidance requires that all recipients of federal awards develop an internal control framework in line with the framework proposed by the Committee of Sponsoring Organizations (COSO). The five elements of the COSO framework are the control environment, risk assessment, control activities, information and communication, and monitoring. Each one of these common findings could be prevented by developing control activities which would address the risks of noncompliance identified by management. Condition: In our testing of 33 general disbursements we found one invoice that was initially claimed for reimbursement from a non-major federal program (USAC E-rate). Due to a miscommunication, the invoice was also included in an invoice for reimbursement from the Charter School Program subgrant. Both granting agencies reimbursed this cost. We consider this internal control deficiency to be a significant deficiency. Questioned Costs: None. Context: Our procedures included examining 43 general disbursements from the year under audit. Of those reviewed, 33 were claims for reimbursement from the Charter School Program grant. One transaction tested was found to have been claimed against two federal programs, one major program and one non-major program. Cause: As a result of a miscommunication, the contracted accounting staff did not anticipate the invoice to be reimbursed by USAC E-rate. The contracted accounting staff manages the preparation of the claims for reimbursement for all grants on behalf of the School. These are not reviewed by management prior to submission to the granting agency. The invoice was subsequently submitted for reimbursement from the CSP grant. Effect: The School was reimbursed the cost of the invoice from two separate federal award funding agencies. Without review and approval of federal grant reimbursement requests by a second employee, it is possible that reimbursement requests may be in an incorrect amount, incorrectly timed, submitted for expenditures not qualifying under the grant agreement, or submitted to multiple funding sources in error. This could result in an overstatement of grant revenue. The School was able to provide documentation for other allowable costs that have not previously been reimbursed by any other federal or state agency. 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 correct the April 2022 claim to remove the duplicated invoice and provide documentation to the funder for other allowable costs.