Finding 625087 (2022-003)

Material Weakness
Requirement
B
Questioned Costs
$1
Year
2022
Accepted
2023-02-02
Audit: 46061
Organization: Madison District Public Schools (MI)

AI Summary

  • Core Issue: The District failed to document independent reviews for 16 out of 40 disbursements, raising concerns about compliance with allowable costs.
  • Impacted Requirements: Internal controls over disbursements are not being followed, increasing the risk of unallowable costs being charged to federal programs.
  • Recommended Follow-up: Ensure adherence to internal control policies by documenting independent reviews for all disbursement transactions.

Finding Text

2022-003 - Allowable Costs/Cost Principles - Disbursements Finding Type. Material Noncompliance; Material Weakness in Internal Control over Compliance Federal program(s) U.S. Department of Education: Education Stabilization Fund (ALN 84.425); Passed through MDE; All project numbers Criteria. The Uniform Guidance requires the District to establish internal controls over disbursements related to the compliance requirements applicable to allowable costs/cost provisions. The District's policies require an independent review of expenditures. Condition. The District was unable to provide evidence of allowable costs/cost principles and internal controls compliance as follows: Evidence of an independent review was not documented for 16 out of 40 disbursements selected for testing. The District could not provide any supporting documentation for costs charged on three out of 40 disbursements selected for testing. Cause. This condition appears to be the result of the District not adhering to established internal control policies and procedures. Effect. As a result of this condition, the District is at increased risk of unallowable costs being charged to federal programs without being detected by its internal controls. Questioned Costs. The total charges included in our sample that were not supported by allowable documentation amounted to $72,393. Recommendation. We recommend the District follow its internal control policies and procedures that require independent review of all disbursement transactions. View of Responsible Officials. Management Concurs Responsible Official. Director of Finance and Business Operations Estimated Completion Date. June 30, 2023

Categories

Questioned Costs Allowable Costs / Cost Principles

Other Findings in this Audit

  • 48645 2022-003
    Material Weakness
  • 48646 2022-004
    Material Weakness
  • 48647 2022-003
    Material Weakness
  • 48648 2022-004
    Material Weakness
  • 625088 2022-004
    Material Weakness
  • 625089 2022-003
    Material Weakness
  • 625090 2022-004
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund $1.16M
84.027 Special Education_grants to States $302,586
84.010 Title I Grants to Local Educational Agencies $276,931
10.553 School Breakfast Program $209,856
84.367 Improving Teacher Quality State Grants $40,753
84.424 Student Support and Academic Enrichment Program $28,431
10.555 National School Lunch Program $22,407
84.173 Special Education_preschool Grants $21,302
10.559 Summer Food Service Program for Children $17,250
84.365 English Language Acquisition State Grants $13,776
10.649 Pandemic Ebt Administrative Costs $3,063
10.558 Child and Adult Care Food Program $2,035