Finding Text
Assistance Listing Number, Federal Agency, and Program Name - 84.425U, Department of Education, COVID-19 - Elementary and Secondary School Emergency Relief Fund Federal Award Identification Number and Year - S425D210041; 2022 Pass through Entity - Chicago Public Schools Finding Type - Significant deficiency Repeat Finding - No Criteria - All nonfederal entities must follow generally accepted accounting principles (GAAP) when recording federal revenue and expenses (2 CFR 200.403 (e)) Condition - Controls in place did not identify a portion of expenditures, related to summer school stipends, incurred in fiscal year 2023 that were applied to the federal award in fiscal year 2022. Questioned Costs - $22,096 Identification of How Questioned Costs Were Computed - The questioned costs represent total federal expenditures incurred in fiscal year 2023 that are included on the accompanying schedule of expenditures of federal awards. Context - A total of $34,525 was recorded as federal expenditures related to summer school stipends paid in June and July 2022. 16 of the 25 days in the summer school term took place during fiscal year 2023. As such, only 9/25 of these expenditures should be reflected on the accompanying schedule of expenditures of federal awards. Cause and Effect - While the School had procedures in place to review for allowable costs, management's review did not prevent management from recording $22,096 more of expenditures of federal awards during fiscal year 2022 than what was incurred. Recommendation - We recommend the School review its procedures and controls to ensure costs are incurred in the same period as they are applied to federal awards. Views of Responsible Officials and Corrective Action Plan - The error was the result of a misunderstanding with the pass through entity regarding the reimbursement process. Going forward, a review will be performed to ensure federal revenue is recorded in the same period as the corresponding expense.