Finding 771437 (2022-001)

Significant Deficiency Repeat Finding
Requirement
BCIL
Questioned Costs
-
Year
2022
Accepted
2023-03-30

AI Summary

  • Core Issue: The Academy lacks adequate written internal controls over compliance with federal requirements for cash management, allowable costs, financial management, and procurement.
  • Impacted Requirements: This affects compliance with 2 CFR 200.302(b)(5), (6), (7) and 200.318, which mandate specific written procedures and standards.
  • Recommended Follow-Up: The Academy should update its policies, ensure regular budget comparisons, and align with the latest Uniform Guidance to strengthen compliance.

Finding Text

SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE ? ALL FEDERAL PROGRAMS AWARDED UNDER THE UNIFORM GUIDANCE 2022-001 Internal Controls Over Compliance With Cash Management, Allowable Costs, Standards for Financial Management, and Procurement Criteria ? 2 CFR ? 200.302(b)(5), (6), and (7) requires Universal Academy (the Academy) to have written cash management procedures, which includes procedures for determining the allowability of costs in accordance with 2 CFR 200 Subpart E ? Cost Principles, as well as a required written budget to actual comparison of expenditures for each federal award. 2 CFR 200.318(a) requires the Academy to have documented written procurement procedures, which reflect applicable state and local laws, provided they conform to applicable federal laws. 2 CFR 200.318(c) and 48 CFR 52.203-13 require documented written standards of conduct that cover conflicts of interest and govern the performance of employees engaged in the selection, award, and administration of contracts. Condition ? During our audit, we noted that the Academy?s written internal control policies over compliance with the U.S. Office of Management and Budget?s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) did not include adequate written controls over compliance with cash management, allowable costs, financial management standards, and procurement. Questioned Costs ? None. Our testing did not indicate any instances of noncompliance. Context ? The lack of written controls pertains to all federal grants. This was not a statistically valid sample. Repeat Finding ? This is a current year and prior year finding. Cause ? The Academy?s required Uniform Guidance written internal control policies for compliance over federal awards do not adequately address some required internal control policies, including cash management, allowable costs, financial management, and procurement. Effect ? This could be viewed as a violation of the award agreement. Recommendation ? We recommend that the Academy review its internal control procedures relating to cash management, allowable costs, financial management, and procurement for all federal programs. The Academy should review the new Uniform Guidance to obtain a better understanding of the requirements and identify any needed policy and procedure changes, in addition to those already referenced above. We also recommend the Academy adopt written policies pertaining to cash management, allowable costs, financial management, and procurement for all federal programs. The Academy should also document and perform regular budget to actual comparison of expenditures for each federal award. View of Responsible Official and Planned Corrective Actions ? The Academy agrees with the finding. The Academy has reviewed and updated its written policies and procedures relating to cash management, allowable costs, standards for financial management, and procurement for its federal programs to ensure compliance with the Uniform Guidance effective for the following fiscal year. The Academy has separately issued a Corrective Action Plan related to this finding.

Categories

Allowable Costs / Cost Principles Procurement, Suspension & Debarment Cash Management Significant Deficiency

Other Findings in this Audit

  • 194995 2022-001
    Significant Deficiency Repeat
  • 194996 2022-002
    Significant Deficiency
  • 194997 2022-001
    Significant Deficiency Repeat
  • 194998 2022-002
    Significant Deficiency
  • 771438 2022-002
    Significant Deficiency
  • 771439 2022-001
    Significant Deficiency Repeat
  • 771440 2022-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund $1.02M
84.010 Title I Grants to Local Educational Agencies $222,765
10.553 School Breakfast Program $136,222
10.555 National School Lunch Program $33,735
84.365 English Language Acquisition State Grants $23,609
10.559 Summer Food Service Program for Children $17,758
84.027 Special Education_grants to States $1,428