Finding Text
Finding 2022-001 - Schedule of Expenditures of Federal Awards United States Department of Education Pass Through Entity: Texas Education Agency Federal Program: American Rescue Plan ? Elementary and Secondary School Emergency Relief (ARP ESSER) Assistance Listing Number: 84.425U Federal Award Number: S425U210042 Federal Award Year 2022 Repeat Comment: No Type of Finding: Material Weakness Criteria: CFR 200.302(b)(1) requires that the nonfederal entity must identify in its accounts and on the schedule of expenditures of federal awards all federal awards received and expended, as well as the federal programs under which they were received. Federal program and award identification must include, as applicable, the Assistance Listing program title and number, the federal award identification number and year, the name of the federal agency, and the name of the pass-through entity, if any. Condition: When reviewing the net assets released from restriction in the draft financial statements presented to the board, management determined and brought to the attention of the auditors the net assets restricted for pre-award costs for the ESSER federal program ($1,976,911) should have been released from restrictions during fiscal year ending June 30, 2022. The auditor, when tying the draft schedule of expenditures of federal awards to the updated schedules, determined the Organization had not included the pre-award federal expenditures related to the ESSER federal program. As a result, the initial testing of the ESSER major program did not include $1,976,991 in ESSER expenditures. When this was brought to management?s attention, the schedule of expenditures of federal awards was updated and the additional expenditures provided for testing. Cause: The additional $1,976,991 was related to ?pre-award? dollars awarded during fiscal year ended June 30, 2022, where allowable expenditures incurred in the previous year were permitted by the grant to be used for the ESSER funds awarded in the current year. Management was not aware of the requirement to include these amounts on the schedule of expenditures of federal awards. Effect: The excluded amounts from the schedule of expenditures of federal awards resulted in the expenditures not being included in the expenditures initially tested by the auditor. Additional testing was performed once the error was identified. When this matter was brought to the attention of management, they updated the schedule of expenditures of federal awards and provided the population to the auditor to test the additional $1,976,991 of the major program. These expenditures were material to the schedule of expenditures of federal awards and the major program. Questioned Costs: None. Prevalence: This issue appears isolated to the pre-award dollars of the ESSER program. Repeat Finding: No. Recommendation: We recommend management of the Organization strengthen their internal controls to ensure all federal awards are included on the schedule of expenditures of federal awards. Views of Responsible Officials: Management agrees that the issue identified is isolated to the pre-award dollars of the ESSER program and does not anticipate a recurrence of this type of issue in future periods.