Finding 83025 (2022-005)

2022-005 Activities Allowed or Unallowed, and Allowable Costs and Cost Principles for Education Stabilization Fund Federal program: ALN 84.425U&D Education Stabilization Fund Federal agency: U.S. Department of Education Pass-through entity: Colorado Department of Education Criteria: A non-federal grant recipient should set reasonable budgets for programs to minimize incentives to miscode expenses. The recipient should compare budgeted and actual allowable costs and investigate variances where applicable. Condition: While the Organization created a budget for overall activities, they did not input the budget into their accounting system or create an outside tool to track actual grant expenditures with the budget. Questioned costs: None noted. Over drawn funds were reclassified to unearned revenue. Context: While performing walkthroughs and other tests of controls it was identified that the district did not create or maintain budget to actual reports for grant awards. Effect: The District drew a material amount of funds prior to incurring the related expenditures. Cause: Controls to ensure budgets are created and utilized are not properly designed or operating effectively. Recommendation: Management should implement procedures that include a creation of a budget for each grant award and track expenses against the budget. Views of responsible officials and planned corrective action: Management agrees with this finding and is working on implementing a budget to actual reporting process.