Finding Text
Federal program information:
Funding agencies: U.S. Department of Agriculture
Titles: Forest Service Schools and Roads Cluster
Assistance Listing Number: 10.665
Award numbers and years: July 1, 2021 through June 30, 2022
Pass-through grantor N/A
Compliance Requirements: Allowable Costs/Cost Principles
Questioned Costs: None
Criteria: The County received $754,090 of Title I funding related to the Forest Service Schools and Roads Cluster. These funds are to be used for public roads and public schools of the County in which the national forest is situated. The Uniform Guidance requires nonfederal entities that receive federal funding to identify in its accounts the specific expenditures that are paid for by each federal assistance program.
Condition: During fiscal year 2022, $454,089 of the grant funding was passed through to various schools located within the County and $300,000 was transferred to the County’s Road Fund. Sufficient expenditures appeared to have been incurred in the Road Fund during 2022 that were not funded by other sources to account for the allowable federal expenditures of this $300,000. However, the County does not specifically identify the expenditures incurred that are being allocated to this federal funding.
Cause and Effect: The County has typically transferred these funds to the Road Fund and has assumed that all costs incurred within the Road Fund are allowable under the Schools and Roads- Grants to State program. Because these federal expenditures are not separately identified and budgeted each year, there is an increased possibility that federal expenditures could be used for unallowed purposes.
Auditors’ Recommendations: The County should establish policies to ensure that all federal expenditures are budgeted and separately identifiable.