Finding 9033 (2023-002)

U.S. Department of Education Education Stabilization Fund – AL # 84.425 Criteria – Management is responsible for ensuring federal expenditures meet the Allowable Cost/Cost Principles as defined by 2 CFR Part 200, where goods and services must be received prior to payments being issued. Condition – Payments for expenditures associated with debt service obligations were expensed to the program but not disbursed to the debt holder. Cause – Internal controls in place did not ensure expenditures recorded met the federal compliance requirements for Allowable Costs/Cost Principles as defined in 2 CFR Part 200. Effect or potential effect – Prior to adjustment, federal expenditures and the corresponding federal revenue were overstated at year end by material amounts. This could require the District to pay back monies received under the federal program. Questioned costs –$2,782,258 Recommendations – We recommend the District enhance internal controls to ensure that eligible expenditures have been incurred prior to recording the expense. Views of Responsible Officials and Planned Corrective Actions – Management agrees with this finding. Management will properly apply internal controls to the process of recording expenditures to ensure the expenditures meet the federal Allowable Costs/Cost Principles as defined in 2 CFR Part 200.