Finding Text
Federal Program Name: Education Stabilization Fund
Assistance Listing Number: 84.425
Passed Through: Missouri Department of Elementary and Secondary Education
Federal Agency: U.S. Department of Education
Finding Type: Material weakness
Condition: The District was unable to provide documentary evidence that the amounts paid in salaries and wages to two individuals charged to the Education Stabilization Fund program were authorized the Board of Education, as required by District policy.
Effect: A sample of 40 transactions was selected for audit. The sample size included 30 individuals’ salaries and wages. Of the 30 individuals selected for testing, evidence of authorized salaries and wages was not able to be provided for two individuals. This condition increases the risk that material noncompliance could occur and not be detected and corrected.
Cause: During the current year, the District experienced a significant amount of turnover in several key positions, which led to several positions being vacant for significant periods of time during the year. During this period of transition, management did not devote sufficient resources or consideration to ensuring that internal control systems for the federal program were functioning effectively.
Criteria: The Uniform Guidance (2 CFR section 200.303) requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards
Questioned Costs: Unknown
Recommendation: Subsequent to June 30, 2023, management has filled the vacant positions and is working to reinstate the lapsed internal controls to ensure that responsibilities are properly separated and that there is monitoring over key processes. We recommend that management continue to evaluate the key processes, identify risks in the existing processes, and implement internal controls to respond to the identified risks.
Views of Responsible Officials and Planned Corrective Action: The District agrees with the finding and the recommendations of the auditors. The District has taken a number of steps to improve internal controls and will finalize a comprehensive plan for robust internal controls reinstatement by January 10, 2024. Since the arrival of new Human Resources Leadership in the fall of 2022, steps have been taken to ensure that all employee contracts are kept on file in hard copy and digital. The missing files occurred during a transition period during the hire and rehire period of spring and summer 2022, before the arrival of new leadership. At this time, the Human Resources department ensures redundancy of storage of these contracts, with both paper copies and digital copies of all signed contracts kept in secure spaces. A staff member is charged to ensure these are all filed, and the Supervisor does an internal audit to ensure safekeeping. Going forward, the Human Resources Director will conduct quarterly checks, in May, August, November, and February to ensure all files are in place.