Finding 946969 (2023-001)

The following finding represents a significant deficiency in internal control and an instance of noncompliance that is required to be reported by the Uniform Guidance. The finding has been coded as follows: Five Digit Code AB 3627 Finding Type 50000 Federal Compliance 2023‐001 50000‐Federal Programs – Approval of Automatic Payroll System (Noncompliance and Significant Deficiency in Internal Controls over Compliance) Federal Programs Affected Title I, Part A, Basic Grants Low‐Income and Neglected Assistance Listing Number: 84.010 Pass‐Through Entity: California Department of Education Federal Agency: U.S. Department of Education Criteria or Specific Requirements Per Title 2, Code of Federal Regulations, Part 200, Subpart E, Section 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition Through review of wages charged to the federal programs, it was noted that three substitute employees were incorrectly charged to Title I, Part A. As these employees were substituting for personnel who are not charged to Title I, Part A, the substitute costs have been deemed to be unallowable for the program. Questioned Costs Through review of the provided payroll reports, we noted that the charges related to the identified substitute employees amounted to $2,521. Context The condition was identified through inquiry with District personnel and review of available District records related to salaries and wages charged to Title I, Part A. Effect The District has not complied with the requirements identified in Title 2, Code of Federal Regulations, Part 200, Subpart E, Section 200.430 (i)(1). Cause The identified condition appears to have materialized due to ineffective monitoring of the position assignments within the District’s absence tracking system. The funding line was not adjusted for the identified employees, resulting in the incorrect charging of their wages to Title I, Part A. Repeat Finding No. Recommendation The District should monitor the funding lines within the absence tracking system to ensure that substitute employees are charged to the appropriate funding source.