Finding Text
FINDING 2023-002
Subject: COVID-19 Education Stabilization Fund – Allowable Costs
Federal Agency: Department of Education
Federal Program: COVID-19 Education Stabilization Fund
Assistance Listing Number: 84.425U
Federal Award Number: S425U210013
Compliance Requirement: Allowable Costs
Audit Findings: Significant Deficiency
Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards
carried out through grants, cost reimbursement contracts, and other agreements with state and local
governments. To be allowable, under federal awards, cost must meet certain criteria:
a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under
these principles.
b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types
or amount of cost items.
c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other
activities of the non-Federal entity.
d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any
other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as
an indirect cost.
e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state
and local governments and Indian tribes only, as otherwise provided for in this part.
f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally
financed program in either the current or a prior period.
g) Be adequately documented.
h) Cost must be incurred during the approved budget period.
Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must establish
and maintain effective internal control over the Federal award that provides reasonable assurance that the
non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and
terms and conditions of the Federal award.
Condition: The School Corporation did not have internal controls in place to ensure that the School
Corporation complied with the allowable cost requirements. The School Corporation did not have adequate
procedures in place to ensure that the expenditures charged to the grant were accurate and pertained to
the Education Stabilization Fund.
Cause: A proper system of internal control was not designed by management of the School Corporation
that included a thorough review of expenditures charged to the grant.
Effect: Without the proper implementation of an effectively designed system of internal controls, the control
system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance.
Questioned Costs: There was $24,593 of questioned costs identified.
Context: The School Corporation requested a transfer of $54,886 from the Education Stabilization
Fund to the School Lunch Fund to cover costs incurred for Grab & Go meals as a result of the
COVID-19 Pandemic. Upon review of the supporting detail, the actual amount of expenditures for the Grab
& Go meals was $30,293, resulting in over reporting of receipts in the amount of $24,593. This was due
to a clerical error made by management that was not caught in the review process.
Identification as a repeat finding: Not a repeat finding.
Recommendation: We recommended that management of the School Corporation establish a proper
system of internal control to ensure the appropriate amounts are charged to the grants.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.