Finding Text
FINDING #2023-002: FEDERAL COMPLIANCE – TIME AND EFFORT REPORTING (50000) AL Number and Title: 84.010 – Title I, Part A, Basic Grants Low-Income and Neglected 84.027 – IDEA Basic Local Assistance Entitlement, Part B, Sec. 611 84.425 – Elementary and Secondary School Emergency Relief II (ESSER II) Fund 84.425 – Elementary and Secondary School Emergency Relief III (ESSER III) Fund Federal Grantor Name: U.S. Department of Education; Passed through California Department of Education Criteria: Federal regulation 2 CFR §200.430 states that “charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.” Standards for documentation of personnel expenses charged 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; • Be incorporated into the official records of the non‐Federal entity. • Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities. • Encompass both federally assisted and all other activities compensated by the non‐Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity’s written policy; • Comply with the established accounting policies and practices of the non‐Federal entity. • Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non‐Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. • Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a representative sample of 19 employees with salaries and benefits charged to the federal programs noted above during the 2022-23 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. This condition was present in 12 out of the 19 sample selections. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR §200.430. Questioned Cost: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs. Repeat Finding: This is a repeat of Finding #2022-002. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single-funded employees and monthly certifications for multi-funded employees. Corrective Action Plan: The Views of Responsible Officials and Corrective Action Plan are included on page 82. To be provided by client, signed on letterhead.