Finding Text
Criteria: Federal regulation (2 CFR 200.303(a)) requires that non-federal entities must establish and
maintain effective internal controls 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 the
terms and conditions of the Federal award. These internal controls should be in compliance with guidance
in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the
United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).
Condition: We performed tests of controls and compliance over allowable costs/cost principles for
personnel and nonpayroll expenditures charged during fiscal year 2023. Through testing and risk
assessment, it was noted that the District reallocated personnel and nonpayroll expenditures from the
General fund to the Title I fund, the IDEA fund, IDEA early education fund. Details of the exact
transactions reallocated to be charged to federal funds were not maintained. We performed alternative
procedures to establish a population of transactions which were reallocated from the General Fund and
found the costs charged were allowable.
Cause: The District did not implement policies and procedures to ensure complete and accurate standards
for documentation of personnel and nonpayroll expenses.
Effect: The result of this is an increased risk of noncompliance related to allowable costs and cost
principles.
Recommendation: We recommend the District evaluate applicable controls and determine why they
could be ineffective in preventing noncompliance.