Finding Text
2023-004 Preparation of and Internal controls over Schedule of Expenditures of Federal Awards Preparation (Material Weakness)
Federal Agency: U.S Department of Education
Program Name: Child Nutrition Cluster
Assistance Listing Numbers: 10.553, 10.555 and 10.559
Award Period: June 30, 2023
Criteria: According to 2 CFR 200, Subpart F, the District is required to prepare a schedule of federal expenditures, which must include the total federal awards expended as determined in accordance with §200.502. An effective internal control system exists if controls are effective in preventing or detecting material misstatements in the preparation of the schedule of federal expenditures of federal awards (the schedule). It provides reasonable assurance for the reliability of financial information and compliance with laws and regulations.
Condition: We have determined that there was an inadequate design of internal control over the preparation of the schedule during the fiscal year ended June 30, 2023. The current financial reporting process does not ensure accuracy and completeness in the preparation of the schedule by the District, as required by Uniform Guidance.
Cause: The District’s policies and procedures were not designed to ensure the District’s preparation of the schedule in conformity with Uniform Guidance.
Effect: The District did not prepare the schedule in conformity with Uniform Guidance. This increases the likelihood of a material misstatement and noncompliance with laws and regulations.
Recommendation: We recommend the Board of Education and management review the financial reporting process. Once this review is complete, the District should then perform a risk assessment to determine the best way to implement appropriate internal controls over financial reporting to ensure that the District prepares the schedule conformity with Uniform Guidance.
Questioned Costs: None.
Repeat Finding: No.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and plans to develop proper written policies and procedures for the internal control over compliance to ensure accuracy and completeness in the District’s preparation of the schedule as required by Uniform Guidance.