Finding Text
U.S. DEPARTMENT OF EDUCATION
Passed through Massachusetts Department of Elementary and Secondary Education
Special Education Cluster
Special Education Grants to States Federal Assistance Listing No. 84.027
Special Education Preschool Grants Federal Assistance Listing No. 84.173 2023-002: Controls for Monitoring Payroll Charged to the Grant
Compliance Requirement: Allowable Costs/Cost Principles
Type of Finding: Compliance and Material Weakness in Internal Control Over Compliance
Criteria or Specific Requirement: Grantees must provide reasonable assurance that Federal Awards are expended only for allowable activities and that the costs of goods and services charged to Federal awards are allowable and in accordance with applicable cost principles.
Condition: Payroll expenditures charged to the Special Education Cluster grant are required to be supported with documentation (i.e., semi-annual certifications and personnel activity reports) substantiating that the employees are eligible to be charged to the grant and that the payroll charged relates to time spent accomplishing grant objectives. The City utilizes semi-annual time and effort certification forms to document the eligibility of the employees paid out of the grant. These forms, however, were not completed for each employee charged out of the grant.
Context: The City did not maintain sufficient documentation to demonstrate compliance with federal and state time and effort reporting requirements in accordance with the provisions of Title 2 U.S. Code of Federal Regulations Part 225 Cost Principals for State, Local, and Indian Tribal Governments.
Effect: The City has not complied with the federal and state time and effort reporting requirements.
Cause: Management has not established written guidelines and procedures outlining the time and effort reporting and documentation requirements that department heads must adhere with to ensure compliance with federal and state time and effort reporting requirements. Such guidelines and procedures should indicate under what circumstances semi-annual certifications and personnel activity reports (PARS) are required. Management also has not adopted and implemented standardized forms that include all data as required by federal and state guidelines to demonstrate compliance with these requirements.
Questioned Costs: Total payroll costs charged to the grant in 2023 totaled $1,794,406, which was paid on a bi-weekly basis throughout the year. Three of the pay periods were selected for testing, which totaled $156,211 for 65 employees paid out of the grant during those pay periods. From the pay periods selected for testing, $156,211 could not be substantiated through time and effort reports or any similar internal control process.
Repeat Finding: This matter was reported as a finding in the previous year as finding 2022-001.
Recommendation: The City should establish written policies and procedures outlining the time and effort reporting and documentation requirements that must be adhered with to ensure compliance with federal and state time and effort reporting requirements. Management should adopt and implement standardized forms that include all data required by federal and state guidelines and provide training to ensure that program personnel understand the time and effort reporting requirements.
Views of Responsible Officials and Planned Corrective Actions: The School District will immediately begin reissuing and recollecting the forms for the special education grant for 2024, as well as into future periods.