Finding 963410 (2023-001)

Findings and Questioned Costs Related to Federal Awards Finding Number: 2023‐001 Repeat Finding: No Program Name/Assistance Listing Title: Education Stabilization Fund Assistance Listing Number: 84.425 Federal Agency: U.S. Department of Education Federal Award Number: S425U210038 Pass‐Through Agency: Arizona Department of Education Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria Districts must submit an application through the Arizona Department of Education’s (ADE) Grants Management Enterprise system for ADE to review and approve grant expenditures. Each time the District makes an update to the expenditures that will be funded by the grant, the District must file an amended application which must be approved by ADE. Condition The District did not update the ESSER III grant application in a timely manner. The last time the grant application was updated was May 4, 2022. Since that date, the District has made changes to the expenditures funded from the grant, but has not notified ADE of those changes. Cause The District has not developed nor implemented strong internal controls over grant reporting due to turnover in key finance positions. Effect The District is at risk for making unallowable expenditures. Context For eight of 10 disbursements paid using Education Stabilization Fund funding reviewed, the District did not include the expenditures on the grant application approved by the ADE. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should develop or implement strong internal controls over grant reporting to reduce the risk of making allowable expenditures. Views of Responsible Officials See Corrective Action Plan.