Finding Text
FINDING #2023-001: EDUCATION STABILZIATION FUNDS – INDIRECT COSTS (50000)
Federal Programs Affected:
Program Name: Expanded Learning Opportunities (ELO) Grant ESSER II State Reserve
Assistance Listing Number: 84.425
Pass-Through Agency: California Department of Education (CDE)
Federal Agency: U.S. Department of Education
Program Name: Expanded Learning Opportunities (ELO) Grant GEER II
Assistance Listing Number: 84.425
Pass-Through Agency: California Department of Education (CDE)
Federal Agency: U.S. Department of Education
Program Name: Expanded Learning Opportunities (ELO) Grant: ESSER III State Reserve Emergency Needs
Assistance Listing Number: 84.425
Pass-Through Agency: California Department of Education (CDE)
Federal Agency: U.S. Department of Education
Criteria: The United States Department of Education has approved a delegation agreement with the California
Department of Education (CDE) that authorizes the CDE to establish indirect cost rates for California local education
agencies (LEAs). The CDE has been delegated authority to calculate and approve indirect cost rates annually for
LEAs. For the Education Stabilization Fund (ESF) Program, Education Code Section 38101(c) limits school district
indirect costs to the lesser of the District’s individual CDE approved indirect cost rate or the statewide average indirect
rate. For ESF programs included under the Expanded Learning Opportunities (ELO) Grant, indirect costs are not
allowable.
Condition: During our compliance procedures related to activities allowed or unallowed, we noted that the District
charged unallowable indirect costs totaling $176,938 to the ELO Grant portions of the ESF Program.
Context: The condition was identified through recalculation of the indirect costs charged to the federal programs.
Cause: The condition identified appears to be due to the District not being familiar with the indirect cost requirements
for each of the affected federal grants.
Effect: The District charged unallowed expenditures to the programs.
Questioned Costs: $176,938, the amount of indirect costs charged to the programs.
Repeat Finding: This is not a repeat finding.
Recommendation: It is recommended that the District implements a review process for indirect costs, which should
include review of relevant grant agreements and relevant federal guidance.
Views of Responsible Officials: See Corrective Action Plan on following page.