Finding 969064 (2023-002)

Material Weakness
Requirement
B
Questioned Costs
$1
Year
2023
Accepted
2024-04-09

AI Summary

  • Core Issue: The School District purchased a catering truck for $80,000 without required prior written approval, leading to questioned costs.
  • Impacted Requirements: Capital expenditures over $5,000 must have prior approval from the Federal awarding agency or pass-through entity to be allowable.
  • Recommended Follow-Up: Ensure the School District obtains prior written approval for all capital expenditures over $5,000 to comply with federal regulations.

Finding Text

2 CFR §400.1 gives regulatory effect to the Department of Agriculture for 2 CFR §200.439(b) which provides that the following rules of allowability must apply to equipment and other capital expenditures: (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. (2) Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5,000 or more have the prior written approval of the Federal awarding agency or pass-through entity. Furthermore, the School District’s Administration of Federal Grant Funds Policy (DECA) provides costs charged by the school system to a federal grant must be allowed under the individual program and be in accordance with the cost principles established in the Uniform Guidance, including how charges made to the grant for personnel are to be determined. Costs will be charged to a federal grant only when the costs is reasonable and necessary for the program, in compliance with applicable laws and regulations, allocable to the grant, adequately documented and consistent with School District policies and procedures that apply to both federally-funded and non-federally-funded activities. During fiscal year 2023, the School District purchased a catering truck in the amount of $80,000 with commingled Child Nutrition Cluster monies without obtaining prior written approval from the Ohio Department of Education, the pass-through entity, or the Department of Agriculture, resulting in questioned costs of $80,000. Failure to acquire prior written approval for capital expenditures with a unit cost of $5,000 or more from the Federal awarding agency or pass-through entity may result in expenditures that are not allowable under Federal awards. We recommend the School District acquire prior written approval for capital expenditures with a unit cost of $5,000 or more to ensure compliance with federal award requirements.

Categories

Questioned Costs Allowable Costs / Cost Principles

Other Findings in this Audit

  • 392618 2023-002
    Material Weakness
  • 392619 2023-002
    Material Weakness
  • 392620 2023-002
    Material Weakness
  • 392621 2023-002
    Material Weakness
  • 392622 2023-002
    Material Weakness
  • 969060 2023-002
    Material Weakness
  • 969061 2023-002
    Material Weakness
  • 969062 2023-002
    Material Weakness
  • 969063 2023-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
10.555 National School Lunch Program $470,432
84.287 Twenty-First Century Community Learning Centers $323,230
84.010 Title I Grants to Local Educational Agencies $286,247
10.553 School Breakfast Program $151,186
93.575 Child Care and Development Block Grant $75,176
84.367 Supporting Effective Instruction State Grants $72,056
10.559 Summer Food Service Program for Children $27,060
21.027 Coronavirus State and Local Fiscal Recovery Funds $25,886
84.027 Special Education_grants to States $21,285
84.424 Student Support and Academic Enrichment Program $16,432
84.173 Special Education_preschool Grants $6,771
32.009 Emergency Connectivity Fund Program $1,656
84.365 English Language Acquisition State Grants $1,022
84.425 Education Stabilization Fund $750
10.649 Pandemic Ebt Administrative Costs $628