Finding Text
"U.S. DEPARTMENT OF EDUCATION
PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION
EDUCATION STABILIZATION FUND - AL NUMBERS 84.425D AND 84.425U
PASS-THROUGH NUMBER 5403
AUDIT PERIOD - YEAR ENDED JUNE 30, 2023"
2023-001. Equipment and Real Property Management
Criteria or specific requirement: Purchases of real property and/or construction for improvements require the prior written approval of the Federal awarding agency or pass-through entity, as specified in OMB 2 CFR section 200.439.
Condition: During our examination of real property and construction improvements from the Education Stabilization Fund, we identified a facilities improvement project that was denied prior approval of Education Stabilization funding by the Arkansas Division of Elementary and Secondary Education. Expenditures paid from Education Stabilization Fund for this project totaled $622,511.
Cause: Lack of internal controls and management oversight over program expenditures.
Effect or potential effect: Unallowable costs of $622,511 were paid from COVID-19-Education Stabilization Fund.
Questioned costs: The amount of questioned costs was $622,511.
Context: Examination of all payments for construction for improvements to land, buildings, and equipment totaling $1,577,417.
Identification as a repeat finding: No
Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The issue related to this finding is being resolved by reclassifying the fund to the appropriate fund source. The District sought the guidance of Division of Elementary and Secondary Education (DESE) to confirm the reclassification along with returning the funds to the Arkansas Department of Education. A system of checks and balances has been established for approval of all purchases including contract services.