Finding Text
Criteria :The District should have established internal control policies and procedures surrounding the administration of federal grants which address each federal award’s compliance requirement on an annual basis. This should include the ensuring original approved grants are amended in accordance with activities for which expenditures are incurred (activities allowed). Established procedures should ensure that established policies and procedures surrounding grants administration ensure that activity associated with approved grants is accurately classified and posted as incurred. Moreover, all grant reporting should be formally reconciled with underlying accounting records and performed within appropriate period (reporting). Condition: During our current year audit and consideration of subsequent activity (fiscal year 2024) associated with the ESSER grants, we noted the District utilized remaining ESSER II and ESSER III funds as funding sources for the approved renovation of the high school media center. While capital expenditures may be incurred with ESSER funds, requirements are that capital expenditures must be approved. Based upon our audit, we noted no amendment requests had been filed related to the ESSER grants. Additionally, we noted final grant reports associated with all grants tested were not clearly reconciled to the underlying accounting records. Based upon our testing of expenditures, we noted certain salaries attributable to the grant (approximately $194,000) were adjusted from other nonfederal grant (wellness grant) via journal entry. We noted the final grant report associated with the ESSER II (#115) has not been filed. Additionally, we noted the other final grant reports were not filed with the 60 days after the grant period ended. Cause: The District’s policies and procedures currently do not ensure ongoing monitoring and amendments (as applicable) after the initial grant submission and approval with subsequent changes and reconciliations with the underlying accounting records. Potential Effect: Costs may be disallowed. Furthermore, noncompliance with specific compliance requirements applicable to a federal award could occur. Questioned Costs: $59,067. This represents the payments to the architect for the renovation project during fiscal year 2023, charged to the ESSER II grant during fiscal year 2023 (#115).Repeat Finding: There was a finding reported in the prior year related to grant budget amendments and reconciliation to the underlying accounting records. (2022-001). Auditor’s recommendation:The District had not been subject to the Single Audit threshold of expenditures of $750,000 or more on an annual basis prior to fiscal year 2021, primarily as a result of COVID-19 pandemic related funding. The District had established general procedures surrounding administration of grant awards in accordance with District processes and proposed pass-through agency procedures during 2023. In our professional opinion, the District should review and enhance establish policies and procedures surrounding the administration of federal grants and award programs. Such enhancements should include, but not be limited to additional procedures to ensure identification of federal grant programs, review and documentation of annual compliance requirements of all grants received and a centralized monitoring/amendments related thereto. We recommend grants managers be involved in the ongoing monitoring of each awarded grant, ensuring activity is charged to appropriate grants as incurred and funds are drawn on a reimbursement basis to ensure minimal amount of time District is in receipt of the federal funds . Additionally, we recommend additional review and approval of journal entries posted within the accounting system through grants managers and officials reclassifying from original postings and approvals.