Finding 980327 (2023-002)

Significant Deficiency
Requirement
F
Questioned Costs
$1
Year
2023
Accepted
2024-06-28

AI Summary

  • Core Issue: Controls were inadequate to ensure prior approval for capital expenditures related to equipment and property improvements.
  • Impacted Requirements: Compliance with 2 CFR 200.303, 200.313, and 200.439 regarding prior approval for expenditures over $5,000 was not met.
  • Recommended Follow-Up: Strengthen controls to ensure all capital expenditures receive necessary approvals before incurring costs.

Finding Text

Item 2023‐002 – Equipment and Real Property Management Education Stabilization Fund (ESF) ALN# 84.425 U.S. Department of Education Passed through the State Department of Education Grant period – Year ended September 30, 2023 (84.425U) (84.425D) Criteria – Grantees should have controls in place to ensure that all capital equipment or improvements to land, building, or equipment that were purchased with grant funds received prior approval prior to encumbrance of the expenditure. 2 CFR 200.303 requires the non‐Federal entity to “(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.” 2 CFR 200.313 and 2 CFR 200.439 requires that the following rules of allow ability must apply to equipment and other capital expenditures “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.” Condition – Adequate controls were not in place to ensure that prior approval for capital expenditures for equipment acquisition or improvements to land, buildings, or equipment was obtained prior to incurring the expenditure. Cause – Certain Capital Equipment and improvements to building expenditures were not included in the approved budget to grantor. There was a lack of sufficient controls over the review of capital expenditures to ensure that they were included in the approved budget. Effect – Lack of approval over equipment and capital improvements could lead to disallowed costs. We noted that certain equipment and improvement projects were not included in approved budget for ESSER Funds. Questioned Costs – $33,716 Recommendation – We recommend the strengthening of controls to ensure that proper approval is received prior to the acquisition of improvements to land, building or equipment. Management’s Response – The Board will strengthen the controls in place to provide assurance that proper approval is obtained from grantor agency prior to the purchase of equipment and real property.

Categories

Questioned Costs Equipment & Real Property Management Procurement, Suspension & Debarment

Other Findings in this Audit

  • 403882 2023-001
    Material Weakness Repeat
  • 403883 2023-001
    Material Weakness Repeat
  • 403884 2023-002
    Significant Deficiency
  • 403885 2023-002
    Significant Deficiency
  • 980324 2023-001
    Material Weakness Repeat
  • 980325 2023-001
    Material Weakness Repeat
  • 980326 2023-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.010 Title I Grants to Local Educational Agencies $657,819
10.555 National School Lunch Program $637,252
84.027 Special Education_grants to States $333,656
10.553 School Breakfast Program $254,241
84.041 Impact Aid $166,105
84.367 Improving Teacher Quality State Grants $125,413
12.357 Rotc Language and Culture Training Grants $53,815
10.555 Covid-19 National School Lunch Program $41,984
84.358 Rural Education $33,877
84.424 Student Support and Academic Enrichment Program $31,683
84.048 Career and Technical Education -- Basic Grants to States $29,406
84.173 Special Education_preschool Grants $17,255
84.365 English Language Acquisition State Grants $12,639
84.173 Covid-19 - Special Education_preschool Grants $5,213
84.027 Covid-19 - Special Education_grants to States $4,032
84.425 Covid-19 Education Stabilization Fund $1,828
96.001 Social Security_disability Insurance $120