Finding Text
Finding Number: 2022-001Prior Year Finding: 2021-005Federal Agency: U.S. Department of the TreasuryU.S. Department of EducationFederal Program: COVID-19 -Coronavirus State and Local Fiscal Recovery FundsCOVID-19 - Education Stabilization FundSupporting Effective Instruction State Grants (formerlyImproving Teacher Quality State Grants)Assistance Listing: 21.027, 84.425C,D,U,W, 84.367Pass-Through Entity: Maryland State Department of EducationPass-Through AwardNumber and Period:211838-01 (3/3/21 ? 12/31/24) 211815-01 (3/3/21 ? 12/31/24)211875-01 (3/3/21 ? 12/31/24) 201873-01 (3/13/20 ? 9/30/22)201787-01 (3/13/20 ? 9/30/22) 202233-01 (3/13/20 ? 9/30/22)191360-01 (7/1/18 ? 9/30/21) 201067-01 (7/1/19 ? 9/30/21)210781-01 (7/1/20 ? 6/30/22) 221052-01 (7/1/21 ? 6/30/23)Compliance Requirement: ReportingType of Finding Significant Deficiency in Internal Control over Compliance, OtherMattersCriteria or Specific Requirement:Compliance: Per 2 CFR section 200.302(b), financial management systems of non-Federal entitiesmust provide for accurate, current, and complete disclosure of the financial results of each Federalaward or program in accordance with program reporting requirements and provide records that identifyadequately the source and application of funds for federally funded activities. Per Part L of the OMBCompliance Supplement, financial reports must include all activity of the reporting period, be supportedby applicable accounting or performance records, and be fairly presented in accordance with governingrequirements.Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effectiveinternal control over the Federal award that provides reasonable assurance that the non-federal entityis managing the federal award in compliance with federal statutes, regulations, and the terms andconditions of the federal award. These internal controls should comply with the guidance in "Standardsfor Internal Control in the Federal Government" issued by the Comptroller General of the United Statesor the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizationsof the Treadway Commission (COSO). Condition/Context:The Board is required to submit monthly Financial Status Reports (FSR) to the Maryland StateDepartment of Education (MSDE). MSDE utilizes these reports as reimbursement requests andsubsequently submits payment to the board based on reported expenditures. The Final September2021 FSR and its related supporting documentation/reconciliations were not retained. Specifically, wenoted the following:? Education Stabilization Fund: 3 out of 23 grants; 1 out of 5 months? Coronavirus State and Local Fiscal Recovery Fund: 3 out of 16 grants; 1 out of 5 months? Supporting Effective Instruction State Grants: 4 out of 11 grants; 1 out of 3 monthsQuestioned Costs:Undetermined, due to lack of documentation.Cause:The Final September 2021 FSR Reimbursement Request and supporting documentation used toprepare it was not retained.Effect:The lack of reconciliations performed on the differences between the monthly FSR & GL Detail couldresult in inaccurate amounts reported and received for the Federal programs. In addition, the Board didnot have supporting documentation to show controls were in place over expenditure reporting andreimbursement requests.Recommendation:We recommend that the Board review its policies and procedures to ensure that ReimbursementRequests and the detail & accompanying reconciliations used to prepare it are retained for auditpurposes.Views of responsible officials:Management agrees with the finding.