Finding 2024-002
significant deficiencyquestioned costsother matters
- Program
- EDUCATION STABILIZATION FUND (84.425)
- Compliance requirement
- Activities allowed or unallowed; Allowable costs/cost principles
- Questioned costs
- $2,089 (known)
- FAC record
- FY2024 audit on fac.gov
Finding text from the filing
Finding: Allowable Costs and Allowable Activities
Federal Assistance Listing Number 84.425U – COVID-19 – Elementary and Secondary School Emergency Relief Fund (ESSER III)
Department of Education, Passed-Through Colorado Department of Education
Award Number – 4414/4431/9414; Award Year 2021
Criteria: According to 2 CFR Part 200.403 factors affecting allowability of costs – costs must meet the following general criteria in order to be allowable under Federal awards: (a) be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity, (d) be accorded consistent treatment, (e) be determined in accordance with generally accepted accounting principles, (f) to be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period and (g) be adequately documented. In addition, according to 2 CFR Part 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition: During our testing we noted the following: a. 3 out of the 25 payroll selections applied to the grant did not agree back to supporting payroll information. b. The indirect costs applied to the grant were not consistently applied between the quarters of the fiscal year due to variations in the indirect cost base used.
Questioned Costs: a. $2,089. Questioned costs were determined by reviewing the payroll registers for the three impacted selections. b. None. The District under applied the amount of indirect costs allowable to the grant.
Context: a. We tested 25 payroll, 25 nonpayroll and 25 fringe benefit transactions applied to the grant for the year ended June 30, 2024. The tested population covered expenditures of $7.1 million and the total population of expenditures were approximately $24.4 million. A non-statistical sampling methodology was used to select the sample.
b. We tested the four quarters indirect costs calculations which were applied to the above grant award numbers for the year ended June 30, 2024. The tested population covered expenditures of $3.0 million and the total population of expenditures were approximately $3.1 million. A non-statistical sampling methodology was used to select the sample.
Effect: The District did not have adequate internal controls in place over the ESSER grant which resulted in unallowable costs being applied to the grant and inconsistently applying indirect costs to the grant.
Cause: The District continued to experience turnover within the positions overseeing grants during fiscal year 2024. There were not detailed reviews over the calculations and supporting documentation used to determine the expenditure amount to be applied to the grant.
Identification as a Repeat Finding: Not applicable.
Recommendation: We recommend that the District strengthen the internal controls surrounding review of all expenditures applied against federal grants including the supporting detail or calculations used to determine the expenditure amount to help ensure it recalculates and is consistent with District polices and procedures.
Views of Responsible Officials: We agree with the finding. See separate report for planned corrective actions.