City of Orange Township Public SchoolsLocal Government

During our testing of the ARP ESSER Program, we identified the District was unable to provide support for payroll charges for eight employees, two employees were paid in excess of the board approved maximum and several payroll expenditures did not agree to the support provided. During our testing of Federal grant compliance, we selected a sample of payroll charges submitted for reimbursement and traced to supporting documentation. The District board approves salaried individuals to be charged to the grant, board approves hourly rates and stipends to be charged to the grant and maintains paper timesheets for hourly and stipend employees. The District was unable to provide us with any support that the eight employees identified in our testing were appropriately charged to the grant. The District provided support that two individuals were approved to be paid a maximum amount from the grant. Per review of payroll charges of the grant for the two individuals identified they were paid in excess of the maximum amount approved.

Condition: The final federal expenditure reports remitted to the State Department of Education were not in agreement with the District?s underlying financial records Criteria: Financial reports submitted are in agreement with the Districts financial records and are accurate. Questioned Cost: NONE Effect: Reported amounts are not in agreement with the Districts financial records. Cause: Failure of Management to implement procedures and controls to ensure the amounts reported agree with the underlying financial records. Identification of Repeat Finding: NONE Recommendation: That all final Federal and State expenditure reports agree to the underlying financial records of the district.

Condition: A detailed Capital Asset Report was not available at the time of audit. Accounting Principles Generally Accepted in the United States of America (US GAAP) and the Uniform Chart of Accounts requires a fixed asset ledger be maintained to record the historical cost and the capitalization of costs associated with the acquisition or construction of property, plant and equipment (PPE). Criteria: Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e) which require that: 1. Equipment, including replacement equipment, be used in the program or project for which it was acquired as long as needed, whether or not the project or program continues to be supported by the federal award or, when appropriate, under other federal awards; however, the non-federal entity must not encumber the equipment without prior approval of the federal awarding agency (2 CFR sections 200.313(c) and (e)). 2. Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). 3. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). 4. A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated (2 CFR section 200.313(d)(3)). 5. Adequate maintenance procedures must be developed to keep the property in good condition (2 CFR section 200.313(d)(4)). Questioned Cost: NONE Effect: The District is unable to account for equipment purchased with grant funds.