Carman-Ainsworth Community SchoolsLocal Government

Program: Child Nutrition Cluster, U.S. Department of Agriculture, 10.553 & 10.555, Federal Award #: 241970, 251970, 241960, 251960 Criteria: The School District should maintain internal controls to document salaries and wages that accurately reflect the expenditures incurred and work performed based on Uniform Guidance. The internal controls should provide reasonable assurance that the charges are accurate, allowable, and properly allocated as to account and period. Questioned Costs: $2,684 Condition: The School District’s support for the payroll indicated that an incorrect amount was paid for transactions charged to the Food Service Fund. The School District paid 3 of the sample of 40 for payroll testing, the incorrect amount of hours for the employees selected payroll transaction and overall, the 3 items noted were undercharged. Cause and Effect: Failure to properly review balances and reconcile payroll registers for individual pays. This led to employees being paid the incorrect amounts during the fiscal year. Recommendation: We recommend management implement procedures to ensure all expenditures are being paid to employees allocated to the program are correct for rates of pay and actual hours worked. Views of Responsible Officials: Management agrees with the finding. Corrective Action Plan: See attached corrective action plan.

During the testing of controls over payroll processing, an employee in the sample was being paid in excess of the contractually approved amount. The District could not provide a rationale or support for wages in excess of the approved contract being paid to a staff charged fully to the Early Head Start grant program.

Section III - Federal Award Findings and Questioned Costs 2022-006 Cash Management Finding Type: Significant Deficiency in Internal Controls Over Compliance Program Names: rock and roll hall of fame fan votes Criteria: Cash management principles require that costs are incurred before reimbursement is requested, or related cost disbursements are made shortly after the grant draw down is received. The grant reimbursement should be based on actual costs as evidenced by actual invoices, general ledger detail, or other supporting data. Condition: The District did not maintain supporting documentation for interim grant drawdowns made during the year. Grant revenues were not reconciled with general ledger grant expenditures until year end. When reconciled at year end, $3,505 was overdrawn and due back to the State of Michigan. Context: The District did not have a system in place to properly support grant drawdowns made on an interim basis during the year. As a result interim grant drawdowns may not have reflected actual cash disbursements incurred before or shortly after the drawdown. Cause: The District did not have a system in place to properly support grant drawdowns made on an interim basis during the year. Effect: Audit adjustments were required at year end to record amounts due back to the State for overdrawn grant reimbursements. Questioned Costs: None Recommendation: The District should base interim grant draw downs on actual general ledger expenditures and other supporting data and maintain that documentation to support the drawdown amount. View of Responsible Officials: Assistant Superintendent will approval all drawdowns and record documentation in grant notebook

2021-001 Cash Management Finding Type: Material noncompliance; material weakness in internal controls over compliance Program Names: Elementary and Secondary School Emergency Relief (ESSER) Fund (CFDA 84.425D) Criteria: Compliance with cash management requires that when grant program activities are funded on a reimbursement basis, program costs must be funded by available entity resources before reimbursement amounts are requested from the federal government. Condition: The District requested cash reimbursements in excess of program expenditures for the ESSER program. Context: Cash drawdowns for the ESSER program exceeded expenditures for one transaction/event. Cause: Certain program costs were fully funded through grant reimbursement drawdowns when initially purchased. Subsequent to the purchase date, the District received a federally funded rebate of $153,318 based on the purchase price. Future cash requests were not reduced by the amount of the rebate received, and cash was drawn down in excess of expenditures for the ESSER program. Effect: The District was not in compliance with cash management criteria for the ESSER program. Questioned Costs: None Recommendation: The District should ensure that program costs/activities are specifically identified with the federal funding source from which the reimbursement is requested to ensure grant reimbursement requests are net of other federal program revenues or rebates restricted for the same purpose. View of Responsible Officials: The District is in the process of implementing improved procedures to ensure that grant reimbursement requests are for specific program costs generated by program activities.

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