Michigan Center School District

2021-001 - Cash Management Finding Type: Significant deficiency not considered to be a material weakness. Program: ESSER I (CFDA # 84.425D) Criteria: The ESSER I grant is a reimbursement grant. Grantees are required to minimize the amount of time that elapses between the receipt of the grant funds and the disbursement of funds by the grantee. Condition/Finding: The School District requested reimbursement of expenditures before expenditures were incurred. Cause: The ESSER I grant is a new grant to the School District. However, the School District was still required to adhere to its Cash Management of Grants Policy which requires that the School District?s payments minimize the time elapsing between the transfer of funds from the United States Treasury or the Michigan Department of Education and the disbursement by the School District. Effect: As a result of this condition, the School District collected $29,962.85 of ESSER I revenue before incurring the expenditure and disbursing the funds. Recommendation: The School District should consistently adhere to its Cash Management of Grants Policy and only request grant reimbursements after the budgeted / eligible expenditures have been incurred and within a reasonable timeframe from the final disbursement.

The District will revise its monthly financial reports to prevent purchase orders from being included, eliminating the illusion of payment of funds to assisting support staff. In addition, the District will review the Michigan Public School Accounting manual with all business office support staff on an annual basis to strengthen and better equip each staff member in their role for all public school finance needs.