Roanoke City Public SchoolsLocal Government

CORRECTIVE ACTION PLAN February 23, 2021 The School Board of the City of Roanoke, Virginia respectfully submits the following corrective action plan for the year ended June 30 2020. Name and address of independent public accounting firm: Brown, Edwards & Company, L.L.P. 319 McClanahan St. SW Roanoke, VA 24014 Audit period: June 30, 2020 The findings from the June 30, 2020 Schedule of Findings and Questioned Costs (the "Schedule") are discussed below. The findings are numbered consistently with the number assigned in the Schedule. FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARD PROGRAM AUDIT 2020-001: Coronavirus Relief Fund - CFDA No. 21.019 Allowable Costs (Continued) Condition: One payroll disbursement included in expenditures submitted under the program contained a portion of the employer's share of an employee's health insurance premium. This expenditure was not in response to the COVID-19 pandemic and the allocation method was not consistently applied to all employees that responded to COVID-19. Criteria: Costs submitted under the program must be in response to the COVID-19 pandemic and follow a reasonable allocation method, if appropriate. Cause: This was caused by lack of management oversight. Effect: The ineligible expenditure was submitted under the program. Recommendation: We recommend that only eligible disbursements be included in the submissions. Views of Responsible Officials and Planned Corrective Action (unaudited): School divisions were notified on October 9, 2020, via Virginia Department of Education Superintendent ' s Memo , that Coronavirus Relief Funding (CRF) was being awarded to school divisions to cover costs incurred between March 1 and December 30, 2020. Management attended all training sessions made available by the Virginia Department of Education on the allowable uses of CRF funding, and also reviewed guidance issued federally by the U.S. Department of the Treasury. Roanoke City Public Schools ' accounting staff separately identified all costs to be claimed out of CRF funding and worked diligently to carefully document all costs related to the Coronavirus response that were to be claimed for reimbursement out of these funds. Management commends the RCPS Accounting Department staff for their care and attention to accurately document and report these expenses. The $88.68 cost in question , which represents only a fraction of a percent of the total award amount , resulted from an automatic application of employee benefit costs by the division ' s Enterprise Resource Planning (ERP) system to all jobs, including the pandemic-response work, of the employee in question. This happened because the employee made a change to their benefits during this period, so the manual adjustment that was needed resulted in the difference being applied to all of their jobs and not just their main job. Because this was a new cost, not previously budgeted, and because we confirmed with the Virginia Department of Education that employee benefits are allowable, and given the immateriality of the amount, no adjustment was made to remove this cost from the grant. Management acknowledges that the Auditor has questioned this cost due to the fact that employee benefit costs were not consistently applied to the grant across all employees who provided work in response to the pandemic. RCPS began using a new ERP system in 2019-20. That system allows the user to identify what jobs do and do not earn certain fringe benefits. This is an improvement over the former system which automatically divided the employer share of fringe benefit cost across all jobs or extra duty performed by the employee. However, as we found in this instance, when changes are made mid-year, there is the chance that the adjustment could inadvertently be applied to all jobs. Management is working with the ERP system vendor to further automate processes to avoid this issue in the future, and has also shared information with Human Resources and Payroll staff who are responsible for setting up or making changes to employee benefit elections, to ensure they know where in the system to double check the set up to make sure fringe benefits are only applied to the applicable jobs of each employee. RCPS accounting staff will review the fringe benefit information coded to any future Coronavirus Federal aid received and confirm its appropriateness prior to submitting for reimbursement. Respectfully Submitted, Kathleen M. Jackson, MBA, SFO Chief Financial Officer