Lincoln County Board of Education

Activities Allowed or Unallowed 2020-011 Grant Title: Title I Grants to Local Educational Agencies Federal Award Number and Year: CFDA #: 84.010 - 2020 Federal Agency: US Department of Education Pass-through Entity number: 41 Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved with a purchase order. In addition, invoices or other supporting documentation were not available for all expenditures. CONTEXT: Specifically, we tested the following expenditures: Thirty non-payroll expenditure transactions were sampled for Title I Grants to Local Educational Agencies. One expenditure, or 2% of the sample size, in which the purchase order was dated after the services were provided. Eight expenditures, or 27% of the sample size, in which the original purchase order was not available for review. Four expenditures, or 13% of the sample size, in which the invoice nor the purchase order were available for review. Three expenditures, or 10% of the sample size, in which the purchase order was not revised to match the actual amount spent. CRITERIA: Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) ?200.334 states in part that: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices were maintained for all expenditures and that each expenditure was properly approved with a purchase order. EFFECT: Auditors were unable to determine the allowability of certain expenditures and controls over purchase orders were not adequate to prevent and detect unauthorized disbursements. This issue necessitated a qualification of opinion on compliance for the Title I Grants to Local Educational Agencies Program. Additionally, this issue, in combination with other issues related to expenditures, necessitated a qualification of audit opinion on the financial statements. See Finding 2020-003 in Section II REPEAT FINDING: No RECOMMENDATION: Board officials should establish procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, All expenditures be less than the remaining amount on their corresponding blanket purchase orders, Each expenditure be coded in accordance with the Board of Education's chart of accounts, and Contracts for contracted services be available for review. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: See Corrective Action Plan.

Allowable Costs 2020-012 Grant Title: Title I Grants to Local Educational Agencies Federal Award Number and Year: 2020 CFDA #: 84.010 Federal Agency: US Department of Education Pass-through Entity number: 41 Pass-through Agency: WV Department of Education Grant Title: Supporting Effective Instruction State Grants (formerly improving Teacher Quality State Grants) Federal Award Number and Year: 2020 CFDA #: 84.367 Federal Agency: US Department of Education Pass-through Entity number: 40 Pass-through Agency: WV Department of Education CONDITION: We determined during our audit that there was not adequate documentation to support personnel costs charge to the Title I Grants to Local Educational Agencies (Title I) and Supporting Effective Instruction State Grants (formerly improving Teacher Quality State Grants) (Title II) programs. CRITERIA: Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Appendix XI Part 3 Section B states in part that: ?...Time-and-effort requirements in schoolwide program schools vary under different circumstances.""(2) If a school operating a schoolwide program does not consolidate federal funds with state and local funds in a consolidated schoolwide pool, an employee who works, in whole or in part, on a federal program or cost objective must document time and effort as follows.." "...(b) For an employee who works on multiple activities or cost objectives (e.g., in part on a federal program whose funds have not been consolidated in a consolidated schoolwide pool and in part on federal programs supported with funds consolidated in a schoolwide pool or on activities that are not part of the same cost objective), an LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: (i) The federal program or cost objective; and (ii) Each other program or cost objective supported by consolidated federal funds or other revenue sources." QUESTIONED COSTS: Title I Grants to Local Educational Agencies: Time and effort records were inspected for all employees whose time was allocated to more than one cost objective and were paid from Title I awards. Amounts charged to the Title I program for these employees totaled $134,992. Questioned costs from this population totaled $33,800. Costs were considered questioned when time and effort reports did not identify those costs as relating to the Title I program cost objectives. Supporting Effective Instruction State Grants (formerly improving Teacher Quality State Grants): Time and effort records were inspected for all employees whose time was allocated to more than one cost objective and were paid from Title II awards. Amounts charged to the Title II program for these employees totaled $87,349. Questioned costs from this population totaled $87,349. Costs were considered questioned when time and effort reports did not identify those costs as relating to the Title II program cost objectives. CAUSE: Management did not have adequate control procedures in place to ensure that project codes were updated and time and effort records were verified to the percentage of salary charged to Title I and Title II programs. EFFECT: Payroll expenses charged to the Title I and Title II programs are not adequately supported. This necessitated a qualification of opinion for the Title I and Title II programs. REPEAT FINDING: No RECOMMENDATIONS: Management should establish procedures that ensure all payroll expenditures are supported by appropriate time and effort records that are regularly reconciled to cost objective charges. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: See Corrective Action Plan.

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