CHARLESTON COUNTY SCHOOL DISTRICT

CONDITION: The School District used local exemptions in procuring certain costs related to goods and services funded through the ESSER program. CRITERIA: The South Carolina Department of Education (“SDE”) had issued a memorandum (“Memorandum”) in August 2023 notifying school districts that local exemptions could not be used in procurement activities related to federal programs. If a school district wanted to use noncompetitive procurements, they would need to (a) meet the exceptions noted in this Memorandum and as more fully detailed in Office of Management and Budget (“OMB”) 2 CFR 200.320 or (b) request and receive an approved waiver from the SDE on the “Request for Noncompetitive Procurement Approval” form. CRITERIA, CONTEXT AND EFFECT: The Office of Management and Budget’s (“OMB”) 2024 compliance supplement did not list in the compliance matrix a requirement to test the “Procurement and Suspension and Debarment” compliance requirement for this program. However, the SDE required that this compliance requirement be tested. The School District followed its approved procurement code which allowed the use of local exemptions for certain procurement activities. The School District’s auditors tested approximately $1,748,000 in key items related to the ESSER program and noted no exceptions. The School District’s auditors tested a random sample of 27 other ESSER expenditures and noted three procurements totaling approximately $137,000 that were procured using local exemptions. This known noncompliance extrapolated to the remaining random population resulted in projected noncompliance of approximately $892,000. The actual known or likely questioned costs is not determinable – as it would be difference between the costs paid and the costs that would have been paid if the contracts were competitively bid. CAUSE: The School District was not fully aware that using its local exemptions as provided for in its procurement code was not allowable for federal procurements. RECOMMENDATION: We recommend that the School District ensure that procurements related to federal programs do not use local exemptions and that these procurements provide for full and open competition. RESPONSE: The School District agrees with this finding and will adhere to the corrective action plan on page 15 in this compliance report. The District discovered this issue prior to the end of the Fiscal Year and made adjustments to the Procurement process between the Office of Federal Programs and Financial Services which now follows the SCDE's accepted practice for federal funds.

Federal Agency: U.S. Department of Education Pass-Through Agency: South Carolina Department of Education CFDA # 84.027A, 84.173A, 84.425D Pass-Through Grantor?s Award Numbers: H63010100921, H63010497520 Award Year: 2020-2021 Repeat Finding from Prior Year? No 2021-001: ALLOWABLE COSTS (PAYROLL DISBURSEMENTS) The School District did not obtain proper documentation of time and effort to support salaries expenditures charged to the IDEA and ESSER programs on a timely basis for the year ended June 30, 2021. The Uniform Guidance requires documentation of time and effort as support for salaries expenditures charged to federal programs. This documentation can be in the form of semiannual certifications for those employees charged 100% to a federal program or the documentation must show a daily breakdown of the employee?s time if the employee is allocated between programs. The District did not obtain the documentation of time and effort on a timely basis. This finding was the result of employee turnover and a lack of management oversight and review related to the time and effort requirement. We recommend that the School District prepare/obtain sufficient documentation of time and effort for all employees paid using federal funds, as required by the Uniform Guidance. The School District concurs. The School District will educate federal grant personnel about the timely documentation of time and effort requirement and obtain the documentation of time and effort for all federal program personnel.

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