Ashland Independent School District

2020-006 Federal Compliance - Overspent Budget Federal Program Name: Special Education Cluster and Head Start Catalog of Federal Domestic Assistance Number: 84.027 & 84.173 and 93.600 Federal Agency: U.S. Department of Education and U.S. Department of Health and Human Services Compliance Requirement: Allowable Costs Criteria: In accordance with 2 Code of Federal Regulations (CFR) Section 225, Appendix A,C.1.c., costs charged to federal programs should be authorized based on awards. Condition: As described in Finding 2020-003, we noted inaccurate budgets entered on several projects, including the Special Education Cluster and Head Start, and expenditures in excess of the budget entered resulting in expenditures needing to be transferred to the General Fund. Cause: There was a lack of review performed to ensure the accuracies of project budget reports by the former Finance Director. Effect: Program funds were potentially used for an unallowable purpose. Questioned Costs: None, however $321,003 of costs for the Special Education Cluster were transferred to the General Fund and $160,341 of costs for Head Start were transferred to the General Fund due to the overspending. Repeat Finding: No. Recommendation: We recommend that the Finance Director and/or grant directors review monthly project budget reports to ensure all costs are allowable and not exceeding the budgets. Management's Response: The District has begun semi-monthly staff meetings with directors and those with special revenue fund involvement to review all open special revenue funds to ensure effective and efficient use of funds and cleanup any outstanding issues. Additionally, the new finance director will be trained to ensure all funds are properly maintained.