QUITMAN SCHOOL DISTRICTLocal Government

Material Weakness and Material NoncomplianceProgram: 20.019 ? COVID-19 ? Coronavirus Relief Fund84.425D ? Elementary and Secondary School Emergency Relief, I & II.Criteria: U. S. Code of Federal Regulations, Title 2, Subtitle A, Chapter II, Part200, Subpart D, section 200.313(d)(1) states that for equipmentpurchased with federal grant fund requires that property records mustbe maintained that include a description of the property, a serialnumber or other identification number, the source of funding for theproperty (including the federal award identification number), who holdstitle, the acquisition date, cost of the property, percentage of federalparticipation in the project costs for the federal award under which theproperty was acquired, the location, use and condition of the property,and any ultimate disposition data including the date of disposal andsales price of the property.Condition: The District?s monitoring activities element of its internal controlpolicy was inadequate to ensure that the District complied with itsinternal control policy, which requires all assets above a certainthreshold and others regardless of cost to be listed in its fixed assetsystem. As a result, we observed $1,494,446 in equipment purchasedwith federal grant funds that were not properly included in theDistrict?s fixed asset system.Cause: The District?s monitoring activities element of its internal controlsystem designed to ensure that the Fixed Asset Agent fulfilled therequirements of the current District internal control policy, ?Fixed(Capital) Asset Accountability? is inadequate.Effect orPotential Effect: Failure to follow the U. S. Code of Federal Regulations, Title 2,Subtitle A, Chapter II, Part 200, Subpart D, section 200.313(d)(1)could affect future eligibility for federal award programs. It also couldresult in a loss or misappropriation of public assets.QuestionedCosts: NoneRepeat Finding: NoRecommendation: We recommend that the District implement additional internal controlsto improve the monitoring activities element of its current internalcontrol system which will ensure that it fulfills the standards forFederal requirements of ?Equipment and Real Property Management?contained in the U. S. Code of Federal Regulations, Title 2, Subtitle A,Chapter II, Part 200, Subpart D, section 200.313(d)(1).Views of ResponsibleOfficials: The Auditee?s Corrective Action Plan on pages 80-81 lists theDistrict?s response to the finding.

Material Weakness and Material NoncomplianceProgram: 20.019 ? COVID-19 ? Coronavirus Relief FundCriteria: U. S. Code of Federal Regulations, Title 2, Subtitle A, Chapter II, Part200, Subpart D, section 200.344 states that the Federal awardingagency or pass-through entity will close out the Federal award when itdetermines that all applicable administrative actions and all requiredwork of the Federal award have been completed by the non-Federalentity. If the non-Federal entity fails to complete the requirements, theFederal awarding agency or pass-through entity will proceed to closeout the Federal award with the information available. This sectionspecifies the actions the non-Federal entity and Federal awardingagency or pass-through entity must take to complete this process at theend of the period of performance.U. S. Code of Federal Regulations, Title 2, Subtitle A, Chapter II, Part200, Subpart D, section 200.344(a) states that the recipient mustsubmit, no later than 120 calendar days after the end date of the periodof performance, all financial, performance, and other reports asrequired by the terms and conditions of the Federal award. Asubrecipient must submit to the pass-through entity, no later than 90calendar days (or an earlier date as agreed upon by the pass-throughentity and subrecipient) after the end date of the period of performance,all financial, performance, and other reports as required by the termsand conditions of the Federal award. The Federal awarding agency orpass-through entity may approve extensions when requested andjustified by the non-Federal entity, as applicable.Condition: The District?s monitoring activities element of its internal controlsystem was inadequate to ensure that the District fulfilled the Federalcompliance requirements for ?Reporting?, which required the Districtto close out its grants upon completion of grant activities.Cause: The District?s internal control system over the Federal compliancerequirement was insufficient and allowed the Grant Director to notfulfill the Federal compliance requirements for ?Reporting?.Effect orPotential Effect: Failure to follow the U. S. Code of Federal Regulations, Title 2,Subtitle A, Chapter II, Part 200, Subpart D, section 200.344 couldaffect future eligibility for Federal award programs and couldpotentially result in repayment of grant funds.QuestionedCosts: NoneRepeat Finding: NoRecommendation: We recommend that the District implement additional internal controlto improve the monitoring activities element of its internal controlsystem and ensure the District fulfills the standards for Federalrequirements of ?Reporting? contained in the U. S. Code of FederalRegulations, Title 2, Subtitle A, Chapter II, Part 200, Subpart D,section 200.344.Views of ResponsibleOfficials: The Auditee?s Corrective Action Plan on pages 80-81 lists theDistrict?s response to the finding.

Significant Deficiencies not considered to be Material Weaknesses nor Material Non-compliance: Finding 2018-001. Special Education Cluster- grants to states (84.027). Cost Principles. CONDITION: Personnel activity report forms available for employees who were working both under federal program administrative cost objectives and under non-federal administrative cost objectives (prorated employees) were incomplete. The school district has opted to document personnel expenses for prorated employees through the use of personnel activity reports. A review of the federal award?s two prorated employees? reports revealed missing reports for certain months and prepared reports that were not signed by a direct supervisor. For employees working under a single cost objective, we noted semi-annual certifications that were properly prepared but not signed by a direct supervisor. CRITERIA: Standards for documentation of personnel expenses under the Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) require that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must, in addition to other requirements, reasonably reflect the total activity for which the employee is compensated, encompass both federally assisted and all non-federal activities compensated by the district, comply with the established accounting policies and practices of the district., and support the distribution of the employee?s salary or wages among specific activities or cost objects if the employee works on a federal award and in a non-federal area. Budget estimates alone do not qualify as support for charges to federal awards. The school district may, in lieu of using the guidance spelled out above, develop its own system of substantiating time and compensation charged to a federal award as long as all the cost substantiation objectives are met. CAUSE: The cause is likely a failure to monitor and perform a reconciliation of time charged to the grant with actual percentages worked. EFFECT: The effect is noncompliance with the standards for documentation of personnel expenses under the Uniform Guidance. QUESTIONED COSTS: None RECOMMENDATION: We recommend that the district maintain records that meet the standards for documentation of personnel expenses under the Uniform Guidance. Current district fiscal policies should be reviewed for alignment with the Uniform Guidance.