Audit 300666

2023 – 001 Allowable Costs Federal Agency: U.S. Department Education Federal Program Name: Charter School Program Assistance Listing Number: 84.282 Pass-Through Agency: Indiana Department of Education Pass-Through Number(s): 72229, S282D190002 Award Period: July 1, 2022 – June 30, 2023 Type of Finding:  Material Weakness in Internal Control over Compliance  Material Noncompliance Criteria or specific requirement: The Compliance Supplement requires that compensation for personal services be charged to the federal grant based upon approved actual time worked on the program and not based on an allocation or budget (2 CFR 200.430(i)). Condition: While performing audit procedures, it was noted that payroll expenses were charged to the grant program based upon an allocation from the budget and not on approved and/or certified time worked in the program. Questioned costs: $356,845 Context: During the process of obtaining an understanding of internal controls and processing of payroll expenditures, we noted payroll was not reviewed to ensure the expense charged to the grants was accurate based upon approved actual time spent in the program and accurate pay rates. Cause: Salary figures for salaried employees were charged to the federal grant based on unapproved work actually performed for the program and inaccurate pay rates were utilized for overtime and an employee transition to full time. Effect: The organization has not fully followed compliance attributes with the allowable costs principles set forth by the Compliance Supplement related to allocation of salaries being charged based on approved time worked for a program. Personnel need to reinforce policies to ensure control procedures are in place to ensure salaries charged to a grant are appropriately based on actual approved time worked in a program. Repeat Finding: No. Recommendation: We recommend the School ensure policies and procedures for payroll expenditures for grant programs be charged to the federal grant based on approved hours worked in the program. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 001 Allowable Costs Federal Agency: U.S. Department Education Federal Program Name: Charter School Program Assistance Listing Number: 84.282 Pass-Through Agency: Indiana Department of Education Pass-Through Number(s): 72229, S282D190002 Award Period: July 1, 2022 – June 30, 2023 Type of Finding:  Material Weakness in Internal Control over Compliance  Material Noncompliance Criteria or specific requirement: The Compliance Supplement requires that compensation for personal services be charged to the federal grant based upon approved actual time worked on the program and not based on an allocation or budget (2 CFR 200.430(i)). Condition: While performing audit procedures, it was noted that payroll expenses were charged to the grant program based upon an allocation from the budget and not on approved and/or certified time worked in the program. Questioned costs: $356,845 Context: During the process of obtaining an understanding of internal controls and processing of payroll expenditures, we noted payroll was not reviewed to ensure the expense charged to the grants was accurate based upon approved actual time spent in the program and accurate pay rates. Cause: Salary figures for salaried employees were charged to the federal grant based on unapproved work actually performed for the program and inaccurate pay rates were utilized for overtime and an employee transition to full time. Effect: The organization has not fully followed compliance attributes with the allowable costs principles set forth by the Compliance Supplement related to allocation of salaries being charged based on approved time worked for a program. Personnel need to reinforce policies to ensure control procedures are in place to ensure salaries charged to a grant are appropriately based on actual approved time worked in a program. Repeat Finding: No. Recommendation: We recommend the School ensure policies and procedures for payroll expenditures for grant programs be charged to the federal grant based on approved hours worked in the program. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 002 Procurement Federal Agency: U.S. Department Education Federal Program Name: Charter School Program Assistance Listing Number: 84.282 Pass-Through Agency: Indiana Department of Education Pass-Through Number(s): 72229, S282D190002 Award Period: July 1, 2022 – June 30, 2023 Type of Finding:  Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Tile 2, Subtitle A, Chapter 2 Part 200, Subpart D, section 200.318 of the Code of Federal Regulations requires organizations to have a written procurement policy that includes certain requirements as it relates to procuring good and services using federal dollars. Additionally, 2 CFR 180.995 requires that the organizations have a written policy where organizations should perform a check to ensure vendors are not debarred. Condition: During our testing, it was noted that the School has a written procurement policy in place, however, the policy does not meet the federal requirements for procurement of goods and services using federal dollars. Questioned costs: None Context: The School did not have appropriate policy in place that met the procurement federal requirements. Cause: The School’s policy has not been updated to meet the federal requirement as this was the School’s first year for federal compliance requirements. Effect: Without written policies that adhere to the federal regulations, it is likely that required steps in the process may be missed. Repeat finding: No. Recommendation: We recommend that the School review their Procurement policy and ensure that all missing federal requirements are included in their written policies. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 002 Procurement Federal Agency: U.S. Department Education Federal Program Name: Charter School Program Assistance Listing Number: 84.282 Pass-Through Agency: Indiana Department of Education Pass-Through Number(s): 72229, S282D190002 Award Period: July 1, 2022 – June 30, 2023 Type of Finding:  Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Tile 2, Subtitle A, Chapter 2 Part 200, Subpart D, section 200.318 of the Code of Federal Regulations requires organizations to have a written procurement policy that includes certain requirements as it relates to procuring good and services using federal dollars. Additionally, 2 CFR 180.995 requires that the organizations have a written policy where organizations should perform a check to ensure vendors are not debarred. Condition: During our testing, it was noted that the School has a written procurement policy in place, however, the policy does not meet the federal requirements for procurement of goods and services using federal dollars. Questioned costs: None Context: The School did not have appropriate policy in place that met the procurement federal requirements. Cause: The School’s policy has not been updated to meet the federal requirement as this was the School’s first year for federal compliance requirements. Effect: Without written policies that adhere to the federal regulations, it is likely that required steps in the process may be missed. Repeat finding: No. Recommendation: We recommend that the School review their Procurement policy and ensure that all missing federal requirements are included in their written policies. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 001 Allowable Costs Federal Agency: U.S. Department Education Federal Program Name: Charter School Program Assistance Listing Number: 84.282 Pass-Through Agency: Indiana Department of Education Pass-Through Number(s): 72229, S282D190002 Award Period: July 1, 2022 – June 30, 2023 Type of Finding:  Material Weakness in Internal Control over Compliance  Material Noncompliance Criteria or specific requirement: The Compliance Supplement requires that compensation for personal services be charged to the federal grant based upon approved actual time worked on the program and not based on an allocation or budget (2 CFR 200.430(i)). Condition: While performing audit procedures, it was noted that payroll expenses were charged to the grant program based upon an allocation from the budget and not on approved and/or certified time worked in the program. Questioned costs: $356,845 Context: During the process of obtaining an understanding of internal controls and processing of payroll expenditures, we noted payroll was not reviewed to ensure the expense charged to the grants was accurate based upon approved actual time spent in the program and accurate pay rates. Cause: Salary figures for salaried employees were charged to the federal grant based on unapproved work actually performed for the program and inaccurate pay rates were utilized for overtime and an employee transition to full time. Effect: The organization has not fully followed compliance attributes with the allowable costs principles set forth by the Compliance Supplement related to allocation of salaries being charged based on approved time worked for a program. Personnel need to reinforce policies to ensure control procedures are in place to ensure salaries charged to a grant are appropriately based on actual approved time worked in a program. Repeat Finding: No. Recommendation: We recommend the School ensure policies and procedures for payroll expenditures for grant programs be charged to the federal grant based on approved hours worked in the program. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 001 Allowable Costs Federal Agency: U.S. Department Education Federal Program Name: Charter School Program Assistance Listing Number: 84.282 Pass-Through Agency: Indiana Department of Education Pass-Through Number(s): 72229, S282D190002 Award Period: July 1, 2022 – June 30, 2023 Type of Finding:  Material Weakness in Internal Control over Compliance  Material Noncompliance Criteria or specific requirement: The Compliance Supplement requires that compensation for personal services be charged to the federal grant based upon approved actual time worked on the program and not based on an allocation or budget (2 CFR 200.430(i)). Condition: While performing audit procedures, it was noted that payroll expenses were charged to the grant program based upon an allocation from the budget and not on approved and/or certified time worked in the program. Questioned costs: $356,845 Context: During the process of obtaining an understanding of internal controls and processing of payroll expenditures, we noted payroll was not reviewed to ensure the expense charged to the grants was accurate based upon approved actual time spent in the program and accurate pay rates. Cause: Salary figures for salaried employees were charged to the federal grant based on unapproved work actually performed for the program and inaccurate pay rates were utilized for overtime and an employee transition to full time. Effect: The organization has not fully followed compliance attributes with the allowable costs principles set forth by the Compliance Supplement related to allocation of salaries being charged based on approved time worked for a program. Personnel need to reinforce policies to ensure control procedures are in place to ensure salaries charged to a grant are appropriately based on actual approved time worked in a program. Repeat Finding: No. Recommendation: We recommend the School ensure policies and procedures for payroll expenditures for grant programs be charged to the federal grant based on approved hours worked in the program. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 002 Procurement Federal Agency: U.S. Department Education Federal Program Name: Charter School Program Assistance Listing Number: 84.282 Pass-Through Agency: Indiana Department of Education Pass-Through Number(s): 72229, S282D190002 Award Period: July 1, 2022 – June 30, 2023 Type of Finding:  Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Tile 2, Subtitle A, Chapter 2 Part 200, Subpart D, section 200.318 of the Code of Federal Regulations requires organizations to have a written procurement policy that includes certain requirements as it relates to procuring good and services using federal dollars. Additionally, 2 CFR 180.995 requires that the organizations have a written policy where organizations should perform a check to ensure vendors are not debarred. Condition: During our testing, it was noted that the School has a written procurement policy in place, however, the policy does not meet the federal requirements for procurement of goods and services using federal dollars. Questioned costs: None Context: The School did not have appropriate policy in place that met the procurement federal requirements. Cause: The School’s policy has not been updated to meet the federal requirement as this was the School’s first year for federal compliance requirements. Effect: Without written policies that adhere to the federal regulations, it is likely that required steps in the process may be missed. Repeat finding: No. Recommendation: We recommend that the School review their Procurement policy and ensure that all missing federal requirements are included in their written policies. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 002 Procurement Federal Agency: U.S. Department Education Federal Program Name: Charter School Program Assistance Listing Number: 84.282 Pass-Through Agency: Indiana Department of Education Pass-Through Number(s): 72229, S282D190002 Award Period: July 1, 2022 – June 30, 2023 Type of Finding:  Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Tile 2, Subtitle A, Chapter 2 Part 200, Subpart D, section 200.318 of the Code of Federal Regulations requires organizations to have a written procurement policy that includes certain requirements as it relates to procuring good and services using federal dollars. Additionally, 2 CFR 180.995 requires that the organizations have a written policy where organizations should perform a check to ensure vendors are not debarred. Condition: During our testing, it was noted that the School has a written procurement policy in place, however, the policy does not meet the federal requirements for procurement of goods and services using federal dollars. Questioned costs: None Context: The School did not have appropriate policy in place that met the procurement federal requirements. Cause: The School’s policy has not been updated to meet the federal requirement as this was the School’s first year for federal compliance requirements. Effect: Without written policies that adhere to the federal regulations, it is likely that required steps in the process may be missed. Repeat finding: No. Recommendation: We recommend that the School review their Procurement policy and ensure that all missing federal requirements are included in their written policies. Views of responsible officials: There is no disagreement with the audit finding.