FINDING 2022-001Subject: Child Nutrition Cluster - Internal ControlsFederal Agency: Department of AgricultureFederal Programs: School Breakfast Program, National School Lunch Program, SummerFood Service Program for Children, Fresh Fruit and Vegetable ProgramAssistance Listings Numbers: 10.553, 10.555, 10.559, 10.582Federal Award Numbers and Years (or Other Identifying Numbers): FY22Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Finding: Material WeaknessCondition and ContextAn effective internal control system was not in place at the School Corporation in order to ensurecompliance with requirements related to the grant agreement and the Reporting compliance requirement.The School Corporation failed to properly implement a review of the reimbursement request prepared and submitted to the Indiana Department of Education. Although, one employee compiled andentered the necessary information into the reimbursement request, and the Director of Food Servicesreviewed and submitted the request, the Director's signature or other corroborating evidence was notalways present. Of the 24 reimbursement requests submitted, 11 did not contain the Director's signatureor other corroborating evidence that the request had been reviewed.The lack of internal controls was isolated to fiscal year 2021-2022.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the grant agreement and the Reporting compliance requirement.EffectThe failure to establish an effective internal control system placed the School Corporation at risk ofnoncompliance with the grant agreement and the Reporting compliance requirement.INDIANA STATE BOARD OF ACCOUNTS16MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-001Subject: Child Nutrition Cluster - Internal ControlsFederal Agency: Department of AgricultureFederal Programs: School Breakfast Program, National School Lunch Program, SummerFood Service Program for Children, Fresh Fruit and Vegetable ProgramAssistance Listings Numbers: 10.553, 10.555, 10.559, 10.582Federal Award Numbers and Years (or Other Identifying Numbers): FY22Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Finding: Material WeaknessCondition and ContextAn effective internal control system was not in place at the School Corporation in order to ensurecompliance with requirements related to the grant agreement and the Reporting compliance requirement.The School Corporation failed to properly implement a review of the reimbursement request prepared and submitted to the Indiana Department of Education. Although, one employee compiled andentered the necessary information into the reimbursement request, and the Director of Food Servicesreviewed and submitted the request, the Director's signature or other corroborating evidence was notalways present. Of the 24 reimbursement requests submitted, 11 did not contain the Director's signatureor other corroborating evidence that the request had been reviewed.The lack of internal controls was isolated to fiscal year 2021-2022.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the grant agreement and the Reporting compliance requirement.EffectThe failure to establish an effective internal control system placed the School Corporation at risk ofnoncompliance with the grant agreement and the Reporting compliance requirement.INDIANA STATE BOARD OF ACCOUNTS16MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-001Subject: Child Nutrition Cluster - Internal ControlsFederal Agency: Department of AgricultureFederal Programs: School Breakfast Program, National School Lunch Program, SummerFood Service Program for Children, Fresh Fruit and Vegetable ProgramAssistance Listings Numbers: 10.553, 10.555, 10.559, 10.582Federal Award Numbers and Years (or Other Identifying Numbers): FY22Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Finding: Material WeaknessCondition and ContextAn effective internal control system was not in place at the School Corporation in order to ensurecompliance with requirements related to the grant agreement and the Reporting compliance requirement.The School Corporation failed to properly implement a review of the reimbursement request prepared and submitted to the Indiana Department of Education. Although, one employee compiled andentered the necessary information into the reimbursement request, and the Director of Food Servicesreviewed and submitted the request, the Director's signature or other corroborating evidence was notalways present. Of the 24 reimbursement requests submitted, 11 did not contain the Director's signatureor other corroborating evidence that the request had been reviewed.The lack of internal controls was isolated to fiscal year 2021-2022.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the grant agreement and the Reporting compliance requirement.EffectThe failure to establish an effective internal control system placed the School Corporation at risk ofnoncompliance with the grant agreement and the Reporting compliance requirement.INDIANA STATE BOARD OF ACCOUNTS16MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-001Subject: Child Nutrition Cluster - Internal ControlsFederal Agency: Department of AgricultureFederal Programs: School Breakfast Program, National School Lunch Program, SummerFood Service Program for Children, Fresh Fruit and Vegetable ProgramAssistance Listings Numbers: 10.553, 10.555, 10.559, 10.582Federal Award Numbers and Years (or Other Identifying Numbers): FY22Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Finding: Material WeaknessCondition and ContextAn effective internal control system was not in place at the School Corporation in order to ensurecompliance with requirements related to the grant agreement and the Reporting compliance requirement.The School Corporation failed to properly implement a review of the reimbursement request prepared and submitted to the Indiana Department of Education. Although, one employee compiled andentered the necessary information into the reimbursement request, and the Director of Food Servicesreviewed and submitted the request, the Director's signature or other corroborating evidence was notalways present. Of the 24 reimbursement requests submitted, 11 did not contain the Director's signatureor other corroborating evidence that the request had been reviewed.The lack of internal controls was isolated to fiscal year 2021-2022.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the grant agreement and the Reporting compliance requirement.EffectThe failure to establish an effective internal control system placed the School Corporation at risk ofnoncompliance with the grant agreement and the Reporting compliance requirement.INDIANA STATE BOARD OF ACCOUNTS16MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002Subject: COVID-19 - Education Stabilization Fund - SpecialTests and Provisions - Wage Rate RequirementsFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listing Number: 84.425DFederal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Special Tests and Provisions - Wage Rate RequirementsAudit Findings: Material Weakness, Modified OpinionCondition and ContextAn effective internal control system, which would include segregation of duties, was not in place atthe School Corporation in order to ensure compliance with requirements related to the grant agreementand the Special Tests and Provisions - Wage Rate Requirements compliance requirement.Construction contracts in excess of $2,000 financed by federal assistance funds must pay wagesnot less than those established for the locality of the project (prevailing wage rates) by the Department ofLabor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their constructioncontracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor complywith these requirements and the DOL regulations. This would include a requirement to submit a copy ofthe payroll and statement of compliance to the entity for each week in which contract work was performed.The School Corporation had not designed, nor implemented a system of internal controls to ensurethat the wage rate requirements were met for a construction project. The School Corporation signed acontract with Heflin Industries to upgrade chillers and boilers. The total amount of the project was$2,176,500. The contract between the School Corporation and Heflin Industries did not include the requiredwage rate provisions clause. Additionally, certified payrolls were not submitted and maintained by theSchool Corporation for audit.The lack of internal controls and failure to maintain and provide adequate supporting documentationwere systemic issues throughout the audit period.INDIANA STATE BOARD OF ACCOUNTS17MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Farmwork', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."29 CFR 5.5 states in part:"(a) The Agency head shall cause or require the contracting officer to insert in full in anycontract in excess of $2,000 which is entered into for the actual construction, alteration and/orrepair, including painting and decorating, of a public building or public work, or building or workfinanced in whole or in part from Federal funds or in accordance with guarantees of a Federalagency or financed from funds obtained by pledge of any contract of a Federal agency to makea loan, grant or annual contribution (except where a different meaning is expressly indicated),and which is subject to the labor standards provisions of any of the acts listed in ? 5.1, thefollowing clauses . . .(1) Minimum wages.(i) All laborers and mechanics employed or working upon the site of the work (orunder the United States Housing Act of 1937 or under the Housing Act of 1949 in theconstruction or development of the project), will be paid unconditionally and not lessoften than once a week, and without subsequent deduction or rebate on any account(except such payroll deductions as are permitted by regulations issued by theSecretary of Labor under the Copeland Act (29 CFR part 3)), the full amount ofwages and bona fide fringe benefits (or cash equivalents thereof) due at time ofpayment computed at rates not less than those contained in the wage determinationof the Secretary of Labor which is attached hereto and made a part hereof,regardless of any contractual relationship which may be alleged to exist between thecontractor and such laborers and mechanics. . . .(3) Payrolls and basic records. . . .(ii)(A) The contractor shall submit weekly for each week in which any contract workis performed a copy of all payrolls to the (write in name of appropriate federalagency) if the agency is a party to the contract, but if the agency is not sucha party, the contractor will submit the payrolls to the applicant, sponsor, orowner, as the case may be, for transmission to the (write in name of agency).. . ."INDIANA STATE BOARD OF ACCOUNTS18MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)2 CFR 200 Appendix II states in part:"In addition to other provisions required by the Federal agency or non-Federal entity; allcontracts made by the non-Federal entity under the Federal award must contain provisionscovering the following, as applicable. . . .(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federalprogram legislation, all prime construction contracts in excess of $2,000 awarded by nonFederal entities must include a provision for compliance with the Davis-Bacon Act(40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Laborregulations (29 CFR Part 5, "Labor Standards Provisions Applicable to Contracts CoveringFederally Financed and Assisted Construction"). In accordance with the statute,contractors must be required to pay wages to laborers and mechanics at a rate not lessthan the prevailing wages specified in a wage determination made by the Secretary ofLabor. In addition, contractors must be required to pay wages not less than once a week.. . ."CauseManagement had not designed nor implemented a system of internal controls that would haveensured compliance with the grant agreement and the Special Tests and Provisions - Wage RateRequirements compliance requirement.EffectThe failure to establish an effective internal control system and to retain and provide appropriatesupporting documentation prevented the determination of the School Corporation's compliance with theSpecial Tests and Provisions - Wage Rate Requirements compliance requirement.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish internal controls to ensurecompliance and comply with the grant agreement and the Special Tests and Provisions - Wage RateRequirements compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-005Subject: COVID-19 - Education Stabilization Fund - ReportingFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Number: 84.425DFederal Award Number and Year (or Other Identifying Number): S425D200013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Other MattersINDIANA STATE BOARD OF ACCOUNTS22MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Condition and ContextAn effective internal control system was not designed nor implemented at the School Corporationto ensure compliance with the requirements related to the grant agreement and the Reporting compliancerequirement.The School Corporation filed the four required Elementary and Secondary School EmergencyRelief (ESSER) annual data reports. However, the ESSER I, Year 1 and ESSER I, Year 2 reports werenot supported by the School Corporation's records. For each of the reports, two key line items wereselected for verification, none of the line items tested were supported by the School Corporation's records.For the ESSER I, Year 2 report the data included expenditures for two months beyond the reporting period.The lack of internal controls and noncompliance were applicable to the ESSER I grant during theaudit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.334 states in part:"Financial records, supporting documents, statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the dateof submission of the final expenditure report or, for Federal awards that are renewed quarterlyor 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 ofa subrecipient. . . ."2 CFR 200.302(b) states in part:"The financial management system of each non-Federal entity must provide for the following:. . .(2) Accurate, current, and complete disclosure of the financial results of each Federalaward or program in accordance with the reporting requirements set forth in ?? 200.328and 200.329. . . .(3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federalawards, authorizations, obligations, unobligated balances, assets, expenditures,income and interest and be supported by source documentation. . . ."INDIANA STATE BOARD OF ACCOUNTS23MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and formatthat assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out otherresponsibilities under the program."CauseManagement had not designed, nor implemented a system of internal controls that would haveensured compliance or that supporting documentation would have been maintained and available for auditrelated to the Reporting compliance requirement.EffectThe failure to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the Reporting compliance requirement. Noncompliancewith the grant agreement and the Reporting compliance requirement could result in the loss of future federalfunds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and available for audit and comply with the grantagreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004Subject: COVID-19 - Education Stabilization Fund - Special Testsand Provisions - Participation of Private School ChildrenFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Number: 84.425DFederal Award Number and Year (or Other Identifying Number): S425D200013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Special Tests and Provisions - Participation of Private School ChildrenAudit Finding: Material WeaknessCondition and ContextAn effective internal control system was not designed nor implemented at the School Corporationin order to ensure compliance with requirements related to the grant agreement and the Special Tests andProvisions - Participation of Private School Children compliance requirement.Although the School Corporation stated the grant coordinator reviewed and approved expendituresfor the nonpublic schools, no auditable evidence of the review and approval was presented for audit.The lack of internal controls was a systemic issue throughout the audit period.INDIANA STATE BOARD OF ACCOUNTS21MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."CauseManagement had not developed an effective system of internal controls that would have ensuredcompliance with the grant agreement and the Special Tests and Provisions - Participation of Private SchoolChildren compliance requirement.EffectThe failure to establish an effective system of internal controls could have enabled noncompliancewith the grant agreement and the Special Tests and Provisions - Participation of Private School Childrencompliance requirement.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internalcontrols to ensure compliance with the grant agreement and the Special Tests and Provisions - Participationof Private School Children compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002Subject: COVID-19 - Education Stabilization Fund - SpecialTests and Provisions - Wage Rate RequirementsFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listing Number: 84.425DFederal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Special Tests and Provisions - Wage Rate RequirementsAudit Findings: Material Weakness, Modified OpinionCondition and ContextAn effective internal control system, which would include segregation of duties, was not in place atthe School Corporation in order to ensure compliance with requirements related to the grant agreementand the Special Tests and Provisions - Wage Rate Requirements compliance requirement.Construction contracts in excess of $2,000 financed by federal assistance funds must pay wagesnot less than those established for the locality of the project (prevailing wage rates) by the Department ofLabor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their constructioncontracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor complywith these requirements and the DOL regulations. This would include a requirement to submit a copy ofthe payroll and statement of compliance to the entity for each week in which contract work was performed.The School Corporation had not designed, nor implemented a system of internal controls to ensurethat the wage rate requirements were met for a construction project. The School Corporation signed acontract with Heflin Industries to upgrade chillers and boilers. The total amount of the project was$2,176,500. The contract between the School Corporation and Heflin Industries did not include the requiredwage rate provisions clause. Additionally, certified payrolls were not submitted and maintained by theSchool Corporation for audit.The lack of internal controls and failure to maintain and provide adequate supporting documentationwere systemic issues throughout the audit period.INDIANA STATE BOARD OF ACCOUNTS17MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Farmwork', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."29 CFR 5.5 states in part:"(a) The Agency head shall cause or require the contracting officer to insert in full in anycontract in excess of $2,000 which is entered into for the actual construction, alteration and/orrepair, including painting and decorating, of a public building or public work, or building or workfinanced in whole or in part from Federal funds or in accordance with guarantees of a Federalagency or financed from funds obtained by pledge of any contract of a Federal agency to makea loan, grant or annual contribution (except where a different meaning is expressly indicated),and which is subject to the labor standards provisions of any of the acts listed in ? 5.1, thefollowing clauses . . .(1) Minimum wages.(i) All laborers and mechanics employed or working upon the site of the work (orunder the United States Housing Act of 1937 or under the Housing Act of 1949 in theconstruction or development of the project), will be paid unconditionally and not lessoften than once a week, and without subsequent deduction or rebate on any account(except such payroll deductions as are permitted by regulations issued by theSecretary of Labor under the Copeland Act (29 CFR part 3)), the full amount ofwages and bona fide fringe benefits (or cash equivalents thereof) due at time ofpayment computed at rates not less than those contained in the wage determinationof the Secretary of Labor which is attached hereto and made a part hereof,regardless of any contractual relationship which may be alleged to exist between thecontractor and such laborers and mechanics. . . .(3) Payrolls and basic records. . . .(ii)(A) The contractor shall submit weekly for each week in which any contract workis performed a copy of all payrolls to the (write in name of appropriate federalagency) if the agency is a party to the contract, but if the agency is not sucha party, the contractor will submit the payrolls to the applicant, sponsor, orowner, as the case may be, for transmission to the (write in name of agency).. . ."INDIANA STATE BOARD OF ACCOUNTS18MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)2 CFR 200 Appendix II states in part:"In addition to other provisions required by the Federal agency or non-Federal entity; allcontracts made by the non-Federal entity under the Federal award must contain provisionscovering the following, as applicable. . . .(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federalprogram legislation, all prime construction contracts in excess of $2,000 awarded by nonFederal entities must include a provision for compliance with the Davis-Bacon Act(40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Laborregulations (29 CFR Part 5, "Labor Standards Provisions Applicable to Contracts CoveringFederally Financed and Assisted Construction"). In accordance with the statute,contractors must be required to pay wages to laborers and mechanics at a rate not lessthan the prevailing wages specified in a wage determination made by the Secretary ofLabor. In addition, contractors must be required to pay wages not less than once a week.. . ."CauseManagement had not designed nor implemented a system of internal controls that would haveensured compliance with the grant agreement and the Special Tests and Provisions - Wage RateRequirements compliance requirement.EffectThe failure to establish an effective internal control system and to retain and provide appropriatesupporting documentation prevented the determination of the School Corporation's compliance with theSpecial Tests and Provisions - Wage Rate Requirements compliance requirement.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish internal controls to ensurecompliance and comply with the grant agreement and the Special Tests and Provisions - Wage RateRequirements compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002Subject: COVID-19 - Education Stabilization Fund - SpecialTests and Provisions - Wage Rate RequirementsFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listing Number: 84.425DFederal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Special Tests and Provisions - Wage Rate RequirementsAudit Findings: Material Weakness, Modified OpinionCondition and ContextAn effective internal control system, which would include segregation of duties, was not in place atthe School Corporation in order to ensure compliance with requirements related to the grant agreementand the Special Tests and Provisions - Wage Rate Requirements compliance requirement.Construction contracts in excess of $2,000 financed by federal assistance funds must pay wagesnot less than those established for the locality of the project (prevailing wage rates) by the Department ofLabor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their constructioncontracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor complywith these requirements and the DOL regulations. This would include a requirement to submit a copy ofthe payroll and statement of compliance to the entity for each week in which contract work was performed.The School Corporation had not designed, nor implemented a system of internal controls to ensurethat the wage rate requirements were met for a construction project. The School Corporation signed acontract with Heflin Industries to upgrade chillers and boilers. The total amount of the project was$2,176,500. The contract between the School Corporation and Heflin Industries did not include the requiredwage rate provisions clause. Additionally, certified payrolls were not submitted and maintained by theSchool Corporation for audit.The lack of internal controls and failure to maintain and provide adequate supporting documentationwere systemic issues throughout the audit period.INDIANA STATE BOARD OF ACCOUNTS17MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Farmwork', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."29 CFR 5.5 states in part:"(a) The Agency head shall cause or require the contracting officer to insert in full in anycontract in excess of $2,000 which is entered into for the actual construction, alteration and/orrepair, including painting and decorating, of a public building or public work, or building or workfinanced in whole or in part from Federal funds or in accordance with guarantees of a Federalagency or financed from funds obtained by pledge of any contract of a Federal agency to makea loan, grant or annual contribution (except where a different meaning is expressly indicated),and which is subject to the labor standards provisions of any of the acts listed in ? 5.1, thefollowing clauses . . .(1) Minimum wages.(i) All laborers and mechanics employed or working upon the site of the work (orunder the United States Housing Act of 1937 or under the Housing Act of 1949 in theconstruction or development of the project), will be paid unconditionally and not lessoften than once a week, and without subsequent deduction or rebate on any account(except such payroll deductions as are permitted by regulations issued by theSecretary of Labor under the Copeland Act (29 CFR part 3)), the full amount ofwages and bona fide fringe benefits (or cash equivalents thereof) due at time ofpayment computed at rates not less than those contained in the wage determinationof the Secretary of Labor which is attached hereto and made a part hereof,regardless of any contractual relationship which may be alleged to exist between thecontractor and such laborers and mechanics. . . .(3) Payrolls and basic records. . . .(ii)(A) The contractor shall submit weekly for each week in which any contract workis performed a copy of all payrolls to the (write in name of appropriate federalagency) if the agency is a party to the contract, but if the agency is not sucha party, the contractor will submit the payrolls to the applicant, sponsor, orowner, as the case may be, for transmission to the (write in name of agency).. . ."INDIANA STATE BOARD OF ACCOUNTS18MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)2 CFR 200 Appendix II states in part:"In addition to other provisions required by the Federal agency or non-Federal entity; allcontracts made by the non-Federal entity under the Federal award must contain provisionscovering the following, as applicable. . . .(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federalprogram legislation, all prime construction contracts in excess of $2,000 awarded by nonFederal entities must include a provision for compliance with the Davis-Bacon Act(40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Laborregulations (29 CFR Part 5, "Labor Standards Provisions Applicable to Contracts CoveringFederally Financed and Assisted Construction"). In accordance with the statute,contractors must be required to pay wages to laborers and mechanics at a rate not lessthan the prevailing wages specified in a wage determination made by the Secretary ofLabor. In addition, contractors must be required to pay wages not less than once a week.. . ."CauseManagement had not designed nor implemented a system of internal controls that would haveensured compliance with the grant agreement and the Special Tests and Provisions - Wage RateRequirements compliance requirement.EffectThe failure to establish an effective internal control system and to retain and provide appropriatesupporting documentation prevented the determination of the School Corporation's compliance with theSpecial Tests and Provisions - Wage Rate Requirements compliance requirement.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish internal controls to ensurecompliance and comply with the grant agreement and the Special Tests and Provisions - Wage RateRequirements compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004Subject: COVID-19 - Education Stabilization Fund - Special Testsand Provisions - Participation of Private School ChildrenFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Number: 84.425DFederal Award Number and Year (or Other Identifying Number): S425D200013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Special Tests and Provisions - Participation of Private School ChildrenAudit Finding: Material WeaknessCondition and ContextAn effective internal control system was not designed nor implemented at the School Corporationin order to ensure compliance with requirements related to the grant agreement and the Special Tests andProvisions - Participation of Private School Children compliance requirement.Although the School Corporation stated the grant coordinator reviewed and approved expendituresfor the nonpublic schools, no auditable evidence of the review and approval was presented for audit.The lack of internal controls was a systemic issue throughout the audit period.INDIANA STATE BOARD OF ACCOUNTS21MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."CauseManagement had not developed an effective system of internal controls that would have ensuredcompliance with the grant agreement and the Special Tests and Provisions - Participation of Private SchoolChildren compliance requirement.EffectThe failure to establish an effective system of internal controls could have enabled noncompliancewith the grant agreement and the Special Tests and Provisions - Participation of Private School Childrencompliance requirement.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internalcontrols to ensure compliance with the grant agreement and the Special Tests and Provisions - Participationof Private School Children compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property ManagementFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Number: 84.425DFederal Award Number and Year (or Other Identifying Number): S425D210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Equipment and Real Property ManagementAudit Findings: Material Weakness, Other MattersINDIANA STATE BOARD OF ACCOUNTS19MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Condition and ContextAn effective internal control system was not in place at the School Corporation in order to ensurecompliance with requirements related to the grant agreement and the Equipment and Real PropertyManagement compliance requirement.A property record or capital asset listing which would include a description of the property, a serialnumber or other identification number, the source of funding for the property (including the federal awardidentification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage offederal participation in the project costs for the federal award under which the property was acquired, thelocation, and use and condition of the property is to be maintained for assets purchased that exceed theSchool Corporation's capitalization threshold.The School Corporation purchased one capital asset, a boiler/chiller, with the Elementary andSecondary School Emergency Relief (ESSER II) Fund award. The boiler/chiller was included in the SchoolCorporation's capital assets listing; however, the capital asset listing did not identify the source of funding.In addition, a physical inventory had not been taken in the past two years and assets were not properlymaintained and safeguarded.The lack of internal controls and noncompliance were systemic issues throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.313(d) states in part:"Management requirements. Procedures for managing equipment (including replacementequipment), whether acquired in whole or in part under a Federal award, until disposition takesplace will, as a minimum, meet the following requirements:(1) Property records must be maintained that include a description of the property, a serialnumber or other identification number, the source of funding for the property (includingthe FAIN), who holds title, the acquisition date, and cost of the property, percentage ofFederal participation in the project costs for the Federal award under which theproperty was acquired, the location, use and condition of the property, and any ultimatedisposition data including the date of disposal and sale price of the property.(2) A physical inventory of the property must be taken and the results reconciled with theproperty records at least once every two years.(3) A control system must be developed to ensure adequate safeguards to prevent loss,damage, or theft of the property. Any loss, damage, or theft must be investigated.. . ."INDIANA STATE BOARD OF ACCOUNTS20MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)CauseManagement had not designed nor implemented a system of internal controls that would haveensured compliance with the grant agreement and the Equipment and Real Property Managementcompliance requirement.EffectThe failure to establish an effective internal control system enabled material noncompliance to goundetected. Noncompliance with the grant agreement and the Equipment and Real Property Managementcompliance requirement could have resulted in the loss of federal funds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish internal controls to ensurecompliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-005Subject: COVID-19 - Education Stabilization Fund - ReportingFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Number: 84.425DFederal Award Number and Year (or Other Identifying Number): S425D200013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Other MattersINDIANA STATE BOARD OF ACCOUNTS22MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Condition and ContextAn effective internal control system was not designed nor implemented at the School Corporationto ensure compliance with the requirements related to the grant agreement and the Reporting compliancerequirement.The School Corporation filed the four required Elementary and Secondary School EmergencyRelief (ESSER) annual data reports. However, the ESSER I, Year 1 and ESSER I, Year 2 reports werenot supported by the School Corporation's records. For each of the reports, two key line items wereselected for verification, none of the line items tested were supported by the School Corporation's records.For the ESSER I, Year 2 report the data included expenditures for two months beyond the reporting period.The lack of internal controls and noncompliance were applicable to the ESSER I grant during theaudit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.334 states in part:"Financial records, supporting documents, statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the dateof submission of the final expenditure report or, for Federal awards that are renewed quarterlyor 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 ofa subrecipient. . . ."2 CFR 200.302(b) states in part:"The financial management system of each non-Federal entity must provide for the following:. . .(2) Accurate, current, and complete disclosure of the financial results of each Federalaward or program in accordance with the reporting requirements set forth in ?? 200.328and 200.329. . . .(3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federalawards, authorizations, obligations, unobligated balances, assets, expenditures,income and interest and be supported by source documentation. . . ."INDIANA STATE BOARD OF ACCOUNTS23MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and formatthat assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out otherresponsibilities under the program."CauseManagement had not designed, nor implemented a system of internal controls that would haveensured compliance or that supporting documentation would have been maintained and available for auditrelated to the Reporting compliance requirement.EffectThe failure to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the Reporting compliance requirement. Noncompliancewith the grant agreement and the Reporting compliance requirement could result in the loss of future federalfunds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and available for audit and comply with the grantagreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-001Subject: Child Nutrition Cluster - Internal ControlsFederal Agency: Department of AgricultureFederal Programs: School Breakfast Program, National School Lunch Program, SummerFood Service Program for Children, Fresh Fruit and Vegetable ProgramAssistance Listings Numbers: 10.553, 10.555, 10.559, 10.582Federal Award Numbers and Years (or Other Identifying Numbers): FY22Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Finding: Material WeaknessCondition and ContextAn effective internal control system was not in place at the School Corporation in order to ensurecompliance with requirements related to the grant agreement and the Reporting compliance requirement.The School Corporation failed to properly implement a review of the reimbursement request prepared and submitted to the Indiana Department of Education. Although, one employee compiled andentered the necessary information into the reimbursement request, and the Director of Food Servicesreviewed and submitted the request, the Director's signature or other corroborating evidence was notalways present. Of the 24 reimbursement requests submitted, 11 did not contain the Director's signatureor other corroborating evidence that the request had been reviewed.The lack of internal controls was isolated to fiscal year 2021-2022.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the grant agreement and the Reporting compliance requirement.EffectThe failure to establish an effective internal control system placed the School Corporation at risk ofnoncompliance with the grant agreement and the Reporting compliance requirement.INDIANA STATE BOARD OF ACCOUNTS16MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-001Subject: Child Nutrition Cluster - Internal ControlsFederal Agency: Department of AgricultureFederal Programs: School Breakfast Program, National School Lunch Program, SummerFood Service Program for Children, Fresh Fruit and Vegetable ProgramAssistance Listings Numbers: 10.553, 10.555, 10.559, 10.582Federal Award Numbers and Years (or Other Identifying Numbers): FY22Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Finding: Material WeaknessCondition and ContextAn effective internal control system was not in place at the School Corporation in order to ensurecompliance with requirements related to the grant agreement and the Reporting compliance requirement.The School Corporation failed to properly implement a review of the reimbursement request prepared and submitted to the Indiana Department of Education. Although, one employee compiled andentered the necessary information into the reimbursement request, and the Director of Food Servicesreviewed and submitted the request, the Director's signature or other corroborating evidence was notalways present. Of the 24 reimbursement requests submitted, 11 did not contain the Director's signatureor other corroborating evidence that the request had been reviewed.The lack of internal controls was isolated to fiscal year 2021-2022.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the grant agreement and the Reporting compliance requirement.EffectThe failure to establish an effective internal control system placed the School Corporation at risk ofnoncompliance with the grant agreement and the Reporting compliance requirement.INDIANA STATE BOARD OF ACCOUNTS16MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-001Subject: Child Nutrition Cluster - Internal ControlsFederal Agency: Department of AgricultureFederal Programs: School Breakfast Program, National School Lunch Program, SummerFood Service Program for Children, Fresh Fruit and Vegetable ProgramAssistance Listings Numbers: 10.553, 10.555, 10.559, 10.582Federal Award Numbers and Years (or Other Identifying Numbers): FY22Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Finding: Material WeaknessCondition and ContextAn effective internal control system was not in place at the School Corporation in order to ensurecompliance with requirements related to the grant agreement and the Reporting compliance requirement.The School Corporation failed to properly implement a review of the reimbursement request prepared and submitted to the Indiana Department of Education. Although, one employee compiled andentered the necessary information into the reimbursement request, and the Director of Food Servicesreviewed and submitted the request, the Director's signature or other corroborating evidence was notalways present. Of the 24 reimbursement requests submitted, 11 did not contain the Director's signatureor other corroborating evidence that the request had been reviewed.The lack of internal controls was isolated to fiscal year 2021-2022.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the grant agreement and the Reporting compliance requirement.EffectThe failure to establish an effective internal control system placed the School Corporation at risk ofnoncompliance with the grant agreement and the Reporting compliance requirement.INDIANA STATE BOARD OF ACCOUNTS16MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-001Subject: Child Nutrition Cluster - Internal ControlsFederal Agency: Department of AgricultureFederal Programs: School Breakfast Program, National School Lunch Program, SummerFood Service Program for Children, Fresh Fruit and Vegetable ProgramAssistance Listings Numbers: 10.553, 10.555, 10.559, 10.582Federal Award Numbers and Years (or Other Identifying Numbers): FY22Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Finding: Material WeaknessCondition and ContextAn effective internal control system was not in place at the School Corporation in order to ensurecompliance with requirements related to the grant agreement and the Reporting compliance requirement.The School Corporation failed to properly implement a review of the reimbursement request prepared and submitted to the Indiana Department of Education. Although, one employee compiled andentered the necessary information into the reimbursement request, and the Director of Food Servicesreviewed and submitted the request, the Director's signature or other corroborating evidence was notalways present. Of the 24 reimbursement requests submitted, 11 did not contain the Director's signatureor other corroborating evidence that the request had been reviewed.The lack of internal controls was isolated to fiscal year 2021-2022.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the grant agreement and the Reporting compliance requirement.EffectThe failure to establish an effective internal control system placed the School Corporation at risk ofnoncompliance with the grant agreement and the Reporting compliance requirement.INDIANA STATE BOARD OF ACCOUNTS16MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002Subject: COVID-19 - Education Stabilization Fund - SpecialTests and Provisions - Wage Rate RequirementsFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listing Number: 84.425DFederal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Special Tests and Provisions - Wage Rate RequirementsAudit Findings: Material Weakness, Modified OpinionCondition and ContextAn effective internal control system, which would include segregation of duties, was not in place atthe School Corporation in order to ensure compliance with requirements related to the grant agreementand the Special Tests and Provisions - Wage Rate Requirements compliance requirement.Construction contracts in excess of $2,000 financed by federal assistance funds must pay wagesnot less than those established for the locality of the project (prevailing wage rates) by the Department ofLabor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their constructioncontracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor complywith these requirements and the DOL regulations. This would include a requirement to submit a copy ofthe payroll and statement of compliance to the entity for each week in which contract work was performed.The School Corporation had not designed, nor implemented a system of internal controls to ensurethat the wage rate requirements were met for a construction project. The School Corporation signed acontract with Heflin Industries to upgrade chillers and boilers. The total amount of the project was$2,176,500. The contract between the School Corporation and Heflin Industries did not include the requiredwage rate provisions clause. Additionally, certified payrolls were not submitted and maintained by theSchool Corporation for audit.The lack of internal controls and failure to maintain and provide adequate supporting documentationwere systemic issues throughout the audit period.INDIANA STATE BOARD OF ACCOUNTS17MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Farmwork', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."29 CFR 5.5 states in part:"(a) The Agency head shall cause or require the contracting officer to insert in full in anycontract in excess of $2,000 which is entered into for the actual construction, alteration and/orrepair, including painting and decorating, of a public building or public work, or building or workfinanced in whole or in part from Federal funds or in accordance with guarantees of a Federalagency or financed from funds obtained by pledge of any contract of a Federal agency to makea loan, grant or annual contribution (except where a different meaning is expressly indicated),and which is subject to the labor standards provisions of any of the acts listed in ? 5.1, thefollowing clauses . . .(1) Minimum wages.(i) All laborers and mechanics employed or working upon the site of the work (orunder the United States Housing Act of 1937 or under the Housing Act of 1949 in theconstruction or development of the project), will be paid unconditionally and not lessoften than once a week, and without subsequent deduction or rebate on any account(except such payroll deductions as are permitted by regulations issued by theSecretary of Labor under the Copeland Act (29 CFR part 3)), the full amount ofwages and bona fide fringe benefits (or cash equivalents thereof) due at time ofpayment computed at rates not less than those contained in the wage determinationof the Secretary of Labor which is attached hereto and made a part hereof,regardless of any contractual relationship which may be alleged to exist between thecontractor and such laborers and mechanics. . . .(3) Payrolls and basic records. . . .(ii)(A) The contractor shall submit weekly for each week in which any contract workis performed a copy of all payrolls to the (write in name of appropriate federalagency) if the agency is a party to the contract, but if the agency is not sucha party, the contractor will submit the payrolls to the applicant, sponsor, orowner, as the case may be, for transmission to the (write in name of agency).. . ."INDIANA STATE BOARD OF ACCOUNTS18MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)2 CFR 200 Appendix II states in part:"In addition to other provisions required by the Federal agency or non-Federal entity; allcontracts made by the non-Federal entity under the Federal award must contain provisionscovering the following, as applicable. . . .(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federalprogram legislation, all prime construction contracts in excess of $2,000 awarded by nonFederal entities must include a provision for compliance with the Davis-Bacon Act(40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Laborregulations (29 CFR Part 5, "Labor Standards Provisions Applicable to Contracts CoveringFederally Financed and Assisted Construction"). In accordance with the statute,contractors must be required to pay wages to laborers and mechanics at a rate not lessthan the prevailing wages specified in a wage determination made by the Secretary ofLabor. In addition, contractors must be required to pay wages not less than once a week.. . ."CauseManagement had not designed nor implemented a system of internal controls that would haveensured compliance with the grant agreement and the Special Tests and Provisions - Wage RateRequirements compliance requirement.EffectThe failure to establish an effective internal control system and to retain and provide appropriatesupporting documentation prevented the determination of the School Corporation's compliance with theSpecial Tests and Provisions - Wage Rate Requirements compliance requirement.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish internal controls to ensurecompliance and comply with the grant agreement and the Special Tests and Provisions - Wage RateRequirements compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-005Subject: COVID-19 - Education Stabilization Fund - ReportingFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Number: 84.425DFederal Award Number and Year (or Other Identifying Number): S425D200013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Other MattersINDIANA STATE BOARD OF ACCOUNTS22MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Condition and ContextAn effective internal control system was not designed nor implemented at the School Corporationto ensure compliance with the requirements related to the grant agreement and the Reporting compliancerequirement.The School Corporation filed the four required Elementary and Secondary School EmergencyRelief (ESSER) annual data reports. However, the ESSER I, Year 1 and ESSER I, Year 2 reports werenot supported by the School Corporation's records. For each of the reports, two key line items wereselected for verification, none of the line items tested were supported by the School Corporation's records.For the ESSER I, Year 2 report the data included expenditures for two months beyond the reporting period.The lack of internal controls and noncompliance were applicable to the ESSER I grant during theaudit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.334 states in part:"Financial records, supporting documents, statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the dateof submission of the final expenditure report or, for Federal awards that are renewed quarterlyor 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 ofa subrecipient. . . ."2 CFR 200.302(b) states in part:"The financial management system of each non-Federal entity must provide for the following:. . .(2) Accurate, current, and complete disclosure of the financial results of each Federalaward or program in accordance with the reporting requirements set forth in ?? 200.328and 200.329. . . .(3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federalawards, authorizations, obligations, unobligated balances, assets, expenditures,income and interest and be supported by source documentation. . . ."INDIANA STATE BOARD OF ACCOUNTS23MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and formatthat assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out otherresponsibilities under the program."CauseManagement had not designed, nor implemented a system of internal controls that would haveensured compliance or that supporting documentation would have been maintained and available for auditrelated to the Reporting compliance requirement.EffectThe failure to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the Reporting compliance requirement. Noncompliancewith the grant agreement and the Reporting compliance requirement could result in the loss of future federalfunds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and available for audit and comply with the grantagreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004Subject: COVID-19 - Education Stabilization Fund - Special Testsand Provisions - Participation of Private School ChildrenFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Number: 84.425DFederal Award Number and Year (or Other Identifying Number): S425D200013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Special Tests and Provisions - Participation of Private School ChildrenAudit Finding: Material WeaknessCondition and ContextAn effective internal control system was not designed nor implemented at the School Corporationin order to ensure compliance with requirements related to the grant agreement and the Special Tests andProvisions - Participation of Private School Children compliance requirement.Although the School Corporation stated the grant coordinator reviewed and approved expendituresfor the nonpublic schools, no auditable evidence of the review and approval was presented for audit.The lack of internal controls was a systemic issue throughout the audit period.INDIANA STATE BOARD OF ACCOUNTS21MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."CauseManagement had not developed an effective system of internal controls that would have ensuredcompliance with the grant agreement and the Special Tests and Provisions - Participation of Private SchoolChildren compliance requirement.EffectThe failure to establish an effective system of internal controls could have enabled noncompliancewith the grant agreement and the Special Tests and Provisions - Participation of Private School Childrencompliance requirement.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internalcontrols to ensure compliance with the grant agreement and the Special Tests and Provisions - Participationof Private School Children compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002Subject: COVID-19 - Education Stabilization Fund - SpecialTests and Provisions - Wage Rate RequirementsFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listing Number: 84.425DFederal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Special Tests and Provisions - Wage Rate RequirementsAudit Findings: Material Weakness, Modified OpinionCondition and ContextAn effective internal control system, which would include segregation of duties, was not in place atthe School Corporation in order to ensure compliance with requirements related to the grant agreementand the Special Tests and Provisions - Wage Rate Requirements compliance requirement.Construction contracts in excess of $2,000 financed by federal assistance funds must pay wagesnot less than those established for the locality of the project (prevailing wage rates) by the Department ofLabor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their constructioncontracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor complywith these requirements and the DOL regulations. This would include a requirement to submit a copy ofthe payroll and statement of compliance to the entity for each week in which contract work was performed.The School Corporation had not designed, nor implemented a system of internal controls to ensurethat the wage rate requirements were met for a construction project. The School Corporation signed acontract with Heflin Industries to upgrade chillers and boilers. The total amount of the project was$2,176,500. The contract between the School Corporation and Heflin Industries did not include the requiredwage rate provisions clause. Additionally, certified payrolls were not submitted and maintained by theSchool Corporation for audit.The lack of internal controls and failure to maintain and provide adequate supporting documentationwere systemic issues throughout the audit period.INDIANA STATE BOARD OF ACCOUNTS17MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Farmwork', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."29 CFR 5.5 states in part:"(a) The Agency head shall cause or require the contracting officer to insert in full in anycontract in excess of $2,000 which is entered into for the actual construction, alteration and/orrepair, including painting and decorating, of a public building or public work, or building or workfinanced in whole or in part from Federal funds or in accordance with guarantees of a Federalagency or financed from funds obtained by pledge of any contract of a Federal agency to makea loan, grant or annual contribution (except where a different meaning is expressly indicated),and which is subject to the labor standards provisions of any of the acts listed in ? 5.1, thefollowing clauses . . .(1) Minimum wages.(i) All laborers and mechanics employed or working upon the site of the work (orunder the United States Housing Act of 1937 or under the Housing Act of 1949 in theconstruction or development of the project), will be paid unconditionally and not lessoften than once a week, and without subsequent deduction or rebate on any account(except such payroll deductions as are permitted by regulations issued by theSecretary of Labor under the Copeland Act (29 CFR part 3)), the full amount ofwages and bona fide fringe benefits (or cash equivalents thereof) due at time ofpayment computed at rates not less than those contained in the wage determinationof the Secretary of Labor which is attached hereto and made a part hereof,regardless of any contractual relationship which may be alleged to exist between thecontractor and such laborers and mechanics. . . .(3) Payrolls and basic records. . . .(ii)(A) The contractor shall submit weekly for each week in which any contract workis performed a copy of all payrolls to the (write in name of appropriate federalagency) if the agency is a party to the contract, but if the agency is not sucha party, the contractor will submit the payrolls to the applicant, sponsor, orowner, as the case may be, for transmission to the (write in name of agency).. . ."INDIANA STATE BOARD OF ACCOUNTS18MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)2 CFR 200 Appendix II states in part:"In addition to other provisions required by the Federal agency or non-Federal entity; allcontracts made by the non-Federal entity under the Federal award must contain provisionscovering the following, as applicable. . . .(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federalprogram legislation, all prime construction contracts in excess of $2,000 awarded by nonFederal entities must include a provision for compliance with the Davis-Bacon Act(40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Laborregulations (29 CFR Part 5, "Labor Standards Provisions Applicable to Contracts CoveringFederally Financed and Assisted Construction"). In accordance with the statute,contractors must be required to pay wages to laborers and mechanics at a rate not lessthan the prevailing wages specified in a wage determination made by the Secretary ofLabor. In addition, contractors must be required to pay wages not less than once a week.. . ."CauseManagement had not designed nor implemented a system of internal controls that would haveensured compliance with the grant agreement and the Special Tests and Provisions - Wage RateRequirements compliance requirement.EffectThe failure to establish an effective internal control system and to retain and provide appropriatesupporting documentation prevented the determination of the School Corporation's compliance with theSpecial Tests and Provisions - Wage Rate Requirements compliance requirement.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish internal controls to ensurecompliance and comply with the grant agreement and the Special Tests and Provisions - Wage RateRequirements compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002Subject: COVID-19 - Education Stabilization Fund - SpecialTests and Provisions - Wage Rate RequirementsFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listing Number: 84.425DFederal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Special Tests and Provisions - Wage Rate RequirementsAudit Findings: Material Weakness, Modified OpinionCondition and ContextAn effective internal control system, which would include segregation of duties, was not in place atthe School Corporation in order to ensure compliance with requirements related to the grant agreementand the Special Tests and Provisions - Wage Rate Requirements compliance requirement.Construction contracts in excess of $2,000 financed by federal assistance funds must pay wagesnot less than those established for the locality of the project (prevailing wage rates) by the Department ofLabor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their constructioncontracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor complywith these requirements and the DOL regulations. This would include a requirement to submit a copy ofthe payroll and statement of compliance to the entity for each week in which contract work was performed.The School Corporation had not designed, nor implemented a system of internal controls to ensurethat the wage rate requirements were met for a construction project. The School Corporation signed acontract with Heflin Industries to upgrade chillers and boilers. The total amount of the project was$2,176,500. The contract between the School Corporation and Heflin Industries did not include the requiredwage rate provisions clause. Additionally, certified payrolls were not submitted and maintained by theSchool Corporation for audit.The lack of internal controls and failure to maintain and provide adequate supporting documentationwere systemic issues throughout the audit period.INDIANA STATE BOARD OF ACCOUNTS17MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Farmwork', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."29 CFR 5.5 states in part:"(a) The Agency head shall cause or require the contracting officer to insert in full in anycontract in excess of $2,000 which is entered into for the actual construction, alteration and/orrepair, including painting and decorating, of a public building or public work, or building or workfinanced in whole or in part from Federal funds or in accordance with guarantees of a Federalagency or financed from funds obtained by pledge of any contract of a Federal agency to makea loan, grant or annual contribution (except where a different meaning is expressly indicated),and which is subject to the labor standards provisions of any of the acts listed in ? 5.1, thefollowing clauses . . .(1) Minimum wages.(i) All laborers and mechanics employed or working upon the site of the work (orunder the United States Housing Act of 1937 or under the Housing Act of 1949 in theconstruction or development of the project), will be paid unconditionally and not lessoften than once a week, and without subsequent deduction or rebate on any account(except such payroll deductions as are permitted by regulations issued by theSecretary of Labor under the Copeland Act (29 CFR part 3)), the full amount ofwages and bona fide fringe benefits (or cash equivalents thereof) due at time ofpayment computed at rates not less than those contained in the wage determinationof the Secretary of Labor which is attached hereto and made a part hereof,regardless of any contractual relationship which may be alleged to exist between thecontractor and such laborers and mechanics. . . .(3) Payrolls and basic records. . . .(ii)(A) The contractor shall submit weekly for each week in which any contract workis performed a copy of all payrolls to the (write in name of appropriate federalagency) if the agency is a party to the contract, but if the agency is not sucha party, the contractor will submit the payrolls to the applicant, sponsor, orowner, as the case may be, for transmission to the (write in name of agency).. . ."INDIANA STATE BOARD OF ACCOUNTS18MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)2 CFR 200 Appendix II states in part:"In addition to other provisions required by the Federal agency or non-Federal entity; allcontracts made by the non-Federal entity under the Federal award must contain provisionscovering the following, as applicable. . . .(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federalprogram legislation, all prime construction contracts in excess of $2,000 awarded by nonFederal entities must include a provision for compliance with the Davis-Bacon Act(40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Laborregulations (29 CFR Part 5, "Labor Standards Provisions Applicable to Contracts CoveringFederally Financed and Assisted Construction"). In accordance with the statute,contractors must be required to pay wages to laborers and mechanics at a rate not lessthan the prevailing wages specified in a wage determination made by the Secretary ofLabor. In addition, contractors must be required to pay wages not less than once a week.. . ."CauseManagement had not designed nor implemented a system of internal controls that would haveensured compliance with the grant agreement and the Special Tests and Provisions - Wage RateRequirements compliance requirement.EffectThe failure to establish an effective internal control system and to retain and provide appropriatesupporting documentation prevented the determination of the School Corporation's compliance with theSpecial Tests and Provisions - Wage Rate Requirements compliance requirement.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish internal controls to ensurecompliance and comply with the grant agreement and the Special Tests and Provisions - Wage RateRequirements compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004Subject: COVID-19 - Education Stabilization Fund - Special Testsand Provisions - Participation of Private School ChildrenFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Number: 84.425DFederal Award Number and Year (or Other Identifying Number): S425D200013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Special Tests and Provisions - Participation of Private School ChildrenAudit Finding: Material WeaknessCondition and ContextAn effective internal control system was not designed nor implemented at the School Corporationin order to ensure compliance with requirements related to the grant agreement and the Special Tests andProvisions - Participation of Private School Children compliance requirement.Although the School Corporation stated the grant coordinator reviewed and approved expendituresfor the nonpublic schools, no auditable evidence of the review and approval was presented for audit.The lack of internal controls was a systemic issue throughout the audit period.INDIANA STATE BOARD OF ACCOUNTS21MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."CauseManagement had not developed an effective system of internal controls that would have ensuredcompliance with the grant agreement and the Special Tests and Provisions - Participation of Private SchoolChildren compliance requirement.EffectThe failure to establish an effective system of internal controls could have enabled noncompliancewith the grant agreement and the Special Tests and Provisions - Participation of Private School Childrencompliance requirement.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internalcontrols to ensure compliance with the grant agreement and the Special Tests and Provisions - Participationof Private School Children compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property ManagementFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Number: 84.425DFederal Award Number and Year (or Other Identifying Number): S425D210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Equipment and Real Property ManagementAudit Findings: Material Weakness, Other MattersINDIANA STATE BOARD OF ACCOUNTS19MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Condition and ContextAn effective internal control system was not in place at the School Corporation in order to ensurecompliance with requirements related to the grant agreement and the Equipment and Real PropertyManagement compliance requirement.A property record or capital asset listing which would include a description of the property, a serialnumber or other identification number, the source of funding for the property (including the federal awardidentification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage offederal participation in the project costs for the federal award under which the property was acquired, thelocation, and use and condition of the property is to be maintained for assets purchased that exceed theSchool Corporation's capitalization threshold.The School Corporation purchased one capital asset, a boiler/chiller, with the Elementary andSecondary School Emergency Relief (ESSER II) Fund award. The boiler/chiller was included in the SchoolCorporation's capital assets listing; however, the capital asset listing did not identify the source of funding.In addition, a physical inventory had not been taken in the past two years and assets were not properlymaintained and safeguarded.The lack of internal controls and noncompliance were systemic issues throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.313(d) states in part:"Management requirements. Procedures for managing equipment (including replacementequipment), whether acquired in whole or in part under a Federal award, until disposition takesplace will, as a minimum, meet the following requirements:(1) Property records must be maintained that include a description of the property, a serialnumber or other identification number, the source of funding for the property (includingthe FAIN), who holds title, the acquisition date, and cost of the property, percentage ofFederal participation in the project costs for the Federal award under which theproperty was acquired, the location, use and condition of the property, and any ultimatedisposition data including the date of disposal and sale price of the property.(2) A physical inventory of the property must be taken and the results reconciled with theproperty records at least once every two years.(3) A control system must be developed to ensure adequate safeguards to prevent loss,damage, or theft of the property. Any loss, damage, or theft must be investigated.. . ."INDIANA STATE BOARD OF ACCOUNTS20MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)CauseManagement had not designed nor implemented a system of internal controls that would haveensured compliance with the grant agreement and the Equipment and Real Property Managementcompliance requirement.EffectThe failure to establish an effective internal control system enabled material noncompliance to goundetected. Noncompliance with the grant agreement and the Equipment and Real Property Managementcompliance requirement could have resulted in the loss of federal funds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish internal controls to ensurecompliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-005Subject: COVID-19 - Education Stabilization Fund - ReportingFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Number: 84.425DFederal Award Number and Year (or Other Identifying Number): S425D200013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Other MattersINDIANA STATE BOARD OF ACCOUNTS22MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Condition and ContextAn effective internal control system was not designed nor implemented at the School Corporationto ensure compliance with the requirements related to the grant agreement and the Reporting compliancerequirement.The School Corporation filed the four required Elementary and Secondary School EmergencyRelief (ESSER) annual data reports. However, the ESSER I, Year 1 and ESSER I, Year 2 reports werenot supported by the School Corporation's records. For each of the reports, two key line items wereselected for verification, none of the line items tested were supported by the School Corporation's records.For the ESSER I, Year 2 report the data included expenditures for two months beyond the reporting period.The lack of internal controls and noncompliance were applicable to the ESSER I grant during theaudit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.334 states in part:"Financial records, supporting documents, statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the dateof submission of the final expenditure report or, for Federal awards that are renewed quarterlyor 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 ofa subrecipient. . . ."2 CFR 200.302(b) states in part:"The financial management system of each non-Federal entity must provide for the following:. . .(2) Accurate, current, and complete disclosure of the financial results of each Federalaward or program in accordance with the reporting requirements set forth in ?? 200.328and 200.329. . . .(3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federalawards, authorizations, obligations, unobligated balances, assets, expenditures,income and interest and be supported by source documentation. . . ."INDIANA STATE BOARD OF ACCOUNTS23MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and formatthat assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out otherresponsibilities under the program."CauseManagement had not designed, nor implemented a system of internal controls that would haveensured compliance or that supporting documentation would have been maintained and available for auditrelated to the Reporting compliance requirement.EffectThe failure to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the Reporting compliance requirement. Noncompliancewith the grant agreement and the Reporting compliance requirement could result in the loss of future federalfunds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and available for audit and comply with the grantagreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.