FAC Explorer

Audit 342416

FY End
2024-06-30
Total Expended
$13.14M
Findings
24
Programs
9
Organization: Lighthouse Academies of Northwest Indiana, Inc. (IN)
Year: 2024 Accepted: 2025-02-13
Auditor: Cliftonlarsonallen (cla)

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
523118 2024-001 Material Weakness - P
523119 2024-001 Material Weakness - P
523120 2024-001 Material Weakness - P
523121 2024-002 Material Weakness - P
523122 2024-002 Material Weakness - P
523123 2024-002 Material Weakness - P
523124 2024-003 Significant Deficiency - B
523125 2024-003 Significant Deficiency - B
523126 2024-003 Significant Deficiency - B
523127 2024-004 Material Weakness - L
523128 2024-004 Material Weakness - L
523129 2024-004 Material Weakness - L
1099560 2024-001 Material Weakness - P
1099561 2024-001 Material Weakness - P
1099562 2024-001 Material Weakness - P
1099563 2024-002 Material Weakness - P
1099564 2024-002 Material Weakness - P
1099565 2024-002 Material Weakness - P
1099566 2024-003 Significant Deficiency - B
1099567 2024-003 Significant Deficiency - B
1099568 2024-003 Significant Deficiency - B
1099569 2024-004 Material Weakness - L
1099570 2024-004 Material Weakness - L
1099571 2024-004 Material Weakness - L

Programs

ALN Program Spent Major Findings
84.010 Title I Grants to Local Educational Agencies $2.96M - 0
10.555 National School Lunch Program $786,923 - 0
84.027 Special Education Grants to States $475,857 - 0
10.553 School Breakfast Program $351,137 - 0
84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) $316,853 - 0
84.424 Student Support and Academic Enrichment Program $248,927 - 0
84.365 English Language Acquisition State Grants $22,607 - 0
84.425 Education Stabilization Fund $21,902 Yes 4
84.173 Special Education Preschool Grants $11,480 - 0

Contacts

Name Title Type
ZFL3M4JGFDN1 Jessica Beasley Auditee
2195011881 Kyla Greenhoe Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance for all awards. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: NWILCS has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of (NWILCS) under programs of the federal government for the year ended June 30, . The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of NWILCS, it is not intended to and does not present the financial position, changes in net assets or cash flows of NWILCS.
Title: NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance for all awards. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: NWILCS has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance for all awards. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years.
Title: NOTE 3 INDIRECT COST RATE Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance for all awards. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: NWILCS has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. NWILCS has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance.

Finding Details

Finding 2024-001
2024 – 001: Audit Adjustments Type of Finding: • Material Weakness in Internal Control Over Financial Reporting Condition: The board and management share the ultimate responsibility for NWILCS’s internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. Various significant audit adjustments were proposed and posted through the audit process. The adjustments were a necessary step in ensuring the financial statements were fairly stated in accordance with U.S. GAAP. Criteria or specific requirement: In an ideal control setting, NWILCS would have a comprehensive control procedure to ensure that the financial statements, including disclosures are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable U.S. GAPP. Context: While performing audit procedures, it was noted that management did not have appropriate procedures in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Effect: It is possible that a misstatement of the NWILCS' financial statements could occur and not be prevented or detected by the NWILCS' internal control. Cause: NWILCS’ controls were not able to detect the adjustments made as part of the audit. NWILCS does not have a comprehensive review process to ensure that the financial statements, including disclosures, are complete and accurate. Repeat finding: No. Recommendation: We recommend that management review controls related to financial statement preparation review at the end of each period. Financial statement preparation should include a review of reconciliations and balances to ensure that financial statement line items are properly stated and classified. Internally prepared financial statements should also be reviewed by members of management outside the finance department on a periodic (monthly or quarterly). Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.
Finding 2024-001
2024 – 001: Audit Adjustments Type of Finding: • Material Weakness in Internal Control Over Financial Reporting Condition: The board and management share the ultimate responsibility for NWILCS’s internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. Various significant audit adjustments were proposed and posted through the audit process. The adjustments were a necessary step in ensuring the financial statements were fairly stated in accordance with U.S. GAAP. Criteria or specific requirement: In an ideal control setting, NWILCS would have a comprehensive control procedure to ensure that the financial statements, including disclosures are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable U.S. GAPP. Context: While performing audit procedures, it was noted that management did not have appropriate procedures in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Effect: It is possible that a misstatement of the NWILCS' financial statements could occur and not be prevented or detected by the NWILCS' internal control. Cause: NWILCS’ controls were not able to detect the adjustments made as part of the audit. NWILCS does not have a comprehensive review process to ensure that the financial statements, including disclosures, are complete and accurate. Repeat finding: No. Recommendation: We recommend that management review controls related to financial statement preparation review at the end of each period. Financial statement preparation should include a review of reconciliations and balances to ensure that financial statement line items are properly stated and classified. Internally prepared financial statements should also be reviewed by members of management outside the finance department on a periodic (monthly or quarterly). Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.
Finding 2024-001
2024 – 001: Audit Adjustments Type of Finding: • Material Weakness in Internal Control Over Financial Reporting Condition: The board and management share the ultimate responsibility for NWILCS’s internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. Various significant audit adjustments were proposed and posted through the audit process. The adjustments were a necessary step in ensuring the financial statements were fairly stated in accordance with U.S. GAAP. Criteria or specific requirement: In an ideal control setting, NWILCS would have a comprehensive control procedure to ensure that the financial statements, including disclosures are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable U.S. GAPP. Context: While performing audit procedures, it was noted that management did not have appropriate procedures in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Effect: It is possible that a misstatement of the NWILCS' financial statements could occur and not be prevented or detected by the NWILCS' internal control. Cause: NWILCS’ controls were not able to detect the adjustments made as part of the audit. NWILCS does not have a comprehensive review process to ensure that the financial statements, including disclosures, are complete and accurate. Repeat finding: No. Recommendation: We recommend that management review controls related to financial statement preparation review at the end of each period. Financial statement preparation should include a review of reconciliations and balances to ensure that financial statement line items are properly stated and classified. Internally prepared financial statements should also be reviewed by members of management outside the finance department on a periodic (monthly or quarterly). Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.
Finding 2024-002
2024 – 002: Interfund Activity Type of Finding: • Material Weakness in Internal Control Over Financial Reporting Condition: The board and management share the ultimate responsibility for NWILCS’s internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. Interfund activity for Gary and East Chicago had not been reviewed on a stand-alone basis to ensure the activity was properly reflected in each school. Criteria or specific requirement: In an ideal control setting, NWILCS would have a comprehensive control procedure to ensure that the financial statements are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable U.S. GAAP and NWILCS’ operations. Context: While performing audit procedures, it was noted that management did not have appropriate procedures in place to provide reasonable assurance that interfund activity is reasonable based upon operations of NWILCS. Effect: It is possible that a misstatement of the NWILCS' financial statements could occur and not be prevented or detected by the NWILCS' internal control. Cause: NWILCS’ controls were not able to detect the adjustments made as part of the audit. NWILCS does not have a comprehensive review process to ensure that the stand alone financial statements for both Gary and East Chicago are complete and accurate. Repeat finding: No. Recommendation: We recommend that management review controls related to interfund activity on a regular basis (monthly or quarterly) to ensure that total activity accurately reflects both Gary and East Chicago on a standalone basis and is reasonable. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.
Finding 2024-002
2024 – 002: Interfund Activity Type of Finding: • Material Weakness in Internal Control Over Financial Reporting Condition: The board and management share the ultimate responsibility for NWILCS’s internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. Interfund activity for Gary and East Chicago had not been reviewed on a stand-alone basis to ensure the activity was properly reflected in each school. Criteria or specific requirement: In an ideal control setting, NWILCS would have a comprehensive control procedure to ensure that the financial statements are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable U.S. GAAP and NWILCS’ operations. Context: While performing audit procedures, it was noted that management did not have appropriate procedures in place to provide reasonable assurance that interfund activity is reasonable based upon operations of NWILCS. Effect: It is possible that a misstatement of the NWILCS' financial statements could occur and not be prevented or detected by the NWILCS' internal control. Cause: NWILCS’ controls were not able to detect the adjustments made as part of the audit. NWILCS does not have a comprehensive review process to ensure that the stand alone financial statements for both Gary and East Chicago are complete and accurate. Repeat finding: No. Recommendation: We recommend that management review controls related to interfund activity on a regular basis (monthly or quarterly) to ensure that total activity accurately reflects both Gary and East Chicago on a standalone basis and is reasonable. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.
Finding 2024-002
2024 – 002: Interfund Activity Type of Finding: • Material Weakness in Internal Control Over Financial Reporting Condition: The board and management share the ultimate responsibility for NWILCS’s internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. Interfund activity for Gary and East Chicago had not been reviewed on a stand-alone basis to ensure the activity was properly reflected in each school. Criteria or specific requirement: In an ideal control setting, NWILCS would have a comprehensive control procedure to ensure that the financial statements are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable U.S. GAAP and NWILCS’ operations. Context: While performing audit procedures, it was noted that management did not have appropriate procedures in place to provide reasonable assurance that interfund activity is reasonable based upon operations of NWILCS. Effect: It is possible that a misstatement of the NWILCS' financial statements could occur and not be prevented or detected by the NWILCS' internal control. Cause: NWILCS’ controls were not able to detect the adjustments made as part of the audit. NWILCS does not have a comprehensive review process to ensure that the stand alone financial statements for both Gary and East Chicago are complete and accurate. Repeat finding: No. Recommendation: We recommend that management review controls related to interfund activity on a regular basis (monthly or quarterly) to ensure that total activity accurately reflects both Gary and East Chicago on a standalone basis and is reasonable. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.
Finding 2024-003
2024 – 003: Allowable Costs Federal Agency: U.S. Department Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425D210013, S425W210015 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or specific requirement: The Compliance Supplement requires that compensation for personal services be charged to the federal grant based upon approved actual time worked on the program and not based on an allocation or budget (2 CFR 200.430(i)). Condition: While performing audit procedures, it was noted that payroll expenses were charged to the grant program but were not supported with time and effort documentation and was for an employee bonus. Questioned costs: $6,631 Context: During the process of obtaining an understanding of internal controls and processing of payroll expenditures, we noted payroll charge to the grant did not have time and effort documentation for amounts charged to the grant and included a bonus employee charged to the grant inaccurately. Cause: Salary figures for salaried employees were charged to the federal grant based on unsupported work actually performed for the program and inaccurate payroll costs were charged to the grant for an employee bonus. Effect: NWILCS has not fully followed compliance attributes with the allowable costs principles set forth by the Compliance Supplement related to allocation of salaries being charged based on approved time worked for a program. Personnel need to reinforce policies to ensure control procedures are in place to ensure salaries charged to a grant are appropriately based on actual approved time worked in a program. Repeat finding: No. Recommendation: We recommend NWILCS ensure policies and procedures for payroll expenditures for grant programs be charged to the federal grant based on approved hours worked in the program. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-003
2024 – 003: Allowable Costs Federal Agency: U.S. Department Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425D210013, S425W210015 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or specific requirement: The Compliance Supplement requires that compensation for personal services be charged to the federal grant based upon approved actual time worked on the program and not based on an allocation or budget (2 CFR 200.430(i)). Condition: While performing audit procedures, it was noted that payroll expenses were charged to the grant program but were not supported with time and effort documentation and was for an employee bonus. Questioned costs: $6,631 Context: During the process of obtaining an understanding of internal controls and processing of payroll expenditures, we noted payroll charge to the grant did not have time and effort documentation for amounts charged to the grant and included a bonus employee charged to the grant inaccurately. Cause: Salary figures for salaried employees were charged to the federal grant based on unsupported work actually performed for the program and inaccurate payroll costs were charged to the grant for an employee bonus. Effect: NWILCS has not fully followed compliance attributes with the allowable costs principles set forth by the Compliance Supplement related to allocation of salaries being charged based on approved time worked for a program. Personnel need to reinforce policies to ensure control procedures are in place to ensure salaries charged to a grant are appropriately based on actual approved time worked in a program. Repeat finding: No. Recommendation: We recommend NWILCS ensure policies and procedures for payroll expenditures for grant programs be charged to the federal grant based on approved hours worked in the program. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-003
2024 – 003: Allowable Costs Federal Agency: U.S. Department Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425D210013, S425W210015 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or specific requirement: The Compliance Supplement requires that compensation for personal services be charged to the federal grant based upon approved actual time worked on the program and not based on an allocation or budget (2 CFR 200.430(i)). Condition: While performing audit procedures, it was noted that payroll expenses were charged to the grant program but were not supported with time and effort documentation and was for an employee bonus. Questioned costs: $6,631 Context: During the process of obtaining an understanding of internal controls and processing of payroll expenditures, we noted payroll charge to the grant did not have time and effort documentation for amounts charged to the grant and included a bonus employee charged to the grant inaccurately. Cause: Salary figures for salaried employees were charged to the federal grant based on unsupported work actually performed for the program and inaccurate payroll costs were charged to the grant for an employee bonus. Effect: NWILCS has not fully followed compliance attributes with the allowable costs principles set forth by the Compliance Supplement related to allocation of salaries being charged based on approved time worked for a program. Personnel need to reinforce policies to ensure control procedures are in place to ensure salaries charged to a grant are appropriately based on actual approved time worked in a program. Repeat finding: No. Recommendation: We recommend NWILCS ensure policies and procedures for payroll expenditures for grant programs be charged to the federal grant based on approved hours worked in the program. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-004
2024 – 004: Reporting Federal Agency: U.S. Department Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425D210013, S425W210015 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Material Weakness in Internal Control Over Compliance • Other Matters Criteria or specific requirement: Grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. Amounts reports must be supported by the unit's records. Per 2 CFR 200.303, The non-Federal entity must: (a) Establish and maintain effective internal control over the federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States of the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: While performing audit procedures, it was noted that NWILCS did not file the required annual report that was due during the audit period. Questioned costs: None. Context: During audit testing, it was noted that the annual reporting was not completed by NWILCS as required during the audit period. Cause: The reporting requirement was missed due to management’s oversight. Effect: NWILCS has not fully followed compliance attributes with the reporting requirements set forth by the Compliance Supplement. Personnel need to reinforce policies to ensure control procedures are in place to ensure all required grant compliance items are reviewed, approved, and completed in accordance with grant requirements. Repeat finding: No. Recommendation: We recommend that NWILCS implement procedures and controls to ensure the required reports are accurate and completed timely. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-004
2024 – 004: Reporting Federal Agency: U.S. Department Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425D210013, S425W210015 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Material Weakness in Internal Control Over Compliance • Other Matters Criteria or specific requirement: Grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. Amounts reports must be supported by the unit's records. Per 2 CFR 200.303, The non-Federal entity must: (a) Establish and maintain effective internal control over the federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States of the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: While performing audit procedures, it was noted that NWILCS did not file the required annual report that was due during the audit period. Questioned costs: None. Context: During audit testing, it was noted that the annual reporting was not completed by NWILCS as required during the audit period. Cause: The reporting requirement was missed due to management’s oversight. Effect: NWILCS has not fully followed compliance attributes with the reporting requirements set forth by the Compliance Supplement. Personnel need to reinforce policies to ensure control procedures are in place to ensure all required grant compliance items are reviewed, approved, and completed in accordance with grant requirements. Repeat finding: No. Recommendation: We recommend that NWILCS implement procedures and controls to ensure the required reports are accurate and completed timely. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-004
2024 – 004: Reporting Federal Agency: U.S. Department Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425D210013, S425W210015 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Material Weakness in Internal Control Over Compliance • Other Matters Criteria or specific requirement: Grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. Amounts reports must be supported by the unit's records. Per 2 CFR 200.303, The non-Federal entity must: (a) Establish and maintain effective internal control over the federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States of the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: While performing audit procedures, it was noted that NWILCS did not file the required annual report that was due during the audit period. Questioned costs: None. Context: During audit testing, it was noted that the annual reporting was not completed by NWILCS as required during the audit period. Cause: The reporting requirement was missed due to management’s oversight. Effect: NWILCS has not fully followed compliance attributes with the reporting requirements set forth by the Compliance Supplement. Personnel need to reinforce policies to ensure control procedures are in place to ensure all required grant compliance items are reviewed, approved, and completed in accordance with grant requirements. Repeat finding: No. Recommendation: We recommend that NWILCS implement procedures and controls to ensure the required reports are accurate and completed timely. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-001
2024 – 001: Audit Adjustments Type of Finding: • Material Weakness in Internal Control Over Financial Reporting Condition: The board and management share the ultimate responsibility for NWILCS’s internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. Various significant audit adjustments were proposed and posted through the audit process. The adjustments were a necessary step in ensuring the financial statements were fairly stated in accordance with U.S. GAAP. Criteria or specific requirement: In an ideal control setting, NWILCS would have a comprehensive control procedure to ensure that the financial statements, including disclosures are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable U.S. GAPP. Context: While performing audit procedures, it was noted that management did not have appropriate procedures in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Effect: It is possible that a misstatement of the NWILCS' financial statements could occur and not be prevented or detected by the NWILCS' internal control. Cause: NWILCS’ controls were not able to detect the adjustments made as part of the audit. NWILCS does not have a comprehensive review process to ensure that the financial statements, including disclosures, are complete and accurate. Repeat finding: No. Recommendation: We recommend that management review controls related to financial statement preparation review at the end of each period. Financial statement preparation should include a review of reconciliations and balances to ensure that financial statement line items are properly stated and classified. Internally prepared financial statements should also be reviewed by members of management outside the finance department on a periodic (monthly or quarterly). Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.
Finding 2024-001
2024 – 001: Audit Adjustments Type of Finding: • Material Weakness in Internal Control Over Financial Reporting Condition: The board and management share the ultimate responsibility for NWILCS’s internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. Various significant audit adjustments were proposed and posted through the audit process. The adjustments were a necessary step in ensuring the financial statements were fairly stated in accordance with U.S. GAAP. Criteria or specific requirement: In an ideal control setting, NWILCS would have a comprehensive control procedure to ensure that the financial statements, including disclosures are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable U.S. GAPP. Context: While performing audit procedures, it was noted that management did not have appropriate procedures in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Effect: It is possible that a misstatement of the NWILCS' financial statements could occur and not be prevented or detected by the NWILCS' internal control. Cause: NWILCS’ controls were not able to detect the adjustments made as part of the audit. NWILCS does not have a comprehensive review process to ensure that the financial statements, including disclosures, are complete and accurate. Repeat finding: No. Recommendation: We recommend that management review controls related to financial statement preparation review at the end of each period. Financial statement preparation should include a review of reconciliations and balances to ensure that financial statement line items are properly stated and classified. Internally prepared financial statements should also be reviewed by members of management outside the finance department on a periodic (monthly or quarterly). Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.
Finding 2024-001
2024 – 001: Audit Adjustments Type of Finding: • Material Weakness in Internal Control Over Financial Reporting Condition: The board and management share the ultimate responsibility for NWILCS’s internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. Various significant audit adjustments were proposed and posted through the audit process. The adjustments were a necessary step in ensuring the financial statements were fairly stated in accordance with U.S. GAAP. Criteria or specific requirement: In an ideal control setting, NWILCS would have a comprehensive control procedure to ensure that the financial statements, including disclosures are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable U.S. GAPP. Context: While performing audit procedures, it was noted that management did not have appropriate procedures in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Effect: It is possible that a misstatement of the NWILCS' financial statements could occur and not be prevented or detected by the NWILCS' internal control. Cause: NWILCS’ controls were not able to detect the adjustments made as part of the audit. NWILCS does not have a comprehensive review process to ensure that the financial statements, including disclosures, are complete and accurate. Repeat finding: No. Recommendation: We recommend that management review controls related to financial statement preparation review at the end of each period. Financial statement preparation should include a review of reconciliations and balances to ensure that financial statement line items are properly stated and classified. Internally prepared financial statements should also be reviewed by members of management outside the finance department on a periodic (monthly or quarterly). Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.
Finding 2024-002
2024 – 002: Interfund Activity Type of Finding: • Material Weakness in Internal Control Over Financial Reporting Condition: The board and management share the ultimate responsibility for NWILCS’s internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. Interfund activity for Gary and East Chicago had not been reviewed on a stand-alone basis to ensure the activity was properly reflected in each school. Criteria or specific requirement: In an ideal control setting, NWILCS would have a comprehensive control procedure to ensure that the financial statements are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable U.S. GAAP and NWILCS’ operations. Context: While performing audit procedures, it was noted that management did not have appropriate procedures in place to provide reasonable assurance that interfund activity is reasonable based upon operations of NWILCS. Effect: It is possible that a misstatement of the NWILCS' financial statements could occur and not be prevented or detected by the NWILCS' internal control. Cause: NWILCS’ controls were not able to detect the adjustments made as part of the audit. NWILCS does not have a comprehensive review process to ensure that the stand alone financial statements for both Gary and East Chicago are complete and accurate. Repeat finding: No. Recommendation: We recommend that management review controls related to interfund activity on a regular basis (monthly or quarterly) to ensure that total activity accurately reflects both Gary and East Chicago on a standalone basis and is reasonable. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.
Finding 2024-002
2024 – 002: Interfund Activity Type of Finding: • Material Weakness in Internal Control Over Financial Reporting Condition: The board and management share the ultimate responsibility for NWILCS’s internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. Interfund activity for Gary and East Chicago had not been reviewed on a stand-alone basis to ensure the activity was properly reflected in each school. Criteria or specific requirement: In an ideal control setting, NWILCS would have a comprehensive control procedure to ensure that the financial statements are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable U.S. GAAP and NWILCS’ operations. Context: While performing audit procedures, it was noted that management did not have appropriate procedures in place to provide reasonable assurance that interfund activity is reasonable based upon operations of NWILCS. Effect: It is possible that a misstatement of the NWILCS' financial statements could occur and not be prevented or detected by the NWILCS' internal control. Cause: NWILCS’ controls were not able to detect the adjustments made as part of the audit. NWILCS does not have a comprehensive review process to ensure that the stand alone financial statements for both Gary and East Chicago are complete and accurate. Repeat finding: No. Recommendation: We recommend that management review controls related to interfund activity on a regular basis (monthly or quarterly) to ensure that total activity accurately reflects both Gary and East Chicago on a standalone basis and is reasonable. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.
Finding 2024-002
2024 – 002: Interfund Activity Type of Finding: • Material Weakness in Internal Control Over Financial Reporting Condition: The board and management share the ultimate responsibility for NWILCS’s internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. Interfund activity for Gary and East Chicago had not been reviewed on a stand-alone basis to ensure the activity was properly reflected in each school. Criteria or specific requirement: In an ideal control setting, NWILCS would have a comprehensive control procedure to ensure that the financial statements are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable U.S. GAAP and NWILCS’ operations. Context: While performing audit procedures, it was noted that management did not have appropriate procedures in place to provide reasonable assurance that interfund activity is reasonable based upon operations of NWILCS. Effect: It is possible that a misstatement of the NWILCS' financial statements could occur and not be prevented or detected by the NWILCS' internal control. Cause: NWILCS’ controls were not able to detect the adjustments made as part of the audit. NWILCS does not have a comprehensive review process to ensure that the stand alone financial statements for both Gary and East Chicago are complete and accurate. Repeat finding: No. Recommendation: We recommend that management review controls related to interfund activity on a regular basis (monthly or quarterly) to ensure that total activity accurately reflects both Gary and East Chicago on a standalone basis and is reasonable. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.
Finding 2024-003
2024 – 003: Allowable Costs Federal Agency: U.S. Department Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425D210013, S425W210015 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or specific requirement: The Compliance Supplement requires that compensation for personal services be charged to the federal grant based upon approved actual time worked on the program and not based on an allocation or budget (2 CFR 200.430(i)). Condition: While performing audit procedures, it was noted that payroll expenses were charged to the grant program but were not supported with time and effort documentation and was for an employee bonus. Questioned costs: $6,631 Context: During the process of obtaining an understanding of internal controls and processing of payroll expenditures, we noted payroll charge to the grant did not have time and effort documentation for amounts charged to the grant and included a bonus employee charged to the grant inaccurately. Cause: Salary figures for salaried employees were charged to the federal grant based on unsupported work actually performed for the program and inaccurate payroll costs were charged to the grant for an employee bonus. Effect: NWILCS has not fully followed compliance attributes with the allowable costs principles set forth by the Compliance Supplement related to allocation of salaries being charged based on approved time worked for a program. Personnel need to reinforce policies to ensure control procedures are in place to ensure salaries charged to a grant are appropriately based on actual approved time worked in a program. Repeat finding: No. Recommendation: We recommend NWILCS ensure policies and procedures for payroll expenditures for grant programs be charged to the federal grant based on approved hours worked in the program. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-003
2024 – 003: Allowable Costs Federal Agency: U.S. Department Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425D210013, S425W210015 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or specific requirement: The Compliance Supplement requires that compensation for personal services be charged to the federal grant based upon approved actual time worked on the program and not based on an allocation or budget (2 CFR 200.430(i)). Condition: While performing audit procedures, it was noted that payroll expenses were charged to the grant program but were not supported with time and effort documentation and was for an employee bonus. Questioned costs: $6,631 Context: During the process of obtaining an understanding of internal controls and processing of payroll expenditures, we noted payroll charge to the grant did not have time and effort documentation for amounts charged to the grant and included a bonus employee charged to the grant inaccurately. Cause: Salary figures for salaried employees were charged to the federal grant based on unsupported work actually performed for the program and inaccurate payroll costs were charged to the grant for an employee bonus. Effect: NWILCS has not fully followed compliance attributes with the allowable costs principles set forth by the Compliance Supplement related to allocation of salaries being charged based on approved time worked for a program. Personnel need to reinforce policies to ensure control procedures are in place to ensure salaries charged to a grant are appropriately based on actual approved time worked in a program. Repeat finding: No. Recommendation: We recommend NWILCS ensure policies and procedures for payroll expenditures for grant programs be charged to the federal grant based on approved hours worked in the program. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-003
2024 – 003: Allowable Costs Federal Agency: U.S. Department Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425D210013, S425W210015 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or specific requirement: The Compliance Supplement requires that compensation for personal services be charged to the federal grant based upon approved actual time worked on the program and not based on an allocation or budget (2 CFR 200.430(i)). Condition: While performing audit procedures, it was noted that payroll expenses were charged to the grant program but were not supported with time and effort documentation and was for an employee bonus. Questioned costs: $6,631 Context: During the process of obtaining an understanding of internal controls and processing of payroll expenditures, we noted payroll charge to the grant did not have time and effort documentation for amounts charged to the grant and included a bonus employee charged to the grant inaccurately. Cause: Salary figures for salaried employees were charged to the federal grant based on unsupported work actually performed for the program and inaccurate payroll costs were charged to the grant for an employee bonus. Effect: NWILCS has not fully followed compliance attributes with the allowable costs principles set forth by the Compliance Supplement related to allocation of salaries being charged based on approved time worked for a program. Personnel need to reinforce policies to ensure control procedures are in place to ensure salaries charged to a grant are appropriately based on actual approved time worked in a program. Repeat finding: No. Recommendation: We recommend NWILCS ensure policies and procedures for payroll expenditures for grant programs be charged to the federal grant based on approved hours worked in the program. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-004
2024 – 004: Reporting Federal Agency: U.S. Department Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425D210013, S425W210015 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Material Weakness in Internal Control Over Compliance • Other Matters Criteria or specific requirement: Grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. Amounts reports must be supported by the unit's records. Per 2 CFR 200.303, The non-Federal entity must: (a) Establish and maintain effective internal control over the federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States of the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: While performing audit procedures, it was noted that NWILCS did not file the required annual report that was due during the audit period. Questioned costs: None. Context: During audit testing, it was noted that the annual reporting was not completed by NWILCS as required during the audit period. Cause: The reporting requirement was missed due to management’s oversight. Effect: NWILCS has not fully followed compliance attributes with the reporting requirements set forth by the Compliance Supplement. Personnel need to reinforce policies to ensure control procedures are in place to ensure all required grant compliance items are reviewed, approved, and completed in accordance with grant requirements. Repeat finding: No. Recommendation: We recommend that NWILCS implement procedures and controls to ensure the required reports are accurate and completed timely. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-004
2024 – 004: Reporting Federal Agency: U.S. Department Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425D210013, S425W210015 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Material Weakness in Internal Control Over Compliance • Other Matters Criteria or specific requirement: Grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. Amounts reports must be supported by the unit's records. Per 2 CFR 200.303, The non-Federal entity must: (a) Establish and maintain effective internal control over the federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States of the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: While performing audit procedures, it was noted that NWILCS did not file the required annual report that was due during the audit period. Questioned costs: None. Context: During audit testing, it was noted that the annual reporting was not completed by NWILCS as required during the audit period. Cause: The reporting requirement was missed due to management’s oversight. Effect: NWILCS has not fully followed compliance attributes with the reporting requirements set forth by the Compliance Supplement. Personnel need to reinforce policies to ensure control procedures are in place to ensure all required grant compliance items are reviewed, approved, and completed in accordance with grant requirements. Repeat finding: No. Recommendation: We recommend that NWILCS implement procedures and controls to ensure the required reports are accurate and completed timely. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-004
2024 – 004: Reporting Federal Agency: U.S. Department Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425D210013, S425W210015 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Material Weakness in Internal Control Over Compliance • Other Matters Criteria or specific requirement: Grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. Amounts reports must be supported by the unit's records. Per 2 CFR 200.303, The non-Federal entity must: (a) Establish and maintain effective internal control over the federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States of the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: While performing audit procedures, it was noted that NWILCS did not file the required annual report that was due during the audit period. Questioned costs: None. Context: During audit testing, it was noted that the annual reporting was not completed by NWILCS as required during the audit period. Cause: The reporting requirement was missed due to management’s oversight. Effect: NWILCS has not fully followed compliance attributes with the reporting requirements set forth by the Compliance Supplement. Personnel need to reinforce policies to ensure control procedures are in place to ensure all required grant compliance items are reviewed, approved, and completed in accordance with grant requirements. Repeat finding: No. Recommendation: We recommend that NWILCS implement procedures and controls to ensure the required reports are accurate and completed timely. Views of responsible officials: There is no disagreement with the audit finding.