Audit 346557

FINDING 2024-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context An effective internal control system was not designed or implemented at the School Corporation related to food service management company claims, food service payroll benefit claims, and food service payroll to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and were only for the operation of the food service program. INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Four invoices for payment to the FSMC, which totaled $885,477, were selected for testing. Supporting documentation was presented for only $760,332 of the costs invoiced. Due to the lack of supporting documentation, the Indiana State Board of Accounts was unable to determine if the remaining costs paid, $125,145, were allowable expenditures. The costs that were not properly documented were considered questioned costs. Additionally, in the supporting documentation presented for audit, sales tax was erroneously paid totaling $862. These unallowable costs were considered questioned costs. Payroll In fiscal year 2023-2024, the School Corporation's CTE Coordinator was assigned a new role, Food Service Director/Inventory Coordinator, which included compensation paid out of the Child Nutrition Cluster grant funds. The new role began in May 2024. The Food Service Director did not maintain documentation of time spent on federal program and nonfederal program activities. The total paid to the Food Service Director from the School Lunch fund without proper documentation was $4,358. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: INDIANA STATE BOARD OF ACCOUNTS 23 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls over the invoices paid to the FSMC and payroll paid to the Food Service Director were not properly designed or implemented by management. The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced and did not ensure the Food Service Director maintained a record of actual time spent on child nutrition duties. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $130,365 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context An effective internal control system was not designed or implemented at the School Corporation related to food service management company claims, food service payroll benefit claims, and food service payroll to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and were only for the operation of the food service program. INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Four invoices for payment to the FSMC, which totaled $885,477, were selected for testing. Supporting documentation was presented for only $760,332 of the costs invoiced. Due to the lack of supporting documentation, the Indiana State Board of Accounts was unable to determine if the remaining costs paid, $125,145, were allowable expenditures. The costs that were not properly documented were considered questioned costs. Additionally, in the supporting documentation presented for audit, sales tax was erroneously paid totaling $862. These unallowable costs were considered questioned costs. Payroll In fiscal year 2023-2024, the School Corporation's CTE Coordinator was assigned a new role, Food Service Director/Inventory Coordinator, which included compensation paid out of the Child Nutrition Cluster grant funds. The new role began in May 2024. The Food Service Director did not maintain documentation of time spent on federal program and nonfederal program activities. The total paid to the Food Service Director from the School Lunch fund without proper documentation was $4,358. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: INDIANA STATE BOARD OF ACCOUNTS 23 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls over the invoices paid to the FSMC and payroll paid to the Food Service Director were not properly designed or implemented by management. The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced and did not ensure the Food Service Director maintained a record of actual time spent on child nutrition duties. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $130,365 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context An effective internal control system was not designed or implemented at the School Corporation related to food service management company claims, food service payroll benefit claims, and food service payroll to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and were only for the operation of the food service program. INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Four invoices for payment to the FSMC, which totaled $885,477, were selected for testing. Supporting documentation was presented for only $760,332 of the costs invoiced. Due to the lack of supporting documentation, the Indiana State Board of Accounts was unable to determine if the remaining costs paid, $125,145, were allowable expenditures. The costs that were not properly documented were considered questioned costs. Additionally, in the supporting documentation presented for audit, sales tax was erroneously paid totaling $862. These unallowable costs were considered questioned costs. Payroll In fiscal year 2023-2024, the School Corporation's CTE Coordinator was assigned a new role, Food Service Director/Inventory Coordinator, which included compensation paid out of the Child Nutrition Cluster grant funds. The new role began in May 2024. The Food Service Director did not maintain documentation of time spent on federal program and nonfederal program activities. The total paid to the Food Service Director from the School Lunch fund without proper documentation was $4,358. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: INDIANA STATE BOARD OF ACCOUNTS 23 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls over the invoices paid to the FSMC and payroll paid to the Food Service Director were not properly designed or implemented by management. The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced and did not ensure the Food Service Director maintained a record of actual time spent on child nutrition duties. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $130,365 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context An effective internal control system was not designed or implemented at the School Corporation related to food service management company claims, food service payroll benefit claims, and food service payroll to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and were only for the operation of the food service program. INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Four invoices for payment to the FSMC, which totaled $885,477, were selected for testing. Supporting documentation was presented for only $760,332 of the costs invoiced. Due to the lack of supporting documentation, the Indiana State Board of Accounts was unable to determine if the remaining costs paid, $125,145, were allowable expenditures. The costs that were not properly documented were considered questioned costs. Additionally, in the supporting documentation presented for audit, sales tax was erroneously paid totaling $862. These unallowable costs were considered questioned costs. Payroll In fiscal year 2023-2024, the School Corporation's CTE Coordinator was assigned a new role, Food Service Director/Inventory Coordinator, which included compensation paid out of the Child Nutrition Cluster grant funds. The new role began in May 2024. The Food Service Director did not maintain documentation of time spent on federal program and nonfederal program activities. The total paid to the Food Service Director from the School Lunch fund without proper documentation was $4,358. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: INDIANA STATE BOARD OF ACCOUNTS 23 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls over the invoices paid to the FSMC and payroll paid to the Food Service Director were not properly designed or implemented by management. The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced and did not ensure the Food Service Director maintained a record of actual time spent on child nutrition duties. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $130,365 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context An effective internal control system was not designed or implemented at the School Corporation related to food service management company claims, food service payroll benefit claims, and food service payroll to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and were only for the operation of the food service program. INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Four invoices for payment to the FSMC, which totaled $885,477, were selected for testing. Supporting documentation was presented for only $760,332 of the costs invoiced. Due to the lack of supporting documentation, the Indiana State Board of Accounts was unable to determine if the remaining costs paid, $125,145, were allowable expenditures. The costs that were not properly documented were considered questioned costs. Additionally, in the supporting documentation presented for audit, sales tax was erroneously paid totaling $862. These unallowable costs were considered questioned costs. Payroll In fiscal year 2023-2024, the School Corporation's CTE Coordinator was assigned a new role, Food Service Director/Inventory Coordinator, which included compensation paid out of the Child Nutrition Cluster grant funds. The new role began in May 2024. The Food Service Director did not maintain documentation of time spent on federal program and nonfederal program activities. The total paid to the Food Service Director from the School Lunch fund without proper documentation was $4,358. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: INDIANA STATE BOARD OF ACCOUNTS 23 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls over the invoices paid to the FSMC and payroll paid to the Food Service Director were not properly designed or implemented by management. The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced and did not ensure the Food Service Director maintained a record of actual time spent on child nutrition duties. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $130,365 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context An effective internal control system was not designed or implemented at the School Corporation related to food service management company claims, food service payroll benefit claims, and food service payroll to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and were only for the operation of the food service program. INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Four invoices for payment to the FSMC, which totaled $885,477, were selected for testing. Supporting documentation was presented for only $760,332 of the costs invoiced. Due to the lack of supporting documentation, the Indiana State Board of Accounts was unable to determine if the remaining costs paid, $125,145, were allowable expenditures. The costs that were not properly documented were considered questioned costs. Additionally, in the supporting documentation presented for audit, sales tax was erroneously paid totaling $862. These unallowable costs were considered questioned costs. Payroll In fiscal year 2023-2024, the School Corporation's CTE Coordinator was assigned a new role, Food Service Director/Inventory Coordinator, which included compensation paid out of the Child Nutrition Cluster grant funds. The new role began in May 2024. The Food Service Director did not maintain documentation of time spent on federal program and nonfederal program activities. The total paid to the Food Service Director from the School Lunch fund without proper documentation was $4,358. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: INDIANA STATE BOARD OF ACCOUNTS 23 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls over the invoices paid to the FSMC and payroll paid to the Food Service Director were not properly designed or implemented by management. The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced and did not ensure the Food Service Director maintained a record of actual time spent on child nutrition duties. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $130,365 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 24 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-004. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation contracted with a food service management company (FSMC) for the operation of the food service program. The School Corporation did not have policies or procedures to ensure compliance with procurement requirements to verify that the invoices submitted to the School Corporation were those actually paid by the FSMC or to ensure that the FSMC invoices included credits for any discounts, rebates, or other credits. The School Corporation did not request, nor did the FSMC provide, sufficient documentation to verify that the invoices received by the School Corporation encompassed the same invoices that were paid by the FSMC and that the products charged were received. The School Corporation also did not verify the return of discounts, rebates, or credits from the FSMC. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (iv) The contractor must identify the amount of each discount, rebate and other applicable credit on bills and invoices presented to the school food authority for payment and individually identify the amount as a discount, rebate, or in the case of other applicable credits, the nature of the credit. If approved by the State agency, the school food authority may permit the contractor to report this information on a less frequent basis than monthly, but no less frequently than annually; (v) The contractor must identify the method by which it will report discounts, rebates and other applicable credits allocable to the contract that are not reported prior to conclusion of the contract; and (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." INDIANA STATE BOARD OF ACCOUNTS 25 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced or verify any credits or discounts received or review the invoices that were provided. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls to ensure compliance with the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 24 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-004. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation contracted with a food service management company (FSMC) for the operation of the food service program. The School Corporation did not have policies or procedures to ensure compliance with procurement requirements to verify that the invoices submitted to the School Corporation were those actually paid by the FSMC or to ensure that the FSMC invoices included credits for any discounts, rebates, or other credits. The School Corporation did not request, nor did the FSMC provide, sufficient documentation to verify that the invoices received by the School Corporation encompassed the same invoices that were paid by the FSMC and that the products charged were received. The School Corporation also did not verify the return of discounts, rebates, or credits from the FSMC. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (iv) The contractor must identify the amount of each discount, rebate and other applicable credit on bills and invoices presented to the school food authority for payment and individually identify the amount as a discount, rebate, or in the case of other applicable credits, the nature of the credit. If approved by the State agency, the school food authority may permit the contractor to report this information on a less frequent basis than monthly, but no less frequently than annually; (v) The contractor must identify the method by which it will report discounts, rebates and other applicable credits allocable to the contract that are not reported prior to conclusion of the contract; and (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." INDIANA STATE BOARD OF ACCOUNTS 25 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced or verify any credits or discounts received or review the invoices that were provided. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls to ensure compliance with the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 24 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-004. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation contracted with a food service management company (FSMC) for the operation of the food service program. The School Corporation did not have policies or procedures to ensure compliance with procurement requirements to verify that the invoices submitted to the School Corporation were those actually paid by the FSMC or to ensure that the FSMC invoices included credits for any discounts, rebates, or other credits. The School Corporation did not request, nor did the FSMC provide, sufficient documentation to verify that the invoices received by the School Corporation encompassed the same invoices that were paid by the FSMC and that the products charged were received. The School Corporation also did not verify the return of discounts, rebates, or credits from the FSMC. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (iv) The contractor must identify the amount of each discount, rebate and other applicable credit on bills and invoices presented to the school food authority for payment and individually identify the amount as a discount, rebate, or in the case of other applicable credits, the nature of the credit. If approved by the State agency, the school food authority may permit the contractor to report this information on a less frequent basis than monthly, but no less frequently than annually; (v) The contractor must identify the method by which it will report discounts, rebates and other applicable credits allocable to the contract that are not reported prior to conclusion of the contract; and (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." INDIANA STATE BOARD OF ACCOUNTS 25 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced or verify any credits or discounts received or review the invoices that were provided. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls to ensure compliance with the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 24 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-004. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation contracted with a food service management company (FSMC) for the operation of the food service program. The School Corporation did not have policies or procedures to ensure compliance with procurement requirements to verify that the invoices submitted to the School Corporation were those actually paid by the FSMC or to ensure that the FSMC invoices included credits for any discounts, rebates, or other credits. The School Corporation did not request, nor did the FSMC provide, sufficient documentation to verify that the invoices received by the School Corporation encompassed the same invoices that were paid by the FSMC and that the products charged were received. The School Corporation also did not verify the return of discounts, rebates, or credits from the FSMC. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (iv) The contractor must identify the amount of each discount, rebate and other applicable credit on bills and invoices presented to the school food authority for payment and individually identify the amount as a discount, rebate, or in the case of other applicable credits, the nature of the credit. If approved by the State agency, the school food authority may permit the contractor to report this information on a less frequent basis than monthly, but no less frequently than annually; (v) The contractor must identify the method by which it will report discounts, rebates and other applicable credits allocable to the contract that are not reported prior to conclusion of the contract; and (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." INDIANA STATE BOARD OF ACCOUNTS 25 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced or verify any credits or discounts received or review the invoices that were provided. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls to ensure compliance with the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 24 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-004. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation contracted with a food service management company (FSMC) for the operation of the food service program. The School Corporation did not have policies or procedures to ensure compliance with procurement requirements to verify that the invoices submitted to the School Corporation were those actually paid by the FSMC or to ensure that the FSMC invoices included credits for any discounts, rebates, or other credits. The School Corporation did not request, nor did the FSMC provide, sufficient documentation to verify that the invoices received by the School Corporation encompassed the same invoices that were paid by the FSMC and that the products charged were received. The School Corporation also did not verify the return of discounts, rebates, or credits from the FSMC. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (iv) The contractor must identify the amount of each discount, rebate and other applicable credit on bills and invoices presented to the school food authority for payment and individually identify the amount as a discount, rebate, or in the case of other applicable credits, the nature of the credit. If approved by the State agency, the school food authority may permit the contractor to report this information on a less frequent basis than monthly, but no less frequently than annually; (v) The contractor must identify the method by which it will report discounts, rebates and other applicable credits allocable to the contract that are not reported prior to conclusion of the contract; and (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." INDIANA STATE BOARD OF ACCOUNTS 25 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced or verify any credits or discounts received or review the invoices that were provided. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls to ensure compliance with the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 24 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-004. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation contracted with a food service management company (FSMC) for the operation of the food service program. The School Corporation did not have policies or procedures to ensure compliance with procurement requirements to verify that the invoices submitted to the School Corporation were those actually paid by the FSMC or to ensure that the FSMC invoices included credits for any discounts, rebates, or other credits. The School Corporation did not request, nor did the FSMC provide, sufficient documentation to verify that the invoices received by the School Corporation encompassed the same invoices that were paid by the FSMC and that the products charged were received. The School Corporation also did not verify the return of discounts, rebates, or credits from the FSMC. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (iv) The contractor must identify the amount of each discount, rebate and other applicable credit on bills and invoices presented to the school food authority for payment and individually identify the amount as a discount, rebate, or in the case of other applicable credits, the nature of the credit. If approved by the State agency, the school food authority may permit the contractor to report this information on a less frequent basis than monthly, but no less frequently than annually; (v) The contractor must identify the method by which it will report discounts, rebates and other applicable credits allocable to the contract that are not reported prior to conclusion of the contract; and (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." INDIANA STATE BOARD OF ACCOUNTS 25 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced or verify any credits or discounts received or review the invoices that were provided. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls to ensure compliance with the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-005 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Department of Education based upon the number of meals served for the month. The Claims were prepared by the Food Service Manager or food service management company (FSMC) employee. INDIANA STATE BOARD OF ACCOUNTS 26 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation maintained manual meal count records. A point-of-sale system (POS) was used for some schools in some months, but it was not consistent. The reports from the POS identified second student meals and staff meals that were included in the amounts claimed for reimbursement. For all three Claims tested, there were differences between the Claims submitted and the School Corporation's detail meal count reports, resulting in over and under reporting and reimbursement. The Claims tested contained the following errors:  The December 2022 claim reported 41 more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed reimbursement totaling $109. Of this total, $59 (22 meals) was due to improperly claiming second student or staff meals.  The March 2023 claim in total reported more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed meals totaling $4,254. Of this total, $4,144 was due to claiming second student or staff meals, totaling $1,035, for breakfast and lunch. The School Corporation also underclaimed snacks by 421, which resulted in under reimbursement of $455. Finally, the claim also contained overcount errors of 136 meals, resulting in overclaimed reimbursement of $565.  The August 2023 claim reported fewer meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in underclaimed meals in net totaling $11,474. The School Corporation did not claim meals served on August 31, 2023, totaling 3,879 meals. This resulted in underclaimed meal reimbursement totaling $13,767. The School Corporation also claimed 141 second student and staff meals, which resulted in overclaimed reimbursement totaling $480. Finally, the claim also contained overcount errors of 497 meals, resulting in overclaimed reimbursement of $1,813. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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 Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." INDIANA STATE BOARD OF ACCOUNTS 27 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not have effective internal control procedures in place over the Claims submitted. The Claims did not contain evidence of an oversight or review process in place to prevent, or detect and correct, errors. The Claims were prepared based upon a summary sheet prepared by the FSMC employee and were not verified back to the source records. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and develop policies and procedures over the preparation and review of claims to ensure appropriate reviews, approval, and oversight are taking place. Additionally, management should develop policies and procedures to ensure that the FSMC provides the School Corporation with complete and accurate information for all claim submissions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-005 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Department of Education based upon the number of meals served for the month. The Claims were prepared by the Food Service Manager or food service management company (FSMC) employee. INDIANA STATE BOARD OF ACCOUNTS 26 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation maintained manual meal count records. A point-of-sale system (POS) was used for some schools in some months, but it was not consistent. The reports from the POS identified second student meals and staff meals that were included in the amounts claimed for reimbursement. For all three Claims tested, there were differences between the Claims submitted and the School Corporation's detail meal count reports, resulting in over and under reporting and reimbursement. The Claims tested contained the following errors:  The December 2022 claim reported 41 more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed reimbursement totaling $109. Of this total, $59 (22 meals) was due to improperly claiming second student or staff meals.  The March 2023 claim in total reported more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed meals totaling $4,254. Of this total, $4,144 was due to claiming second student or staff meals, totaling $1,035, for breakfast and lunch. The School Corporation also underclaimed snacks by 421, which resulted in under reimbursement of $455. Finally, the claim also contained overcount errors of 136 meals, resulting in overclaimed reimbursement of $565.  The August 2023 claim reported fewer meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in underclaimed meals in net totaling $11,474. The School Corporation did not claim meals served on August 31, 2023, totaling 3,879 meals. This resulted in underclaimed meal reimbursement totaling $13,767. The School Corporation also claimed 141 second student and staff meals, which resulted in overclaimed reimbursement totaling $480. Finally, the claim also contained overcount errors of 497 meals, resulting in overclaimed reimbursement of $1,813. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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 Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." INDIANA STATE BOARD OF ACCOUNTS 27 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not have effective internal control procedures in place over the Claims submitted. The Claims did not contain evidence of an oversight or review process in place to prevent, or detect and correct, errors. The Claims were prepared based upon a summary sheet prepared by the FSMC employee and were not verified back to the source records. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and develop policies and procedures over the preparation and review of claims to ensure appropriate reviews, approval, and oversight are taking place. Additionally, management should develop policies and procedures to ensure that the FSMC provides the School Corporation with complete and accurate information for all claim submissions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-005 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Department of Education based upon the number of meals served for the month. The Claims were prepared by the Food Service Manager or food service management company (FSMC) employee. INDIANA STATE BOARD OF ACCOUNTS 26 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation maintained manual meal count records. A point-of-sale system (POS) was used for some schools in some months, but it was not consistent. The reports from the POS identified second student meals and staff meals that were included in the amounts claimed for reimbursement. For all three Claims tested, there were differences between the Claims submitted and the School Corporation's detail meal count reports, resulting in over and under reporting and reimbursement. The Claims tested contained the following errors:  The December 2022 claim reported 41 more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed reimbursement totaling $109. Of this total, $59 (22 meals) was due to improperly claiming second student or staff meals.  The March 2023 claim in total reported more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed meals totaling $4,254. Of this total, $4,144 was due to claiming second student or staff meals, totaling $1,035, for breakfast and lunch. The School Corporation also underclaimed snacks by 421, which resulted in under reimbursement of $455. Finally, the claim also contained overcount errors of 136 meals, resulting in overclaimed reimbursement of $565.  The August 2023 claim reported fewer meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in underclaimed meals in net totaling $11,474. The School Corporation did not claim meals served on August 31, 2023, totaling 3,879 meals. This resulted in underclaimed meal reimbursement totaling $13,767. The School Corporation also claimed 141 second student and staff meals, which resulted in overclaimed reimbursement totaling $480. Finally, the claim also contained overcount errors of 497 meals, resulting in overclaimed reimbursement of $1,813. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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 Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." INDIANA STATE BOARD OF ACCOUNTS 27 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not have effective internal control procedures in place over the Claims submitted. The Claims did not contain evidence of an oversight or review process in place to prevent, or detect and correct, errors. The Claims were prepared based upon a summary sheet prepared by the FSMC employee and were not verified back to the source records. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and develop policies and procedures over the preparation and review of claims to ensure appropriate reviews, approval, and oversight are taking place. Additionally, management should develop policies and procedures to ensure that the FSMC provides the School Corporation with complete and accurate information for all claim submissions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-005 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Department of Education based upon the number of meals served for the month. The Claims were prepared by the Food Service Manager or food service management company (FSMC) employee. INDIANA STATE BOARD OF ACCOUNTS 26 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation maintained manual meal count records. A point-of-sale system (POS) was used for some schools in some months, but it was not consistent. The reports from the POS identified second student meals and staff meals that were included in the amounts claimed for reimbursement. For all three Claims tested, there were differences between the Claims submitted and the School Corporation's detail meal count reports, resulting in over and under reporting and reimbursement. The Claims tested contained the following errors:  The December 2022 claim reported 41 more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed reimbursement totaling $109. Of this total, $59 (22 meals) was due to improperly claiming second student or staff meals.  The March 2023 claim in total reported more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed meals totaling $4,254. Of this total, $4,144 was due to claiming second student or staff meals, totaling $1,035, for breakfast and lunch. The School Corporation also underclaimed snacks by 421, which resulted in under reimbursement of $455. Finally, the claim also contained overcount errors of 136 meals, resulting in overclaimed reimbursement of $565.  The August 2023 claim reported fewer meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in underclaimed meals in net totaling $11,474. The School Corporation did not claim meals served on August 31, 2023, totaling 3,879 meals. This resulted in underclaimed meal reimbursement totaling $13,767. The School Corporation also claimed 141 second student and staff meals, which resulted in overclaimed reimbursement totaling $480. Finally, the claim also contained overcount errors of 497 meals, resulting in overclaimed reimbursement of $1,813. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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 Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." INDIANA STATE BOARD OF ACCOUNTS 27 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not have effective internal control procedures in place over the Claims submitted. The Claims did not contain evidence of an oversight or review process in place to prevent, or detect and correct, errors. The Claims were prepared based upon a summary sheet prepared by the FSMC employee and were not verified back to the source records. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and develop policies and procedures over the preparation and review of claims to ensure appropriate reviews, approval, and oversight are taking place. Additionally, management should develop policies and procedures to ensure that the FSMC provides the School Corporation with complete and accurate information for all claim submissions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-005 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Department of Education based upon the number of meals served for the month. The Claims were prepared by the Food Service Manager or food service management company (FSMC) employee. INDIANA STATE BOARD OF ACCOUNTS 26 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation maintained manual meal count records. A point-of-sale system (POS) was used for some schools in some months, but it was not consistent. The reports from the POS identified second student meals and staff meals that were included in the amounts claimed for reimbursement. For all three Claims tested, there were differences between the Claims submitted and the School Corporation's detail meal count reports, resulting in over and under reporting and reimbursement. The Claims tested contained the following errors:  The December 2022 claim reported 41 more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed reimbursement totaling $109. Of this total, $59 (22 meals) was due to improperly claiming second student or staff meals.  The March 2023 claim in total reported more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed meals totaling $4,254. Of this total, $4,144 was due to claiming second student or staff meals, totaling $1,035, for breakfast and lunch. The School Corporation also underclaimed snacks by 421, which resulted in under reimbursement of $455. Finally, the claim also contained overcount errors of 136 meals, resulting in overclaimed reimbursement of $565.  The August 2023 claim reported fewer meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in underclaimed meals in net totaling $11,474. The School Corporation did not claim meals served on August 31, 2023, totaling 3,879 meals. This resulted in underclaimed meal reimbursement totaling $13,767. The School Corporation also claimed 141 second student and staff meals, which resulted in overclaimed reimbursement totaling $480. Finally, the claim also contained overcount errors of 497 meals, resulting in overclaimed reimbursement of $1,813. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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 Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." INDIANA STATE BOARD OF ACCOUNTS 27 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not have effective internal control procedures in place over the Claims submitted. The Claims did not contain evidence of an oversight or review process in place to prevent, or detect and correct, errors. The Claims were prepared based upon a summary sheet prepared by the FSMC employee and were not verified back to the source records. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and develop policies and procedures over the preparation and review of claims to ensure appropriate reviews, approval, and oversight are taking place. Additionally, management should develop policies and procedures to ensure that the FSMC provides the School Corporation with complete and accurate information for all claim submissions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-005 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Department of Education based upon the number of meals served for the month. The Claims were prepared by the Food Service Manager or food service management company (FSMC) employee. INDIANA STATE BOARD OF ACCOUNTS 26 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation maintained manual meal count records. A point-of-sale system (POS) was used for some schools in some months, but it was not consistent. The reports from the POS identified second student meals and staff meals that were included in the amounts claimed for reimbursement. For all three Claims tested, there were differences between the Claims submitted and the School Corporation's detail meal count reports, resulting in over and under reporting and reimbursement. The Claims tested contained the following errors:  The December 2022 claim reported 41 more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed reimbursement totaling $109. Of this total, $59 (22 meals) was due to improperly claiming second student or staff meals.  The March 2023 claim in total reported more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed meals totaling $4,254. Of this total, $4,144 was due to claiming second student or staff meals, totaling $1,035, for breakfast and lunch. The School Corporation also underclaimed snacks by 421, which resulted in under reimbursement of $455. Finally, the claim also contained overcount errors of 136 meals, resulting in overclaimed reimbursement of $565.  The August 2023 claim reported fewer meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in underclaimed meals in net totaling $11,474. The School Corporation did not claim meals served on August 31, 2023, totaling 3,879 meals. This resulted in underclaimed meal reimbursement totaling $13,767. The School Corporation also claimed 141 second student and staff meals, which resulted in overclaimed reimbursement totaling $480. Finally, the claim also contained overcount errors of 497 meals, resulting in overclaimed reimbursement of $1,813. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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 Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." INDIANA STATE BOARD OF ACCOUNTS 27 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not have effective internal control procedures in place over the Claims submitted. The Claims did not contain evidence of an oversight or review process in place to prevent, or detect and correct, errors. The Claims were prepared based upon a summary sheet prepared by the FSMC employee and were not verified back to the source records. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and develop policies and procedures over the preparation and review of claims to ensure appropriate reviews, approval, and oversight are taking place. Additionally, management should develop policies and procedures to ensure that the FSMC provides the School Corporation with complete and accurate information for all claim submissions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-006 Subject: Title I Grants to Local Educational Agencies - Special Tests and Provisions - Annual Report/High School Graduation Rate Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A200014, S010A210014, S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Annual Report Card, High School Graduation Rate Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-006. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions - Annual Report/High School Graduation Rate compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 28 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation must report graduation rate data for all public high schools within the School Corporation using the four-year adjusted cohort rate. To remove a student from the cohort, the School Corporation must confirm the reason for removal in writing. Additionally, required documentation for each removal type must be retained by the School Corporation. For 24 of 25 students tested, only printouts from the student management software were provided to substantiate the removal of the students. Supporting documentation was not maintained to support the removal from the graduation cohort. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 20 USC 7801(23)(B) states: "To remove a student from a cohort, a school or local educational agency shall require documentation, or obtain documentation from the State educational agency, to confirm that the student has transferred out, emigrated to another country, or transferred to a prison or juvenile facility, or is deceased." Cause The School Corporation did not have internal controls to ensure required documentation to support the reason for a student's removal from the high school graduation cohort for mobility reasons was prepared, reviewed, and retained. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and develop policies and procedures over the removal of students from the graduation cohort and that appropriate reviews, approval, and oversight are taking place to ensure compliance. Additionally, management should develop policies and procedures to ensure that appropriate documentation is retained to support the removal of students. INDIANA STATE BOARD OF ACCOUNTS 29 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-006 Subject: Title I Grants to Local Educational Agencies - Special Tests and Provisions - Annual Report/High School Graduation Rate Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A200014, S010A210014, S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Annual Report Card, High School Graduation Rate Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-006. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions - Annual Report/High School Graduation Rate compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 28 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation must report graduation rate data for all public high schools within the School Corporation using the four-year adjusted cohort rate. To remove a student from the cohort, the School Corporation must confirm the reason for removal in writing. Additionally, required documentation for each removal type must be retained by the School Corporation. For 24 of 25 students tested, only printouts from the student management software were provided to substantiate the removal of the students. Supporting documentation was not maintained to support the removal from the graduation cohort. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 20 USC 7801(23)(B) states: "To remove a student from a cohort, a school or local educational agency shall require documentation, or obtain documentation from the State educational agency, to confirm that the student has transferred out, emigrated to another country, or transferred to a prison or juvenile facility, or is deceased." Cause The School Corporation did not have internal controls to ensure required documentation to support the reason for a student's removal from the high school graduation cohort for mobility reasons was prepared, reviewed, and retained. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and develop policies and procedures over the removal of students from the graduation cohort and that appropriate reviews, approval, and oversight are taking place to ensure compliance. Additionally, management should develop policies and procedures to ensure that appropriate documentation is retained to support the removal of students. INDIANA STATE BOARD OF ACCOUNTS 29 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-007 Subject: Title I Grants to Local Educational Agencies - Eligibility Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-008. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Eligibility compliance requirement. Data from the School Corporation's student software system (Real Time data reports) was uploaded to the Indiana Department of Education's (IDOE) Data Exchange System. Enrollment information for the School Corporation was then abstracted by the IDOE from the Data Exchange System and prepopulated into the Title I application for the School Corporation. The poverty counts in the Title I application are prepopulated from the Direct Certifications listings by the IDOE. The School Corporation also downloads the direct certification listings into its student management software to support the poverty counts. The October 1, 2021 and 2022 Real Time (RT) data reports, which were used to prepopulate the School Corporation's enrollment numbers for the 2022-2023 and 2023-2024 Title I applications, were tested for accuracy. Students were selected from the Real Time reports. Their poverty status per the student management software was verified to the Direct Certifications listing from the state provided by the School Corporation. Of the 40 students tested for fiscal years 2022-2023 and 2023-2024, the recorded socioeconomic status of 7 students did not agree to the supporting documentation. The School Corporation's student software listed the 7 students as free or reduced; however, they were not included in the Direct Certification listing provided. The data used for the enrollment and poverty counts was not readily available for audit due to a turnover in staff. Additional procedures and requests had to be made to obtain the information. The lack of internal controls and the noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 30 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 34 CFR 200.78(a)(1) states: "After reserving funds, as applicable, under § 200.77, including funds for equitable services for private school students, their teachers, and their families, an LEA must allocate funds under this subpart to school attendance areas and schools, identified as eligible and selected to participate under section 1113(a) or (b) of the ESEA, in rank order on the basis of the total number of public school children from low-income families in each area or school." Cause The School Corporation had not designed or implemented an oversight or review process to ensure that the enrollment and poverty data prepopulated into the Title I application was accurately reported. Additionally, due to a turnover in personnel, supporting documentation for the social status of the students was not readily available. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and develop policies and procedures over the Title I application enrollment and poverty information and that appropriate reviews, approval, and oversight are taking place to ensure compliance. Additionally, management should develop policies and procedures to ensure that appropriate documentation is retained to support the accuracy of the enrollment and poverty count information in the application. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-007 Subject: Title I Grants to Local Educational Agencies - Eligibility Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-008. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Eligibility compliance requirement. Data from the School Corporation's student software system (Real Time data reports) was uploaded to the Indiana Department of Education's (IDOE) Data Exchange System. Enrollment information for the School Corporation was then abstracted by the IDOE from the Data Exchange System and prepopulated into the Title I application for the School Corporation. The poverty counts in the Title I application are prepopulated from the Direct Certifications listings by the IDOE. The School Corporation also downloads the direct certification listings into its student management software to support the poverty counts. The October 1, 2021 and 2022 Real Time (RT) data reports, which were used to prepopulate the School Corporation's enrollment numbers for the 2022-2023 and 2023-2024 Title I applications, were tested for accuracy. Students were selected from the Real Time reports. Their poverty status per the student management software was verified to the Direct Certifications listing from the state provided by the School Corporation. Of the 40 students tested for fiscal years 2022-2023 and 2023-2024, the recorded socioeconomic status of 7 students did not agree to the supporting documentation. The School Corporation's student software listed the 7 students as free or reduced; however, they were not included in the Direct Certification listing provided. The data used for the enrollment and poverty counts was not readily available for audit due to a turnover in staff. Additional procedures and requests had to be made to obtain the information. The lack of internal controls and the noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 30 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 34 CFR 200.78(a)(1) states: "After reserving funds, as applicable, under § 200.77, including funds for equitable services for private school students, their teachers, and their families, an LEA must allocate funds under this subpart to school attendance areas and schools, identified as eligible and selected to participate under section 1113(a) or (b) of the ESEA, in rank order on the basis of the total number of public school children from low-income families in each area or school." Cause The School Corporation had not designed or implemented an oversight or review process to ensure that the enrollment and poverty data prepopulated into the Title I application was accurately reported. Additionally, due to a turnover in personnel, supporting documentation for the social status of the students was not readily available. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and develop policies and procedures over the Title I application enrollment and poverty information and that appropriate reviews, approval, and oversight are taking place to ensure compliance. Additionally, management should develop policies and procedures to ensure that appropriate documentation is retained to support the accuracy of the enrollment and poverty count information in the application. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-008 Subject: Title I Grants to Local Educational Agencies - Matching, Level of Effort, Earmarking Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A210014, S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Finding: Significant Deficiency Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-005. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with the Matching, Level of Effort, and Earmarking compliance requirement. The financial information submitted by the School Corporation to the Indiana Department of Education through the Form 9 report was used to calculate the School Corporation's Level of Effort - Maintenance of Effort. Management had not developed an oversight or review process to ensure that all payroll expenditure data used to complete the Form 9 report was reported accurately in the correct fund, account, and object code. An internal control process was in place for the payroll expenditures accounted for in grant funds handled by the Title I office, but not for other payroll expenditures of the School Corporation. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause Management had not developed an oversight or review process to ensure that all payroll expenditure data used to complete the Form 9 report was reported accurately in the correct fund, account, and object code. INDIANA STATE BOARD OF ACCOUNTS 32 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to design or implement a system of internal controls places the School Corporation at risk of noncompliance with the grant agreement and the compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls that would ensure that the appropriate reviews, approvals, and oversight are documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-008 Subject: Title I Grants to Local Educational Agencies - Matching, Level of Effort, Earmarking Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A210014, S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Finding: Significant Deficiency Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-005. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with the Matching, Level of Effort, and Earmarking compliance requirement. The financial information submitted by the School Corporation to the Indiana Department of Education through the Form 9 report was used to calculate the School Corporation's Level of Effort - Maintenance of Effort. Management had not developed an oversight or review process to ensure that all payroll expenditure data used to complete the Form 9 report was reported accurately in the correct fund, account, and object code. An internal control process was in place for the payroll expenditures accounted for in grant funds handled by the Title I office, but not for other payroll expenditures of the School Corporation. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause Management had not developed an oversight or review process to ensure that all payroll expenditure data used to complete the Form 9 report was reported accurately in the correct fund, account, and object code. INDIANA STATE BOARD OF ACCOUNTS 32 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to design or implement a system of internal controls places the School Corporation at risk of noncompliance with the grant agreement and the compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls that would ensure that the appropriate reviews, approvals, and oversight are documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-009 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D210013, S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-010. Condition and Context The School Corporation had not properly designed a system of internal controls to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. A property record or capital asset listing is required to be maintained for all equipment, property improvements, and property purchased with the Education Stabilization Fund grant awards to ensure adequate safeguards are in place to prevent loss or damage of items. Equipment to be included in the listing is that which exceeds the School Corporation's capital asset threshold of $5,000. The School Corporation purchased $3,708,207 of equipment and improvements with the Education Stabilization Funds which should have been recorded as capital assets purchased with federal grant funds as these items individually exceeded the capitalization threshold. However, none of the equipment or improvements were detailed in the capital asset listing which also could have documented if the items were properly maintained and safeguarded as required. INDIANA STATE BOARD OF ACCOUNTS 33 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) In addition, in the prior engagement, the School Corporation provided a capital asset listing which included $5,414,399 of assets which were paid from the Education Stabilization Fund. None of these items were detailed on the capital asset listing provided. Furthermore, the capital asset listing provided did not include all required information, which would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Lastly, the School Corporation did not complete a capital asset inventory every two years as required. The lack of internal controls and noncompliance were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition 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 the property 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. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." INDIANA STATE BOARD OF ACCOUNTS 34 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management did not develop a system of internal controls to ensure that all items over the capital asset threshold were added to the listing, the capital asset listing included all required information, items purchased were properly maintained and safeguarded, and that a physical inventory was completed at least every two years as required. The School Corporation implemented a new system for capital assets; however, the only items added to the capital asset listing were below the capital asset threshold. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls that would ensure compliance with the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-009 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D210013, S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-010. Condition and Context The School Corporation had not properly designed a system of internal controls to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. A property record or capital asset listing is required to be maintained for all equipment, property improvements, and property purchased with the Education Stabilization Fund grant awards to ensure adequate safeguards are in place to prevent loss or damage of items. Equipment to be included in the listing is that which exceeds the School Corporation's capital asset threshold of $5,000. The School Corporation purchased $3,708,207 of equipment and improvements with the Education Stabilization Funds which should have been recorded as capital assets purchased with federal grant funds as these items individually exceeded the capitalization threshold. However, none of the equipment or improvements were detailed in the capital asset listing which also could have documented if the items were properly maintained and safeguarded as required. INDIANA STATE BOARD OF ACCOUNTS 33 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) In addition, in the prior engagement, the School Corporation provided a capital asset listing which included $5,414,399 of assets which were paid from the Education Stabilization Fund. None of these items were detailed on the capital asset listing provided. Furthermore, the capital asset listing provided did not include all required information, which would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Lastly, the School Corporation did not complete a capital asset inventory every two years as required. The lack of internal controls and noncompliance were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition 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 the property 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. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." INDIANA STATE BOARD OF ACCOUNTS 34 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management did not develop a system of internal controls to ensure that all items over the capital asset threshold were added to the listing, the capital asset listing included all required information, items purchased were properly maintained and safeguarded, and that a physical inventory was completed at least every two years as required. The School Corporation implemented a new system for capital assets; however, the only items added to the capital asset listing were below the capital asset threshold. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls that would ensure compliance with the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-009 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D210013, S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-010. Condition and Context The School Corporation had not properly designed a system of internal controls to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. A property record or capital asset listing is required to be maintained for all equipment, property improvements, and property purchased with the Education Stabilization Fund grant awards to ensure adequate safeguards are in place to prevent loss or damage of items. Equipment to be included in the listing is that which exceeds the School Corporation's capital asset threshold of $5,000. The School Corporation purchased $3,708,207 of equipment and improvements with the Education Stabilization Funds which should have been recorded as capital assets purchased with federal grant funds as these items individually exceeded the capitalization threshold. However, none of the equipment or improvements were detailed in the capital asset listing which also could have documented if the items were properly maintained and safeguarded as required. INDIANA STATE BOARD OF ACCOUNTS 33 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) In addition, in the prior engagement, the School Corporation provided a capital asset listing which included $5,414,399 of assets which were paid from the Education Stabilization Fund. None of these items were detailed on the capital asset listing provided. Furthermore, the capital asset listing provided did not include all required information, which would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Lastly, the School Corporation did not complete a capital asset inventory every two years as required. The lack of internal controls and noncompliance were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition 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 the property 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. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." INDIANA STATE BOARD OF ACCOUNTS 34 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management did not develop a system of internal controls to ensure that all items over the capital asset threshold were added to the listing, the capital asset listing included all required information, items purchased were properly maintained and safeguarded, and that a physical inventory was completed at least every two years as required. The School Corporation implemented a new system for capital assets; however, the only items added to the capital asset listing were below the capital asset threshold. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls that would ensure compliance with the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-009 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D210013, S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-010. Condition and Context The School Corporation had not properly designed a system of internal controls to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. A property record or capital asset listing is required to be maintained for all equipment, property improvements, and property purchased with the Education Stabilization Fund grant awards to ensure adequate safeguards are in place to prevent loss or damage of items. Equipment to be included in the listing is that which exceeds the School Corporation's capital asset threshold of $5,000. The School Corporation purchased $3,708,207 of equipment and improvements with the Education Stabilization Funds which should have been recorded as capital assets purchased with federal grant funds as these items individually exceeded the capitalization threshold. However, none of the equipment or improvements were detailed in the capital asset listing which also could have documented if the items were properly maintained and safeguarded as required. INDIANA STATE BOARD OF ACCOUNTS 33 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) In addition, in the prior engagement, the School Corporation provided a capital asset listing which included $5,414,399 of assets which were paid from the Education Stabilization Fund. None of these items were detailed on the capital asset listing provided. Furthermore, the capital asset listing provided did not include all required information, which would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Lastly, the School Corporation did not complete a capital asset inventory every two years as required. The lack of internal controls and noncompliance were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition 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 the property 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. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." INDIANA STATE BOARD OF ACCOUNTS 34 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management did not develop a system of internal controls to ensure that all items over the capital asset threshold were added to the listing, the capital asset listing included all required information, items purchased were properly maintained and safeguarded, and that a physical inventory was completed at least every two years as required. The School Corporation implemented a new system for capital assets; however, the only items added to the capital asset listing were below the capital asset threshold. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls that would ensure compliance with the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-009 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D210013, S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-010. Condition and Context The School Corporation had not properly designed a system of internal controls to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. A property record or capital asset listing is required to be maintained for all equipment, property improvements, and property purchased with the Education Stabilization Fund grant awards to ensure adequate safeguards are in place to prevent loss or damage of items. Equipment to be included in the listing is that which exceeds the School Corporation's capital asset threshold of $5,000. The School Corporation purchased $3,708,207 of equipment and improvements with the Education Stabilization Funds which should have been recorded as capital assets purchased with federal grant funds as these items individually exceeded the capitalization threshold. However, none of the equipment or improvements were detailed in the capital asset listing which also could have documented if the items were properly maintained and safeguarded as required. INDIANA STATE BOARD OF ACCOUNTS 33 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) In addition, in the prior engagement, the School Corporation provided a capital asset listing which included $5,414,399 of assets which were paid from the Education Stabilization Fund. None of these items were detailed on the capital asset listing provided. Furthermore, the capital asset listing provided did not include all required information, which would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Lastly, the School Corporation did not complete a capital asset inventory every two years as required. The lack of internal controls and noncompliance were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition 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 the property 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. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." INDIANA STATE BOARD OF ACCOUNTS 34 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management did not develop a system of internal controls to ensure that all items over the capital asset threshold were added to the listing, the capital asset listing included all required information, items purchased were properly maintained and safeguarded, and that a physical inventory was completed at least every two years as required. The School Corporation implemented a new system for capital assets; however, the only items added to the capital asset listing were below the capital asset threshold. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls that would ensure compliance with the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-009 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D210013, S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-010. Condition and Context The School Corporation had not properly designed a system of internal controls to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. A property record or capital asset listing is required to be maintained for all equipment, property improvements, and property purchased with the Education Stabilization Fund grant awards to ensure adequate safeguards are in place to prevent loss or damage of items. Equipment to be included in the listing is that which exceeds the School Corporation's capital asset threshold of $5,000. The School Corporation purchased $3,708,207 of equipment and improvements with the Education Stabilization Funds which should have been recorded as capital assets purchased with federal grant funds as these items individually exceeded the capitalization threshold. However, none of the equipment or improvements were detailed in the capital asset listing which also could have documented if the items were properly maintained and safeguarded as required. INDIANA STATE BOARD OF ACCOUNTS 33 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) In addition, in the prior engagement, the School Corporation provided a capital asset listing which included $5,414,399 of assets which were paid from the Education Stabilization Fund. None of these items were detailed on the capital asset listing provided. Furthermore, the capital asset listing provided did not include all required information, which would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Lastly, the School Corporation did not complete a capital asset inventory every two years as required. The lack of internal controls and noncompliance were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition 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 the property 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. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." INDIANA STATE BOARD OF ACCOUNTS 34 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management did not develop a system of internal controls to ensure that all items over the capital asset threshold were added to the listing, the capital asset listing included all required information, items purchased were properly maintained and safeguarded, and that a physical inventory was completed at least every two years as required. The School Corporation implemented a new system for capital assets; however, the only items added to the capital asset listing were below the capital asset threshold. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls that would ensure compliance with the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context An effective internal control system was not designed or implemented at the School Corporation related to food service management company claims, food service payroll benefit claims, and food service payroll to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and were only for the operation of the food service program. INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Four invoices for payment to the FSMC, which totaled $885,477, were selected for testing. Supporting documentation was presented for only $760,332 of the costs invoiced. Due to the lack of supporting documentation, the Indiana State Board of Accounts was unable to determine if the remaining costs paid, $125,145, were allowable expenditures. The costs that were not properly documented were considered questioned costs. Additionally, in the supporting documentation presented for audit, sales tax was erroneously paid totaling $862. These unallowable costs were considered questioned costs. Payroll In fiscal year 2023-2024, the School Corporation's CTE Coordinator was assigned a new role, Food Service Director/Inventory Coordinator, which included compensation paid out of the Child Nutrition Cluster grant funds. The new role began in May 2024. The Food Service Director did not maintain documentation of time spent on federal program and nonfederal program activities. The total paid to the Food Service Director from the School Lunch fund without proper documentation was $4,358. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: INDIANA STATE BOARD OF ACCOUNTS 23 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls over the invoices paid to the FSMC and payroll paid to the Food Service Director were not properly designed or implemented by management. The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced and did not ensure the Food Service Director maintained a record of actual time spent on child nutrition duties. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $130,365 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context An effective internal control system was not designed or implemented at the School Corporation related to food service management company claims, food service payroll benefit claims, and food service payroll to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and were only for the operation of the food service program. INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Four invoices for payment to the FSMC, which totaled $885,477, were selected for testing. Supporting documentation was presented for only $760,332 of the costs invoiced. Due to the lack of supporting documentation, the Indiana State Board of Accounts was unable to determine if the remaining costs paid, $125,145, were allowable expenditures. The costs that were not properly documented were considered questioned costs. Additionally, in the supporting documentation presented for audit, sales tax was erroneously paid totaling $862. These unallowable costs were considered questioned costs. Payroll In fiscal year 2023-2024, the School Corporation's CTE Coordinator was assigned a new role, Food Service Director/Inventory Coordinator, which included compensation paid out of the Child Nutrition Cluster grant funds. The new role began in May 2024. The Food Service Director did not maintain documentation of time spent on federal program and nonfederal program activities. The total paid to the Food Service Director from the School Lunch fund without proper documentation was $4,358. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: INDIANA STATE BOARD OF ACCOUNTS 23 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls over the invoices paid to the FSMC and payroll paid to the Food Service Director were not properly designed or implemented by management. The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced and did not ensure the Food Service Director maintained a record of actual time spent on child nutrition duties. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $130,365 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context An effective internal control system was not designed or implemented at the School Corporation related to food service management company claims, food service payroll benefit claims, and food service payroll to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and were only for the operation of the food service program. INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Four invoices for payment to the FSMC, which totaled $885,477, were selected for testing. Supporting documentation was presented for only $760,332 of the costs invoiced. Due to the lack of supporting documentation, the Indiana State Board of Accounts was unable to determine if the remaining costs paid, $125,145, were allowable expenditures. The costs that were not properly documented were considered questioned costs. Additionally, in the supporting documentation presented for audit, sales tax was erroneously paid totaling $862. These unallowable costs were considered questioned costs. Payroll In fiscal year 2023-2024, the School Corporation's CTE Coordinator was assigned a new role, Food Service Director/Inventory Coordinator, which included compensation paid out of the Child Nutrition Cluster grant funds. The new role began in May 2024. The Food Service Director did not maintain documentation of time spent on federal program and nonfederal program activities. The total paid to the Food Service Director from the School Lunch fund without proper documentation was $4,358. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: INDIANA STATE BOARD OF ACCOUNTS 23 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls over the invoices paid to the FSMC and payroll paid to the Food Service Director were not properly designed or implemented by management. The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced and did not ensure the Food Service Director maintained a record of actual time spent on child nutrition duties. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $130,365 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context An effective internal control system was not designed or implemented at the School Corporation related to food service management company claims, food service payroll benefit claims, and food service payroll to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and were only for the operation of the food service program. INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Four invoices for payment to the FSMC, which totaled $885,477, were selected for testing. Supporting documentation was presented for only $760,332 of the costs invoiced. Due to the lack of supporting documentation, the Indiana State Board of Accounts was unable to determine if the remaining costs paid, $125,145, were allowable expenditures. The costs that were not properly documented were considered questioned costs. Additionally, in the supporting documentation presented for audit, sales tax was erroneously paid totaling $862. These unallowable costs were considered questioned costs. Payroll In fiscal year 2023-2024, the School Corporation's CTE Coordinator was assigned a new role, Food Service Director/Inventory Coordinator, which included compensation paid out of the Child Nutrition Cluster grant funds. The new role began in May 2024. The Food Service Director did not maintain documentation of time spent on federal program and nonfederal program activities. The total paid to the Food Service Director from the School Lunch fund without proper documentation was $4,358. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: INDIANA STATE BOARD OF ACCOUNTS 23 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls over the invoices paid to the FSMC and payroll paid to the Food Service Director were not properly designed or implemented by management. The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced and did not ensure the Food Service Director maintained a record of actual time spent on child nutrition duties. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $130,365 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context An effective internal control system was not designed or implemented at the School Corporation related to food service management company claims, food service payroll benefit claims, and food service payroll to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and were only for the operation of the food service program. INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Four invoices for payment to the FSMC, which totaled $885,477, were selected for testing. Supporting documentation was presented for only $760,332 of the costs invoiced. Due to the lack of supporting documentation, the Indiana State Board of Accounts was unable to determine if the remaining costs paid, $125,145, were allowable expenditures. The costs that were not properly documented were considered questioned costs. Additionally, in the supporting documentation presented for audit, sales tax was erroneously paid totaling $862. These unallowable costs were considered questioned costs. Payroll In fiscal year 2023-2024, the School Corporation's CTE Coordinator was assigned a new role, Food Service Director/Inventory Coordinator, which included compensation paid out of the Child Nutrition Cluster grant funds. The new role began in May 2024. The Food Service Director did not maintain documentation of time spent on federal program and nonfederal program activities. The total paid to the Food Service Director from the School Lunch fund without proper documentation was $4,358. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: INDIANA STATE BOARD OF ACCOUNTS 23 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls over the invoices paid to the FSMC and payroll paid to the Food Service Director were not properly designed or implemented by management. The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced and did not ensure the Food Service Director maintained a record of actual time spent on child nutrition duties. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $130,365 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context An effective internal control system was not designed or implemented at the School Corporation related to food service management company claims, food service payroll benefit claims, and food service payroll to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and were only for the operation of the food service program. INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Four invoices for payment to the FSMC, which totaled $885,477, were selected for testing. Supporting documentation was presented for only $760,332 of the costs invoiced. Due to the lack of supporting documentation, the Indiana State Board of Accounts was unable to determine if the remaining costs paid, $125,145, were allowable expenditures. The costs that were not properly documented were considered questioned costs. Additionally, in the supporting documentation presented for audit, sales tax was erroneously paid totaling $862. These unallowable costs were considered questioned costs. Payroll In fiscal year 2023-2024, the School Corporation's CTE Coordinator was assigned a new role, Food Service Director/Inventory Coordinator, which included compensation paid out of the Child Nutrition Cluster grant funds. The new role began in May 2024. The Food Service Director did not maintain documentation of time spent on federal program and nonfederal program activities. The total paid to the Food Service Director from the School Lunch fund without proper documentation was $4,358. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: INDIANA STATE BOARD OF ACCOUNTS 23 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls over the invoices paid to the FSMC and payroll paid to the Food Service Director were not properly designed or implemented by management. The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced and did not ensure the Food Service Director maintained a record of actual time spent on child nutrition duties. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $130,365 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 24 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-004. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation contracted with a food service management company (FSMC) for the operation of the food service program. The School Corporation did not have policies or procedures to ensure compliance with procurement requirements to verify that the invoices submitted to the School Corporation were those actually paid by the FSMC or to ensure that the FSMC invoices included credits for any discounts, rebates, or other credits. The School Corporation did not request, nor did the FSMC provide, sufficient documentation to verify that the invoices received by the School Corporation encompassed the same invoices that were paid by the FSMC and that the products charged were received. The School Corporation also did not verify the return of discounts, rebates, or credits from the FSMC. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (iv) The contractor must identify the amount of each discount, rebate and other applicable credit on bills and invoices presented to the school food authority for payment and individually identify the amount as a discount, rebate, or in the case of other applicable credits, the nature of the credit. If approved by the State agency, the school food authority may permit the contractor to report this information on a less frequent basis than monthly, but no less frequently than annually; (v) The contractor must identify the method by which it will report discounts, rebates and other applicable credits allocable to the contract that are not reported prior to conclusion of the contract; and (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." INDIANA STATE BOARD OF ACCOUNTS 25 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced or verify any credits or discounts received or review the invoices that were provided. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls to ensure compliance with the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 24 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-004. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation contracted with a food service management company (FSMC) for the operation of the food service program. The School Corporation did not have policies or procedures to ensure compliance with procurement requirements to verify that the invoices submitted to the School Corporation were those actually paid by the FSMC or to ensure that the FSMC invoices included credits for any discounts, rebates, or other credits. The School Corporation did not request, nor did the FSMC provide, sufficient documentation to verify that the invoices received by the School Corporation encompassed the same invoices that were paid by the FSMC and that the products charged were received. The School Corporation also did not verify the return of discounts, rebates, or credits from the FSMC. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (iv) The contractor must identify the amount of each discount, rebate and other applicable credit on bills and invoices presented to the school food authority for payment and individually identify the amount as a discount, rebate, or in the case of other applicable credits, the nature of the credit. If approved by the State agency, the school food authority may permit the contractor to report this information on a less frequent basis than monthly, but no less frequently than annually; (v) The contractor must identify the method by which it will report discounts, rebates and other applicable credits allocable to the contract that are not reported prior to conclusion of the contract; and (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." INDIANA STATE BOARD OF ACCOUNTS 25 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced or verify any credits or discounts received or review the invoices that were provided. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls to ensure compliance with the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 24 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-004. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation contracted with a food service management company (FSMC) for the operation of the food service program. The School Corporation did not have policies or procedures to ensure compliance with procurement requirements to verify that the invoices submitted to the School Corporation were those actually paid by the FSMC or to ensure that the FSMC invoices included credits for any discounts, rebates, or other credits. The School Corporation did not request, nor did the FSMC provide, sufficient documentation to verify that the invoices received by the School Corporation encompassed the same invoices that were paid by the FSMC and that the products charged were received. The School Corporation also did not verify the return of discounts, rebates, or credits from the FSMC. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (iv) The contractor must identify the amount of each discount, rebate and other applicable credit on bills and invoices presented to the school food authority for payment and individually identify the amount as a discount, rebate, or in the case of other applicable credits, the nature of the credit. If approved by the State agency, the school food authority may permit the contractor to report this information on a less frequent basis than monthly, but no less frequently than annually; (v) The contractor must identify the method by which it will report discounts, rebates and other applicable credits allocable to the contract that are not reported prior to conclusion of the contract; and (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." INDIANA STATE BOARD OF ACCOUNTS 25 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced or verify any credits or discounts received or review the invoices that were provided. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls to ensure compliance with the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 24 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-004. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation contracted with a food service management company (FSMC) for the operation of the food service program. The School Corporation did not have policies or procedures to ensure compliance with procurement requirements to verify that the invoices submitted to the School Corporation were those actually paid by the FSMC or to ensure that the FSMC invoices included credits for any discounts, rebates, or other credits. The School Corporation did not request, nor did the FSMC provide, sufficient documentation to verify that the invoices received by the School Corporation encompassed the same invoices that were paid by the FSMC and that the products charged were received. The School Corporation also did not verify the return of discounts, rebates, or credits from the FSMC. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (iv) The contractor must identify the amount of each discount, rebate and other applicable credit on bills and invoices presented to the school food authority for payment and individually identify the amount as a discount, rebate, or in the case of other applicable credits, the nature of the credit. If approved by the State agency, the school food authority may permit the contractor to report this information on a less frequent basis than monthly, but no less frequently than annually; (v) The contractor must identify the method by which it will report discounts, rebates and other applicable credits allocable to the contract that are not reported prior to conclusion of the contract; and (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." INDIANA STATE BOARD OF ACCOUNTS 25 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced or verify any credits or discounts received or review the invoices that were provided. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls to ensure compliance with the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 24 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-004. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation contracted with a food service management company (FSMC) for the operation of the food service program. The School Corporation did not have policies or procedures to ensure compliance with procurement requirements to verify that the invoices submitted to the School Corporation were those actually paid by the FSMC or to ensure that the FSMC invoices included credits for any discounts, rebates, or other credits. The School Corporation did not request, nor did the FSMC provide, sufficient documentation to verify that the invoices received by the School Corporation encompassed the same invoices that were paid by the FSMC and that the products charged were received. The School Corporation also did not verify the return of discounts, rebates, or credits from the FSMC. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (iv) The contractor must identify the amount of each discount, rebate and other applicable credit on bills and invoices presented to the school food authority for payment and individually identify the amount as a discount, rebate, or in the case of other applicable credits, the nature of the credit. If approved by the State agency, the school food authority may permit the contractor to report this information on a less frequent basis than monthly, but no less frequently than annually; (v) The contractor must identify the method by which it will report discounts, rebates and other applicable credits allocable to the contract that are not reported prior to conclusion of the contract; and (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." INDIANA STATE BOARD OF ACCOUNTS 25 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced or verify any credits or discounts received or review the invoices that were provided. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls to ensure compliance with the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 24 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-004. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation contracted with a food service management company (FSMC) for the operation of the food service program. The School Corporation did not have policies or procedures to ensure compliance with procurement requirements to verify that the invoices submitted to the School Corporation were those actually paid by the FSMC or to ensure that the FSMC invoices included credits for any discounts, rebates, or other credits. The School Corporation did not request, nor did the FSMC provide, sufficient documentation to verify that the invoices received by the School Corporation encompassed the same invoices that were paid by the FSMC and that the products charged were received. The School Corporation also did not verify the return of discounts, rebates, or credits from the FSMC. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (iv) The contractor must identify the amount of each discount, rebate and other applicable credit on bills and invoices presented to the school food authority for payment and individually identify the amount as a discount, rebate, or in the case of other applicable credits, the nature of the credit. If approved by the State agency, the school food authority may permit the contractor to report this information on a less frequent basis than monthly, but no less frequently than annually; (v) The contractor must identify the method by which it will report discounts, rebates and other applicable credits allocable to the contract that are not reported prior to conclusion of the contract; and (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." INDIANA STATE BOARD OF ACCOUNTS 25 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced or verify any credits or discounts received or review the invoices that were provided. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls to ensure compliance with the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-005 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Department of Education based upon the number of meals served for the month. The Claims were prepared by the Food Service Manager or food service management company (FSMC) employee. INDIANA STATE BOARD OF ACCOUNTS 26 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation maintained manual meal count records. A point-of-sale system (POS) was used for some schools in some months, but it was not consistent. The reports from the POS identified second student meals and staff meals that were included in the amounts claimed for reimbursement. For all three Claims tested, there were differences between the Claims submitted and the School Corporation's detail meal count reports, resulting in over and under reporting and reimbursement. The Claims tested contained the following errors:  The December 2022 claim reported 41 more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed reimbursement totaling $109. Of this total, $59 (22 meals) was due to improperly claiming second student or staff meals.  The March 2023 claim in total reported more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed meals totaling $4,254. Of this total, $4,144 was due to claiming second student or staff meals, totaling $1,035, for breakfast and lunch. The School Corporation also underclaimed snacks by 421, which resulted in under reimbursement of $455. Finally, the claim also contained overcount errors of 136 meals, resulting in overclaimed reimbursement of $565.  The August 2023 claim reported fewer meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in underclaimed meals in net totaling $11,474. The School Corporation did not claim meals served on August 31, 2023, totaling 3,879 meals. This resulted in underclaimed meal reimbursement totaling $13,767. The School Corporation also claimed 141 second student and staff meals, which resulted in overclaimed reimbursement totaling $480. Finally, the claim also contained overcount errors of 497 meals, resulting in overclaimed reimbursement of $1,813. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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 Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." INDIANA STATE BOARD OF ACCOUNTS 27 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not have effective internal control procedures in place over the Claims submitted. The Claims did not contain evidence of an oversight or review process in place to prevent, or detect and correct, errors. The Claims were prepared based upon a summary sheet prepared by the FSMC employee and were not verified back to the source records. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and develop policies and procedures over the preparation and review of claims to ensure appropriate reviews, approval, and oversight are taking place. Additionally, management should develop policies and procedures to ensure that the FSMC provides the School Corporation with complete and accurate information for all claim submissions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-005 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Department of Education based upon the number of meals served for the month. The Claims were prepared by the Food Service Manager or food service management company (FSMC) employee. INDIANA STATE BOARD OF ACCOUNTS 26 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation maintained manual meal count records. A point-of-sale system (POS) was used for some schools in some months, but it was not consistent. The reports from the POS identified second student meals and staff meals that were included in the amounts claimed for reimbursement. For all three Claims tested, there were differences between the Claims submitted and the School Corporation's detail meal count reports, resulting in over and under reporting and reimbursement. The Claims tested contained the following errors:  The December 2022 claim reported 41 more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed reimbursement totaling $109. Of this total, $59 (22 meals) was due to improperly claiming second student or staff meals.  The March 2023 claim in total reported more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed meals totaling $4,254. Of this total, $4,144 was due to claiming second student or staff meals, totaling $1,035, for breakfast and lunch. The School Corporation also underclaimed snacks by 421, which resulted in under reimbursement of $455. Finally, the claim also contained overcount errors of 136 meals, resulting in overclaimed reimbursement of $565.  The August 2023 claim reported fewer meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in underclaimed meals in net totaling $11,474. The School Corporation did not claim meals served on August 31, 2023, totaling 3,879 meals. This resulted in underclaimed meal reimbursement totaling $13,767. The School Corporation also claimed 141 second student and staff meals, which resulted in overclaimed reimbursement totaling $480. Finally, the claim also contained overcount errors of 497 meals, resulting in overclaimed reimbursement of $1,813. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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 Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." INDIANA STATE BOARD OF ACCOUNTS 27 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not have effective internal control procedures in place over the Claims submitted. The Claims did not contain evidence of an oversight or review process in place to prevent, or detect and correct, errors. The Claims were prepared based upon a summary sheet prepared by the FSMC employee and were not verified back to the source records. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and develop policies and procedures over the preparation and review of claims to ensure appropriate reviews, approval, and oversight are taking place. Additionally, management should develop policies and procedures to ensure that the FSMC provides the School Corporation with complete and accurate information for all claim submissions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-005 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Department of Education based upon the number of meals served for the month. The Claims were prepared by the Food Service Manager or food service management company (FSMC) employee. INDIANA STATE BOARD OF ACCOUNTS 26 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation maintained manual meal count records. A point-of-sale system (POS) was used for some schools in some months, but it was not consistent. The reports from the POS identified second student meals and staff meals that were included in the amounts claimed for reimbursement. For all three Claims tested, there were differences between the Claims submitted and the School Corporation's detail meal count reports, resulting in over and under reporting and reimbursement. The Claims tested contained the following errors:  The December 2022 claim reported 41 more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed reimbursement totaling $109. Of this total, $59 (22 meals) was due to improperly claiming second student or staff meals.  The March 2023 claim in total reported more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed meals totaling $4,254. Of this total, $4,144 was due to claiming second student or staff meals, totaling $1,035, for breakfast and lunch. The School Corporation also underclaimed snacks by 421, which resulted in under reimbursement of $455. Finally, the claim also contained overcount errors of 136 meals, resulting in overclaimed reimbursement of $565.  The August 2023 claim reported fewer meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in underclaimed meals in net totaling $11,474. The School Corporation did not claim meals served on August 31, 2023, totaling 3,879 meals. This resulted in underclaimed meal reimbursement totaling $13,767. The School Corporation also claimed 141 second student and staff meals, which resulted in overclaimed reimbursement totaling $480. Finally, the claim also contained overcount errors of 497 meals, resulting in overclaimed reimbursement of $1,813. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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 Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." INDIANA STATE BOARD OF ACCOUNTS 27 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not have effective internal control procedures in place over the Claims submitted. The Claims did not contain evidence of an oversight or review process in place to prevent, or detect and correct, errors. The Claims were prepared based upon a summary sheet prepared by the FSMC employee and were not verified back to the source records. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and develop policies and procedures over the preparation and review of claims to ensure appropriate reviews, approval, and oversight are taking place. Additionally, management should develop policies and procedures to ensure that the FSMC provides the School Corporation with complete and accurate information for all claim submissions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-005 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Department of Education based upon the number of meals served for the month. The Claims were prepared by the Food Service Manager or food service management company (FSMC) employee. INDIANA STATE BOARD OF ACCOUNTS 26 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation maintained manual meal count records. A point-of-sale system (POS) was used for some schools in some months, but it was not consistent. The reports from the POS identified second student meals and staff meals that were included in the amounts claimed for reimbursement. For all three Claims tested, there were differences between the Claims submitted and the School Corporation's detail meal count reports, resulting in over and under reporting and reimbursement. The Claims tested contained the following errors:  The December 2022 claim reported 41 more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed reimbursement totaling $109. Of this total, $59 (22 meals) was due to improperly claiming second student or staff meals.  The March 2023 claim in total reported more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed meals totaling $4,254. Of this total, $4,144 was due to claiming second student or staff meals, totaling $1,035, for breakfast and lunch. The School Corporation also underclaimed snacks by 421, which resulted in under reimbursement of $455. Finally, the claim also contained overcount errors of 136 meals, resulting in overclaimed reimbursement of $565.  The August 2023 claim reported fewer meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in underclaimed meals in net totaling $11,474. The School Corporation did not claim meals served on August 31, 2023, totaling 3,879 meals. This resulted in underclaimed meal reimbursement totaling $13,767. The School Corporation also claimed 141 second student and staff meals, which resulted in overclaimed reimbursement totaling $480. Finally, the claim also contained overcount errors of 497 meals, resulting in overclaimed reimbursement of $1,813. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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 Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." INDIANA STATE BOARD OF ACCOUNTS 27 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not have effective internal control procedures in place over the Claims submitted. The Claims did not contain evidence of an oversight or review process in place to prevent, or detect and correct, errors. The Claims were prepared based upon a summary sheet prepared by the FSMC employee and were not verified back to the source records. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and develop policies and procedures over the preparation and review of claims to ensure appropriate reviews, approval, and oversight are taking place. Additionally, management should develop policies and procedures to ensure that the FSMC provides the School Corporation with complete and accurate information for all claim submissions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-005 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Department of Education based upon the number of meals served for the month. The Claims were prepared by the Food Service Manager or food service management company (FSMC) employee. INDIANA STATE BOARD OF ACCOUNTS 26 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation maintained manual meal count records. A point-of-sale system (POS) was used for some schools in some months, but it was not consistent. The reports from the POS identified second student meals and staff meals that were included in the amounts claimed for reimbursement. For all three Claims tested, there were differences between the Claims submitted and the School Corporation's detail meal count reports, resulting in over and under reporting and reimbursement. The Claims tested contained the following errors:  The December 2022 claim reported 41 more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed reimbursement totaling $109. Of this total, $59 (22 meals) was due to improperly claiming second student or staff meals.  The March 2023 claim in total reported more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed meals totaling $4,254. Of this total, $4,144 was due to claiming second student or staff meals, totaling $1,035, for breakfast and lunch. The School Corporation also underclaimed snacks by 421, which resulted in under reimbursement of $455. Finally, the claim also contained overcount errors of 136 meals, resulting in overclaimed reimbursement of $565.  The August 2023 claim reported fewer meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in underclaimed meals in net totaling $11,474. The School Corporation did not claim meals served on August 31, 2023, totaling 3,879 meals. This resulted in underclaimed meal reimbursement totaling $13,767. The School Corporation also claimed 141 second student and staff meals, which resulted in overclaimed reimbursement totaling $480. Finally, the claim also contained overcount errors of 497 meals, resulting in overclaimed reimbursement of $1,813. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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 Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." INDIANA STATE BOARD OF ACCOUNTS 27 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not have effective internal control procedures in place over the Claims submitted. The Claims did not contain evidence of an oversight or review process in place to prevent, or detect and correct, errors. The Claims were prepared based upon a summary sheet prepared by the FSMC employee and were not verified back to the source records. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and develop policies and procedures over the preparation and review of claims to ensure appropriate reviews, approval, and oversight are taking place. Additionally, management should develop policies and procedures to ensure that the FSMC provides the School Corporation with complete and accurate information for all claim submissions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-005 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Department of Education based upon the number of meals served for the month. The Claims were prepared by the Food Service Manager or food service management company (FSMC) employee. INDIANA STATE BOARD OF ACCOUNTS 26 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation maintained manual meal count records. A point-of-sale system (POS) was used for some schools in some months, but it was not consistent. The reports from the POS identified second student meals and staff meals that were included in the amounts claimed for reimbursement. For all three Claims tested, there were differences between the Claims submitted and the School Corporation's detail meal count reports, resulting in over and under reporting and reimbursement. The Claims tested contained the following errors:  The December 2022 claim reported 41 more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed reimbursement totaling $109. Of this total, $59 (22 meals) was due to improperly claiming second student or staff meals.  The March 2023 claim in total reported more meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in overclaimed meals totaling $4,254. Of this total, $4,144 was due to claiming second student or staff meals, totaling $1,035, for breakfast and lunch. The School Corporation also underclaimed snacks by 421, which resulted in under reimbursement of $455. Finally, the claim also contained overcount errors of 136 meals, resulting in overclaimed reimbursement of $565.  The August 2023 claim reported fewer meals served than the eligible meals per the School Corporation's detail meal count reports, which resulted in underclaimed meals in net totaling $11,474. The School Corporation did not claim meals served on August 31, 2023, totaling 3,879 meals. This resulted in underclaimed meal reimbursement totaling $13,767. The School Corporation also claimed 141 second student and staff meals, which resulted in overclaimed reimbursement totaling $480. Finally, the claim also contained overcount errors of 497 meals, resulting in overclaimed reimbursement of $1,813. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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 Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." INDIANA STATE BOARD OF ACCOUNTS 27 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not have effective internal control procedures in place over the Claims submitted. The Claims did not contain evidence of an oversight or review process in place to prevent, or detect and correct, errors. The Claims were prepared based upon a summary sheet prepared by the FSMC employee and were not verified back to the source records. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and develop policies and procedures over the preparation and review of claims to ensure appropriate reviews, approval, and oversight are taking place. Additionally, management should develop policies and procedures to ensure that the FSMC provides the School Corporation with complete and accurate information for all claim submissions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-006 Subject: Title I Grants to Local Educational Agencies - Special Tests and Provisions - Annual Report/High School Graduation Rate Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A200014, S010A210014, S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Annual Report Card, High School Graduation Rate Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-006. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions - Annual Report/High School Graduation Rate compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 28 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation must report graduation rate data for all public high schools within the School Corporation using the four-year adjusted cohort rate. To remove a student from the cohort, the School Corporation must confirm the reason for removal in writing. Additionally, required documentation for each removal type must be retained by the School Corporation. For 24 of 25 students tested, only printouts from the student management software were provided to substantiate the removal of the students. Supporting documentation was not maintained to support the removal from the graduation cohort. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 20 USC 7801(23)(B) states: "To remove a student from a cohort, a school or local educational agency shall require documentation, or obtain documentation from the State educational agency, to confirm that the student has transferred out, emigrated to another country, or transferred to a prison or juvenile facility, or is deceased." Cause The School Corporation did not have internal controls to ensure required documentation to support the reason for a student's removal from the high school graduation cohort for mobility reasons was prepared, reviewed, and retained. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and develop policies and procedures over the removal of students from the graduation cohort and that appropriate reviews, approval, and oversight are taking place to ensure compliance. Additionally, management should develop policies and procedures to ensure that appropriate documentation is retained to support the removal of students. INDIANA STATE BOARD OF ACCOUNTS 29 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-006 Subject: Title I Grants to Local Educational Agencies - Special Tests and Provisions - Annual Report/High School Graduation Rate Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A200014, S010A210014, S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Annual Report Card, High School Graduation Rate Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-006. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions - Annual Report/High School Graduation Rate compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 28 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation must report graduation rate data for all public high schools within the School Corporation using the four-year adjusted cohort rate. To remove a student from the cohort, the School Corporation must confirm the reason for removal in writing. Additionally, required documentation for each removal type must be retained by the School Corporation. For 24 of 25 students tested, only printouts from the student management software were provided to substantiate the removal of the students. Supporting documentation was not maintained to support the removal from the graduation cohort. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 20 USC 7801(23)(B) states: "To remove a student from a cohort, a school or local educational agency shall require documentation, or obtain documentation from the State educational agency, to confirm that the student has transferred out, emigrated to another country, or transferred to a prison or juvenile facility, or is deceased." Cause The School Corporation did not have internal controls to ensure required documentation to support the reason for a student's removal from the high school graduation cohort for mobility reasons was prepared, reviewed, and retained. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and develop policies and procedures over the removal of students from the graduation cohort and that appropriate reviews, approval, and oversight are taking place to ensure compliance. Additionally, management should develop policies and procedures to ensure that appropriate documentation is retained to support the removal of students. INDIANA STATE BOARD OF ACCOUNTS 29 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-007 Subject: Title I Grants to Local Educational Agencies - Eligibility Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-008. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Eligibility compliance requirement. Data from the School Corporation's student software system (Real Time data reports) was uploaded to the Indiana Department of Education's (IDOE) Data Exchange System. Enrollment information for the School Corporation was then abstracted by the IDOE from the Data Exchange System and prepopulated into the Title I application for the School Corporation. The poverty counts in the Title I application are prepopulated from the Direct Certifications listings by the IDOE. The School Corporation also downloads the direct certification listings into its student management software to support the poverty counts. The October 1, 2021 and 2022 Real Time (RT) data reports, which were used to prepopulate the School Corporation's enrollment numbers for the 2022-2023 and 2023-2024 Title I applications, were tested for accuracy. Students were selected from the Real Time reports. Their poverty status per the student management software was verified to the Direct Certifications listing from the state provided by the School Corporation. Of the 40 students tested for fiscal years 2022-2023 and 2023-2024, the recorded socioeconomic status of 7 students did not agree to the supporting documentation. The School Corporation's student software listed the 7 students as free or reduced; however, they were not included in the Direct Certification listing provided. The data used for the enrollment and poverty counts was not readily available for audit due to a turnover in staff. Additional procedures and requests had to be made to obtain the information. The lack of internal controls and the noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 30 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 34 CFR 200.78(a)(1) states: "After reserving funds, as applicable, under § 200.77, including funds for equitable services for private school students, their teachers, and their families, an LEA must allocate funds under this subpart to school attendance areas and schools, identified as eligible and selected to participate under section 1113(a) or (b) of the ESEA, in rank order on the basis of the total number of public school children from low-income families in each area or school." Cause The School Corporation had not designed or implemented an oversight or review process to ensure that the enrollment and poverty data prepopulated into the Title I application was accurately reported. Additionally, due to a turnover in personnel, supporting documentation for the social status of the students was not readily available. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and develop policies and procedures over the Title I application enrollment and poverty information and that appropriate reviews, approval, and oversight are taking place to ensure compliance. Additionally, management should develop policies and procedures to ensure that appropriate documentation is retained to support the accuracy of the enrollment and poverty count information in the application. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-007 Subject: Title I Grants to Local Educational Agencies - Eligibility Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-008. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Eligibility compliance requirement. Data from the School Corporation's student software system (Real Time data reports) was uploaded to the Indiana Department of Education's (IDOE) Data Exchange System. Enrollment information for the School Corporation was then abstracted by the IDOE from the Data Exchange System and prepopulated into the Title I application for the School Corporation. The poverty counts in the Title I application are prepopulated from the Direct Certifications listings by the IDOE. The School Corporation also downloads the direct certification listings into its student management software to support the poverty counts. The October 1, 2021 and 2022 Real Time (RT) data reports, which were used to prepopulate the School Corporation's enrollment numbers for the 2022-2023 and 2023-2024 Title I applications, were tested for accuracy. Students were selected from the Real Time reports. Their poverty status per the student management software was verified to the Direct Certifications listing from the state provided by the School Corporation. Of the 40 students tested for fiscal years 2022-2023 and 2023-2024, the recorded socioeconomic status of 7 students did not agree to the supporting documentation. The School Corporation's student software listed the 7 students as free or reduced; however, they were not included in the Direct Certification listing provided. The data used for the enrollment and poverty counts was not readily available for audit due to a turnover in staff. Additional procedures and requests had to be made to obtain the information. The lack of internal controls and the noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 30 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 34 CFR 200.78(a)(1) states: "After reserving funds, as applicable, under § 200.77, including funds for equitable services for private school students, their teachers, and their families, an LEA must allocate funds under this subpart to school attendance areas and schools, identified as eligible and selected to participate under section 1113(a) or (b) of the ESEA, in rank order on the basis of the total number of public school children from low-income families in each area or school." Cause The School Corporation had not designed or implemented an oversight or review process to ensure that the enrollment and poverty data prepopulated into the Title I application was accurately reported. Additionally, due to a turnover in personnel, supporting documentation for the social status of the students was not readily available. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and develop policies and procedures over the Title I application enrollment and poverty information and that appropriate reviews, approval, and oversight are taking place to ensure compliance. Additionally, management should develop policies and procedures to ensure that appropriate documentation is retained to support the accuracy of the enrollment and poverty count information in the application. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-008 Subject: Title I Grants to Local Educational Agencies - Matching, Level of Effort, Earmarking Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A210014, S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Finding: Significant Deficiency Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-005. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with the Matching, Level of Effort, and Earmarking compliance requirement. The financial information submitted by the School Corporation to the Indiana Department of Education through the Form 9 report was used to calculate the School Corporation's Level of Effort - Maintenance of Effort. Management had not developed an oversight or review process to ensure that all payroll expenditure data used to complete the Form 9 report was reported accurately in the correct fund, account, and object code. An internal control process was in place for the payroll expenditures accounted for in grant funds handled by the Title I office, but not for other payroll expenditures of the School Corporation. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause Management had not developed an oversight or review process to ensure that all payroll expenditure data used to complete the Form 9 report was reported accurately in the correct fund, account, and object code. INDIANA STATE BOARD OF ACCOUNTS 32 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to design or implement a system of internal controls places the School Corporation at risk of noncompliance with the grant agreement and the compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls that would ensure that the appropriate reviews, approvals, and oversight are documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-008 Subject: Title I Grants to Local Educational Agencies - Matching, Level of Effort, Earmarking Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A210014, S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Finding: Significant Deficiency Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-005. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with the Matching, Level of Effort, and Earmarking compliance requirement. The financial information submitted by the School Corporation to the Indiana Department of Education through the Form 9 report was used to calculate the School Corporation's Level of Effort - Maintenance of Effort. Management had not developed an oversight or review process to ensure that all payroll expenditure data used to complete the Form 9 report was reported accurately in the correct fund, account, and object code. An internal control process was in place for the payroll expenditures accounted for in grant funds handled by the Title I office, but not for other payroll expenditures of the School Corporation. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause Management had not developed an oversight or review process to ensure that all payroll expenditure data used to complete the Form 9 report was reported accurately in the correct fund, account, and object code. INDIANA STATE BOARD OF ACCOUNTS 32 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to design or implement a system of internal controls places the School Corporation at risk of noncompliance with the grant agreement and the compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls that would ensure that the appropriate reviews, approvals, and oversight are documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-009 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D210013, S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-010. Condition and Context The School Corporation had not properly designed a system of internal controls to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. A property record or capital asset listing is required to be maintained for all equipment, property improvements, and property purchased with the Education Stabilization Fund grant awards to ensure adequate safeguards are in place to prevent loss or damage of items. Equipment to be included in the listing is that which exceeds the School Corporation's capital asset threshold of $5,000. The School Corporation purchased $3,708,207 of equipment and improvements with the Education Stabilization Funds which should have been recorded as capital assets purchased with federal grant funds as these items individually exceeded the capitalization threshold. However, none of the equipment or improvements were detailed in the capital asset listing which also could have documented if the items were properly maintained and safeguarded as required. INDIANA STATE BOARD OF ACCOUNTS 33 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) In addition, in the prior engagement, the School Corporation provided a capital asset listing which included $5,414,399 of assets which were paid from the Education Stabilization Fund. None of these items were detailed on the capital asset listing provided. Furthermore, the capital asset listing provided did not include all required information, which would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Lastly, the School Corporation did not complete a capital asset inventory every two years as required. The lack of internal controls and noncompliance were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition 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 the property 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. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." INDIANA STATE BOARD OF ACCOUNTS 34 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management did not develop a system of internal controls to ensure that all items over the capital asset threshold were added to the listing, the capital asset listing included all required information, items purchased were properly maintained and safeguarded, and that a physical inventory was completed at least every two years as required. The School Corporation implemented a new system for capital assets; however, the only items added to the capital asset listing were below the capital asset threshold. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls that would ensure compliance with the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-009 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D210013, S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-010. Condition and Context The School Corporation had not properly designed a system of internal controls to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. A property record or capital asset listing is required to be maintained for all equipment, property improvements, and property purchased with the Education Stabilization Fund grant awards to ensure adequate safeguards are in place to prevent loss or damage of items. Equipment to be included in the listing is that which exceeds the School Corporation's capital asset threshold of $5,000. The School Corporation purchased $3,708,207 of equipment and improvements with the Education Stabilization Funds which should have been recorded as capital assets purchased with federal grant funds as these items individually exceeded the capitalization threshold. However, none of the equipment or improvements were detailed in the capital asset listing which also could have documented if the items were properly maintained and safeguarded as required. INDIANA STATE BOARD OF ACCOUNTS 33 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) In addition, in the prior engagement, the School Corporation provided a capital asset listing which included $5,414,399 of assets which were paid from the Education Stabilization Fund. None of these items were detailed on the capital asset listing provided. Furthermore, the capital asset listing provided did not include all required information, which would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Lastly, the School Corporation did not complete a capital asset inventory every two years as required. The lack of internal controls and noncompliance were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition 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 the property 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. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." INDIANA STATE BOARD OF ACCOUNTS 34 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management did not develop a system of internal controls to ensure that all items over the capital asset threshold were added to the listing, the capital asset listing included all required information, items purchased were properly maintained and safeguarded, and that a physical inventory was completed at least every two years as required. The School Corporation implemented a new system for capital assets; however, the only items added to the capital asset listing were below the capital asset threshold. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls that would ensure compliance with the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-009 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D210013, S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-010. Condition and Context The School Corporation had not properly designed a system of internal controls to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. A property record or capital asset listing is required to be maintained for all equipment, property improvements, and property purchased with the Education Stabilization Fund grant awards to ensure adequate safeguards are in place to prevent loss or damage of items. Equipment to be included in the listing is that which exceeds the School Corporation's capital asset threshold of $5,000. The School Corporation purchased $3,708,207 of equipment and improvements with the Education Stabilization Funds which should have been recorded as capital assets purchased with federal grant funds as these items individually exceeded the capitalization threshold. However, none of the equipment or improvements were detailed in the capital asset listing which also could have documented if the items were properly maintained and safeguarded as required. INDIANA STATE BOARD OF ACCOUNTS 33 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) In addition, in the prior engagement, the School Corporation provided a capital asset listing which included $5,414,399 of assets which were paid from the Education Stabilization Fund. None of these items were detailed on the capital asset listing provided. Furthermore, the capital asset listing provided did not include all required information, which would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Lastly, the School Corporation did not complete a capital asset inventory every two years as required. The lack of internal controls and noncompliance were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition 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 the property 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. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." INDIANA STATE BOARD OF ACCOUNTS 34 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management did not develop a system of internal controls to ensure that all items over the capital asset threshold were added to the listing, the capital asset listing included all required information, items purchased were properly maintained and safeguarded, and that a physical inventory was completed at least every two years as required. The School Corporation implemented a new system for capital assets; however, the only items added to the capital asset listing were below the capital asset threshold. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls that would ensure compliance with the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-009 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D210013, S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-010. Condition and Context The School Corporation had not properly designed a system of internal controls to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. A property record or capital asset listing is required to be maintained for all equipment, property improvements, and property purchased with the Education Stabilization Fund grant awards to ensure adequate safeguards are in place to prevent loss or damage of items. Equipment to be included in the listing is that which exceeds the School Corporation's capital asset threshold of $5,000. The School Corporation purchased $3,708,207 of equipment and improvements with the Education Stabilization Funds which should have been recorded as capital assets purchased with federal grant funds as these items individually exceeded the capitalization threshold. However, none of the equipment or improvements were detailed in the capital asset listing which also could have documented if the items were properly maintained and safeguarded as required. INDIANA STATE BOARD OF ACCOUNTS 33 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) In addition, in the prior engagement, the School Corporation provided a capital asset listing which included $5,414,399 of assets which were paid from the Education Stabilization Fund. None of these items were detailed on the capital asset listing provided. Furthermore, the capital asset listing provided did not include all required information, which would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Lastly, the School Corporation did not complete a capital asset inventory every two years as required. The lack of internal controls and noncompliance were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition 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 the property 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. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." INDIANA STATE BOARD OF ACCOUNTS 34 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management did not develop a system of internal controls to ensure that all items over the capital asset threshold were added to the listing, the capital asset listing included all required information, items purchased were properly maintained and safeguarded, and that a physical inventory was completed at least every two years as required. The School Corporation implemented a new system for capital assets; however, the only items added to the capital asset listing were below the capital asset threshold. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls that would ensure compliance with the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-009 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D210013, S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-010. Condition and Context The School Corporation had not properly designed a system of internal controls to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. A property record or capital asset listing is required to be maintained for all equipment, property improvements, and property purchased with the Education Stabilization Fund grant awards to ensure adequate safeguards are in place to prevent loss or damage of items. Equipment to be included in the listing is that which exceeds the School Corporation's capital asset threshold of $5,000. The School Corporation purchased $3,708,207 of equipment and improvements with the Education Stabilization Funds which should have been recorded as capital assets purchased with federal grant funds as these items individually exceeded the capitalization threshold. However, none of the equipment or improvements were detailed in the capital asset listing which also could have documented if the items were properly maintained and safeguarded as required. INDIANA STATE BOARD OF ACCOUNTS 33 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) In addition, in the prior engagement, the School Corporation provided a capital asset listing which included $5,414,399 of assets which were paid from the Education Stabilization Fund. None of these items were detailed on the capital asset listing provided. Furthermore, the capital asset listing provided did not include all required information, which would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Lastly, the School Corporation did not complete a capital asset inventory every two years as required. The lack of internal controls and noncompliance were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition 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 the property 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. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." INDIANA STATE BOARD OF ACCOUNTS 34 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management did not develop a system of internal controls to ensure that all items over the capital asset threshold were added to the listing, the capital asset listing included all required information, items purchased were properly maintained and safeguarded, and that a physical inventory was completed at least every two years as required. The School Corporation implemented a new system for capital assets; however, the only items added to the capital asset listing were below the capital asset threshold. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls that would ensure compliance with the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-009 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D210013, S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-010. Condition and Context The School Corporation had not properly designed a system of internal controls to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. A property record or capital asset listing is required to be maintained for all equipment, property improvements, and property purchased with the Education Stabilization Fund grant awards to ensure adequate safeguards are in place to prevent loss or damage of items. Equipment to be included in the listing is that which exceeds the School Corporation's capital asset threshold of $5,000. The School Corporation purchased $3,708,207 of equipment and improvements with the Education Stabilization Funds which should have been recorded as capital assets purchased with federal grant funds as these items individually exceeded the capitalization threshold. However, none of the equipment or improvements were detailed in the capital asset listing which also could have documented if the items were properly maintained and safeguarded as required. INDIANA STATE BOARD OF ACCOUNTS 33 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) In addition, in the prior engagement, the School Corporation provided a capital asset listing which included $5,414,399 of assets which were paid from the Education Stabilization Fund. None of these items were detailed on the capital asset listing provided. Furthermore, the capital asset listing provided did not include all required information, which would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Lastly, the School Corporation did not complete a capital asset inventory every two years as required. The lack of internal controls and noncompliance were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing 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 or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition 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 the property 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. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." INDIANA STATE BOARD OF ACCOUNTS 34 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management did not develop a system of internal controls to ensure that all items over the capital asset threshold were added to the listing, the capital asset listing included all required information, items purchased were properly maintained and safeguarded, and that a physical inventory was completed at least every two years as required. The School Corporation implemented a new system for capital assets; however, the only items added to the capital asset listing were below the capital asset threshold. Effect Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management design and implement a proper system of internal controls that would ensure compliance with the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.