Audit 347466

Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the eligibility compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with eligibility requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were $1,953 of questioned costs identified. Context: During the testing of internal controls over eligibility determinations for free and reduced meals, we noted management was unable to provide support for three of the 60 applications selected for testing. Additionally, for one of the 60 selections, the student was improperly classified as reduced when the annual income per the student’s application exceeded the corresponding threshold for that determination. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation's management establish an internal control process to review all applications to determine if the student qualifies for free or reduced meals. There should be a formal sign off in place that the application has been reviewed and the student’s classification of free or reduced is appropriate. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the eligibility compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with eligibility requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were $1,953 of questioned costs identified. Context: During the testing of internal controls over eligibility determinations for free and reduced meals, we noted management was unable to provide support for three of the 60 applications selected for testing. Additionally, for one of the 60 selections, the student was improperly classified as reduced when the annual income per the student’s application exceeded the corresponding threshold for that determination. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation's management establish an internal control process to review all applications to determine if the student qualifies for free or reduced meals. There should be a formal sign off in place that the application has been reviewed and the student’s classification of free or reduced is appropriate. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the eligibility compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with eligibility requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were $1,953 of questioned costs identified. Context: During the testing of internal controls over eligibility determinations for free and reduced meals, we noted management was unable to provide support for three of the 60 applications selected for testing. Additionally, for one of the 60 selections, the student was improperly classified as reduced when the annual income per the student’s application exceeded the corresponding threshold for that determination. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation's management establish an internal control process to review all applications to determine if the student qualifies for free or reduced meals. There should be a formal sign off in place that the application has been reviewed and the student’s classification of free or reduced is appropriate. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program AL Numbers: 10.553, 10.555 Federal Award Numbers and Years: FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Qualified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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 section 200.303 states in part: "The non-Federal entity must use one of the following methods of procurement… (b) Simplified acquisition thresholds. The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations. Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the simplified acquisitions procurement method of the Procurement and Suspension and Debarment compliance requirement. Cause: The School Corporation's management noted that the vendor they chose to work with was one they could rely on to deliver high quality products on time. Management stated that during the years under audit, they found it hard to find other vendors that had quality items in stock that they could count on to be delivered on time when they were needed. Effect: The failure to establish an effective internal control system enabled noncompliance with the grant agreement and the simplified acquisition procurement method of the Procurement and Suspension and Debarment compliance requirement. Questioned Costs: There were no questioned costs identified. Context: During the audit period, we tested two vendors that fell within the Small Purchase procurement threshold. Small purchases are those vendors that the School Corporation has purchased between $10,000 and $150,000 of products and goods from during the fiscal year. For one of the two vendors selected for testing, we noted the School Corporation did not obtain price or rate quotations from other vendors or document the basis for purchasing from the vendor that was utilized. The School Corporation had $134,542 and $117,589 of expenditures with the vendor for fiscal years 2023 and 2024, respectively. The School Corporation was not able to provide verification that the vendor is not suspended or debarred. The lack of controls and noncompliance occurred throughout the audit period. There were no other issues noted during the testing of Procurement and Suspension and Debarment. Identification as a repeat finding, if applicable: Yes. See finding 2022-001 in the prior audit report. Recommendation: We recommended that the School Corporation's management establish controls related to the grant agreement and the small purchase procurement method of the Procurement and Suspension and Debarment compliance requirement. Management should obtain multiple quotes, document rationale for vendor selection and perform suspension and debarment checks. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program AL Numbers: 10.553, 10.555 Federal Award Numbers and Years: FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Qualified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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 section 200.303 states in part: "The non-Federal entity must use one of the following methods of procurement… (b) Simplified acquisition thresholds. The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations. Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the simplified acquisitions procurement method of the Procurement and Suspension and Debarment compliance requirement. Cause: The School Corporation's management noted that the vendor they chose to work with was one they could rely on to deliver high quality products on time. Management stated that during the years under audit, they found it hard to find other vendors that had quality items in stock that they could count on to be delivered on time when they were needed. Effect: The failure to establish an effective internal control system enabled noncompliance with the grant agreement and the simplified acquisition procurement method of the Procurement and Suspension and Debarment compliance requirement. Questioned Costs: There were no questioned costs identified. Context: During the audit period, we tested two vendors that fell within the Small Purchase procurement threshold. Small purchases are those vendors that the School Corporation has purchased between $10,000 and $150,000 of products and goods from during the fiscal year. For one of the two vendors selected for testing, we noted the School Corporation did not obtain price or rate quotations from other vendors or document the basis for purchasing from the vendor that was utilized. The School Corporation had $134,542 and $117,589 of expenditures with the vendor for fiscal years 2023 and 2024, respectively. The School Corporation was not able to provide verification that the vendor is not suspended or debarred. The lack of controls and noncompliance occurred throughout the audit period. There were no other issues noted during the testing of Procurement and Suspension and Debarment. Identification as a repeat finding, if applicable: Yes. See finding 2022-001 in the prior audit report. Recommendation: We recommended that the School Corporation's management establish controls related to the grant agreement and the small purchase procurement method of the Procurement and Suspension and Debarment compliance requirement. Management should obtain multiple quotes, document rationale for vendor selection and perform suspension and debarment checks. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program AL Numbers: 10.553, 10.555 Federal Award Numbers and Years: FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Qualified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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 section 200.303 states in part: "The non-Federal entity must use one of the following methods of procurement… (b) Simplified acquisition thresholds. The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations. Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the simplified acquisitions procurement method of the Procurement and Suspension and Debarment compliance requirement. Cause: The School Corporation's management noted that the vendor they chose to work with was one they could rely on to deliver high quality products on time. Management stated that during the years under audit, they found it hard to find other vendors that had quality items in stock that they could count on to be delivered on time when they were needed. Effect: The failure to establish an effective internal control system enabled noncompliance with the grant agreement and the simplified acquisition procurement method of the Procurement and Suspension and Debarment compliance requirement. Questioned Costs: There were no questioned costs identified. Context: During the audit period, we tested two vendors that fell within the Small Purchase procurement threshold. Small purchases are those vendors that the School Corporation has purchased between $10,000 and $150,000 of products and goods from during the fiscal year. For one of the two vendors selected for testing, we noted the School Corporation did not obtain price or rate quotations from other vendors or document the basis for purchasing from the vendor that was utilized. The School Corporation had $134,542 and $117,589 of expenditures with the vendor for fiscal years 2023 and 2024, respectively. The School Corporation was not able to provide verification that the vendor is not suspended or debarred. The lack of controls and noncompliance occurred throughout the audit period. There were no other issues noted during the testing of Procurement and Suspension and Debarment. Identification as a repeat finding, if applicable: Yes. See finding 2022-001 in the prior audit report. Recommendation: We recommended that the School Corporation's management establish controls related to the grant agreement and the small purchase procurement method of the Procurement and Suspension and Debarment compliance requirement. Management should obtain multiple quotes, document rationale for vendor selection and perform suspension and debarment checks. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management implemented a review control over the annual data reports, however, it was not sufficient enough to detect and prevent errors in annual data reports submitted to the Indiana Department of Education. Effect: Annual data reports submitted during the audit period to the Indiana Department of Education contained material errors compared to underlying transaction detail for the period reported. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($288,565 and $115,716, respectively) did not agree to the underlying expenditure records ($139,081 and $88,437, respectively) for the period of July 1, 2022 through June 30, 2023. Additionally, the School Corporation was not able to provide any support for the 86 full-time equivalent (FTE) positions on September 30, 2022, reported on the Year 3 CrossAct report or the 110 full-time equivalent (FTE) positions on September 30, 2023, reported on the Year 4 CrossAct report. Identification as a repeat finding: No. Recommendation: We recommend management review internal controls over the review of annual data reports to ensure the data to be submitted agrees to underlying transaction detail or other supporting documentation prior to the submission of the annual data report. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management implemented a review control over the annual data reports, however, it was not sufficient enough to detect and prevent errors in annual data reports submitted to the Indiana Department of Education. Effect: Annual data reports submitted during the audit period to the Indiana Department of Education contained material errors compared to underlying transaction detail for the period reported. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($288,565 and $115,716, respectively) did not agree to the underlying expenditure records ($139,081 and $88,437, respectively) for the period of July 1, 2022 through June 30, 2023. Additionally, the School Corporation was not able to provide any support for the 86 full-time equivalent (FTE) positions on September 30, 2022, reported on the Year 3 CrossAct report or the 110 full-time equivalent (FTE) positions on September 30, 2023, reported on the Year 4 CrossAct report. Identification as a repeat finding: No. Recommendation: We recommend management review internal controls over the review of annual data reports to ensure the data to be submitted agrees to underlying transaction detail or other supporting documentation prior to the submission of the annual data report. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the eligibility compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with eligibility requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were $1,953 of questioned costs identified. Context: During the testing of internal controls over eligibility determinations for free and reduced meals, we noted management was unable to provide support for three of the 60 applications selected for testing. Additionally, for one of the 60 selections, the student was improperly classified as reduced when the annual income per the student’s application exceeded the corresponding threshold for that determination. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation's management establish an internal control process to review all applications to determine if the student qualifies for free or reduced meals. There should be a formal sign off in place that the application has been reviewed and the student’s classification of free or reduced is appropriate. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the eligibility compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with eligibility requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were $1,953 of questioned costs identified. Context: During the testing of internal controls over eligibility determinations for free and reduced meals, we noted management was unable to provide support for three of the 60 applications selected for testing. Additionally, for one of the 60 selections, the student was improperly classified as reduced when the annual income per the student’s application exceeded the corresponding threshold for that determination. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation's management establish an internal control process to review all applications to determine if the student qualifies for free or reduced meals. There should be a formal sign off in place that the application has been reviewed and the student’s classification of free or reduced is appropriate. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the eligibility compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with eligibility requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were $1,953 of questioned costs identified. Context: During the testing of internal controls over eligibility determinations for free and reduced meals, we noted management was unable to provide support for three of the 60 applications selected for testing. Additionally, for one of the 60 selections, the student was improperly classified as reduced when the annual income per the student’s application exceeded the corresponding threshold for that determination. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation's management establish an internal control process to review all applications to determine if the student qualifies for free or reduced meals. There should be a formal sign off in place that the application has been reviewed and the student’s classification of free or reduced is appropriate. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program AL Numbers: 10.553, 10.555 Federal Award Numbers and Years: FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Qualified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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 section 200.303 states in part: "The non-Federal entity must use one of the following methods of procurement… (b) Simplified acquisition thresholds. The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations. Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the simplified acquisitions procurement method of the Procurement and Suspension and Debarment compliance requirement. Cause: The School Corporation's management noted that the vendor they chose to work with was one they could rely on to deliver high quality products on time. Management stated that during the years under audit, they found it hard to find other vendors that had quality items in stock that they could count on to be delivered on time when they were needed. Effect: The failure to establish an effective internal control system enabled noncompliance with the grant agreement and the simplified acquisition procurement method of the Procurement and Suspension and Debarment compliance requirement. Questioned Costs: There were no questioned costs identified. Context: During the audit period, we tested two vendors that fell within the Small Purchase procurement threshold. Small purchases are those vendors that the School Corporation has purchased between $10,000 and $150,000 of products and goods from during the fiscal year. For one of the two vendors selected for testing, we noted the School Corporation did not obtain price or rate quotations from other vendors or document the basis for purchasing from the vendor that was utilized. The School Corporation had $134,542 and $117,589 of expenditures with the vendor for fiscal years 2023 and 2024, respectively. The School Corporation was not able to provide verification that the vendor is not suspended or debarred. The lack of controls and noncompliance occurred throughout the audit period. There were no other issues noted during the testing of Procurement and Suspension and Debarment. Identification as a repeat finding, if applicable: Yes. See finding 2022-001 in the prior audit report. Recommendation: We recommended that the School Corporation's management establish controls related to the grant agreement and the small purchase procurement method of the Procurement and Suspension and Debarment compliance requirement. Management should obtain multiple quotes, document rationale for vendor selection and perform suspension and debarment checks. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program AL Numbers: 10.553, 10.555 Federal Award Numbers and Years: FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Qualified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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 section 200.303 states in part: "The non-Federal entity must use one of the following methods of procurement… (b) Simplified acquisition thresholds. The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations. Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the simplified acquisitions procurement method of the Procurement and Suspension and Debarment compliance requirement. Cause: The School Corporation's management noted that the vendor they chose to work with was one they could rely on to deliver high quality products on time. Management stated that during the years under audit, they found it hard to find other vendors that had quality items in stock that they could count on to be delivered on time when they were needed. Effect: The failure to establish an effective internal control system enabled noncompliance with the grant agreement and the simplified acquisition procurement method of the Procurement and Suspension and Debarment compliance requirement. Questioned Costs: There were no questioned costs identified. Context: During the audit period, we tested two vendors that fell within the Small Purchase procurement threshold. Small purchases are those vendors that the School Corporation has purchased between $10,000 and $150,000 of products and goods from during the fiscal year. For one of the two vendors selected for testing, we noted the School Corporation did not obtain price or rate quotations from other vendors or document the basis for purchasing from the vendor that was utilized. The School Corporation had $134,542 and $117,589 of expenditures with the vendor for fiscal years 2023 and 2024, respectively. The School Corporation was not able to provide verification that the vendor is not suspended or debarred. The lack of controls and noncompliance occurred throughout the audit period. There were no other issues noted during the testing of Procurement and Suspension and Debarment. Identification as a repeat finding, if applicable: Yes. See finding 2022-001 in the prior audit report. Recommendation: We recommended that the School Corporation's management establish controls related to the grant agreement and the small purchase procurement method of the Procurement and Suspension and Debarment compliance requirement. Management should obtain multiple quotes, document rationale for vendor selection and perform suspension and debarment checks. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program AL Numbers: 10.553, 10.555 Federal Award Numbers and Years: FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Qualified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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 section 200.303 states in part: "The non-Federal entity must use one of the following methods of procurement… (b) Simplified acquisition thresholds. The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations. Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the simplified acquisitions procurement method of the Procurement and Suspension and Debarment compliance requirement. Cause: The School Corporation's management noted that the vendor they chose to work with was one they could rely on to deliver high quality products on time. Management stated that during the years under audit, they found it hard to find other vendors that had quality items in stock that they could count on to be delivered on time when they were needed. Effect: The failure to establish an effective internal control system enabled noncompliance with the grant agreement and the simplified acquisition procurement method of the Procurement and Suspension and Debarment compliance requirement. Questioned Costs: There were no questioned costs identified. Context: During the audit period, we tested two vendors that fell within the Small Purchase procurement threshold. Small purchases are those vendors that the School Corporation has purchased between $10,000 and $150,000 of products and goods from during the fiscal year. For one of the two vendors selected for testing, we noted the School Corporation did not obtain price or rate quotations from other vendors or document the basis for purchasing from the vendor that was utilized. The School Corporation had $134,542 and $117,589 of expenditures with the vendor for fiscal years 2023 and 2024, respectively. The School Corporation was not able to provide verification that the vendor is not suspended or debarred. The lack of controls and noncompliance occurred throughout the audit period. There were no other issues noted during the testing of Procurement and Suspension and Debarment. Identification as a repeat finding, if applicable: Yes. See finding 2022-001 in the prior audit report. Recommendation: We recommended that the School Corporation's management establish controls related to the grant agreement and the small purchase procurement method of the Procurement and Suspension and Debarment compliance requirement. Management should obtain multiple quotes, document rationale for vendor selection and perform suspension and debarment checks. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management implemented a review control over the annual data reports, however, it was not sufficient enough to detect and prevent errors in annual data reports submitted to the Indiana Department of Education. Effect: Annual data reports submitted during the audit period to the Indiana Department of Education contained material errors compared to underlying transaction detail for the period reported. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($288,565 and $115,716, respectively) did not agree to the underlying expenditure records ($139,081 and $88,437, respectively) for the period of July 1, 2022 through June 30, 2023. Additionally, the School Corporation was not able to provide any support for the 86 full-time equivalent (FTE) positions on September 30, 2022, reported on the Year 3 CrossAct report or the 110 full-time equivalent (FTE) positions on September 30, 2023, reported on the Year 4 CrossAct report. Identification as a repeat finding: No. Recommendation: We recommend management review internal controls over the review of annual data reports to ensure the data to be submitted agrees to underlying transaction detail or other supporting documentation prior to the submission of the annual data report. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management implemented a review control over the annual data reports, however, it was not sufficient enough to detect and prevent errors in annual data reports submitted to the Indiana Department of Education. Effect: Annual data reports submitted during the audit period to the Indiana Department of Education contained material errors compared to underlying transaction detail for the period reported. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($288,565 and $115,716, respectively) did not agree to the underlying expenditure records ($139,081 and $88,437, respectively) for the period of July 1, 2022 through June 30, 2023. Additionally, the School Corporation was not able to provide any support for the 86 full-time equivalent (FTE) positions on September 30, 2022, reported on the Year 3 CrossAct report or the 110 full-time equivalent (FTE) positions on September 30, 2023, reported on the Year 4 CrossAct report. Identification as a repeat finding: No. Recommendation: We recommend management review internal controls over the review of annual data reports to ensure the data to be submitted agrees to underlying transaction detail or other supporting documentation prior to the submission of the annual data report. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.