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): S425D200013, 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 I amount reported on the Year 3 report ($86,004) did not agree to the
underlying expenditure records ($196,436) for the period of July 1, 2021 through June 30, 2022.
We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($0 and $1,684,755,
respectively) did not agree to the underlying expenditure records ($1,391,963 and $4,330,649, respectively),
for the period of July 1, 2022 through June 30, 2023.
Identification as a repeat finding: Yes. See Finding 2022-003 in the prior audit report.
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): S425D200013, 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 I amount reported on the Year 3 report ($86,004) did not agree to the
underlying expenditure records ($196,436) for the period of July 1, 2021 through June 30, 2022.
We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($0 and $1,684,755,
respectively) did not agree to the underlying expenditure records ($1,391,963 and $4,330,649, respectively),
for the period of July 1, 2022 through June 30, 2023.
Identification as a repeat finding: Yes. See Finding 2022-003 in the prior audit report.
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): S425D200013, 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 I amount reported on the Year 3 report ($86,004) did not agree to the
underlying expenditure records ($196,436) for the period of July 1, 2021 through June 30, 2022.
We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($0 and $1,684,755,
respectively) did not agree to the underlying expenditure records ($1,391,963 and $4,330,649, respectively),
for the period of July 1, 2022 through June 30, 2023.
Identification as a repeat finding: Yes. See Finding 2022-003 in the prior audit report.
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): S425D200013, 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 I amount reported on the Year 3 report ($86,004) did not agree to the
underlying expenditure records ($196,436) for the period of July 1, 2021 through June 30, 2022.
We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($0 and $1,684,755,
respectively) did not agree to the underlying expenditure records ($1,391,963 and $4,330,649, respectively),
for the period of July 1, 2022 through June 30, 2023.
Identification as a repeat finding: Yes. See Finding 2022-003 in the prior audit report.
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 – Special Tests and Provisions - Wage Rate Requirements
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: Special Tests and Provisions - Wage Rate Requirements
Audit Findings: Material Weakness, Material Noncompliance, 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). 29 CFR 5.5 states in part:
(1) Minimum wages.
(i) All laborers and mechanics employed or working upon the site of the work (or under the United
States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the
project),
will be paid unconditionally and not less often than once a week, and without subsequent deduction or
rebate on any account (except such payroll deductions as are permitted by regulations issued by the
Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe
benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those
contained in the wage determination of the Secretary of Labor which is attached hereto and made a part
hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and
such laborers and mechanics…
(3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy
of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract,
but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or
owner, as the case may be, for transmission to the (write in name of agency).
2 CFR 200 Appendix II states in part:
In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by
the non-Federal entity under the Federal award must contain provisions covering the following, as
applicable. . . .
(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation,
all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a
provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented
by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts
Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must
be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified
in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay
w ages not less than once a week.. . .”
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 Special Tests and Provisions
– Wage Rate Requirements compliance requirements.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with the compliance requirements listed above.
Effect: The failure to design and implement an effective internal control system enabled material
noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and
Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal
funds to the School Corporation.
Questioned Costs: There were no questioned costs identified. Context: The School Corporation had projects for construction of new facilities including an early learning
center and improvements to sports facilities which was funded with ESSER II (84.425D) and ESSER III
(84.425U) grant awards. In our sample of three vendors, the School Corporation did not include Davis-
Bacon wage rate requirements in the vendor contract, and therefore the vendor did not include the verbiage
within their subcontractor agreements. Also, the School Corporation did not obtain the weekly payroll
reports certifications from the construction vendor to monitor compliance with Davis-Bacon wage rate
requirements. Therefore, no review was performed to ensure that pay rates complied with the federal wage
rate requirements during the audit period. The total project costs disbursed during the audit period in our
sample was $3,681,455 which includes material and labor costs.
Identification as a repeat finding: Yes. See Finding 2022-002 in the prior audit report.
Recommendation: We recommend the School Corporation include a wage rate requirement clause in all
contracts requiring labor installation which are funded with federal grants. We also recommend the School
Corporation implement a formal process to ensure the required weekly payroll reports certifications are
collected and reviewed for projects requiring labor installation and funded by federal grants subject to Davis-
Bacon wage rate requirements to ensure compliance with federal regulations.
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 – Special Tests and Provisions - Wage Rate Requirements
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: Special Tests and Provisions - Wage Rate Requirements
Audit Findings: Material Weakness, Material Noncompliance, 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). 29 CFR 5.5 states in part:
(1) Minimum wages.
(i) All laborers and mechanics employed or working upon the site of the work (or under the United
States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the
project),
will be paid unconditionally and not less often than once a week, and without subsequent deduction or
rebate on any account (except such payroll deductions as are permitted by regulations issued by the
Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe
benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those
contained in the wage determination of the Secretary of Labor which is attached hereto and made a part
hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and
such laborers and mechanics…
(3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy
of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract,
but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or
owner, as the case may be, for transmission to the (write in name of agency).
2 CFR 200 Appendix II states in part:
In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by
the non-Federal entity under the Federal award must contain provisions covering the following, as
applicable. . . .
(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation,
all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a
provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented
by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts
Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must
be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified
in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay
w ages not less than once a week.. . .”
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 Special Tests and Provisions
– Wage Rate Requirements compliance requirements.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with the compliance requirements listed above.
Effect: The failure to design and implement an effective internal control system enabled material
noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and
Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal
funds to the School Corporation.
Questioned Costs: There were no questioned costs identified. Context: The School Corporation had projects for construction of new facilities including an early learning
center and improvements to sports facilities which was funded with ESSER II (84.425D) and ESSER III
(84.425U) grant awards. In our sample of three vendors, the School Corporation did not include Davis-
Bacon wage rate requirements in the vendor contract, and therefore the vendor did not include the verbiage
within their subcontractor agreements. Also, the School Corporation did not obtain the weekly payroll
reports certifications from the construction vendor to monitor compliance with Davis-Bacon wage rate
requirements. Therefore, no review was performed to ensure that pay rates complied with the federal wage
rate requirements during the audit period. The total project costs disbursed during the audit period in our
sample was $3,681,455 which includes material and labor costs.
Identification as a repeat finding: Yes. See Finding 2022-002 in the prior audit report.
Recommendation: We recommend the School Corporation include a wage rate requirement clause in all
contracts requiring labor installation which are funded with federal grants. We also recommend the School
Corporation implement a formal process to ensure the required weekly payroll reports certifications are
collected and reviewed for projects requiring labor installation and funded by federal grants subject to Davis-
Bacon wage rate requirements to ensure compliance with federal regulations.
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 – Special Tests and Provisions - Wage Rate Requirements
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: Special Tests and Provisions - Wage Rate Requirements
Audit Findings: Material Weakness, Material Noncompliance, 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). 29 CFR 5.5 states in part:
(1) Minimum wages.
(i) All laborers and mechanics employed or working upon the site of the work (or under the United
States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the
project),
will be paid unconditionally and not less often than once a week, and without subsequent deduction or
rebate on any account (except such payroll deductions as are permitted by regulations issued by the
Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe
benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those
contained in the wage determination of the Secretary of Labor which is attached hereto and made a part
hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and
such laborers and mechanics…
(3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy
of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract,
but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or
owner, as the case may be, for transmission to the (write in name of agency).
2 CFR 200 Appendix II states in part:
In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by
the non-Federal entity under the Federal award must contain provisions covering the following, as
applicable. . . .
(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation,
all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a
provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented
by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts
Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must
be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified
in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay
w ages not less than once a week.. . .”
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 Special Tests and Provisions
– Wage Rate Requirements compliance requirements.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with the compliance requirements listed above.
Effect: The failure to design and implement an effective internal control system enabled material
noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and
Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal
funds to the School Corporation.
Questioned Costs: There were no questioned costs identified. Context: The School Corporation had projects for construction of new facilities including an early learning
center and improvements to sports facilities which was funded with ESSER II (84.425D) and ESSER III
(84.425U) grant awards. In our sample of three vendors, the School Corporation did not include Davis-
Bacon wage rate requirements in the vendor contract, and therefore the vendor did not include the verbiage
within their subcontractor agreements. Also, the School Corporation did not obtain the weekly payroll
reports certifications from the construction vendor to monitor compliance with Davis-Bacon wage rate
requirements. Therefore, no review was performed to ensure that pay rates complied with the federal wage
rate requirements during the audit period. The total project costs disbursed during the audit period in our
sample was $3,681,455 which includes material and labor costs.
Identification as a repeat finding: Yes. See Finding 2022-002 in the prior audit report.
Recommendation: We recommend the School Corporation include a wage rate requirement clause in all
contracts requiring labor installation which are funded with federal grants. We also recommend the School
Corporation implement a formal process to ensure the required weekly payroll reports certifications are
collected and reviewed for projects requiring labor installation and funded by federal grants subject to Davis-
Bacon wage rate requirements to ensure compliance with federal regulations.
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): S425D200013, 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 I amount reported on the Year 3 report ($86,004) did not agree to the
underlying expenditure records ($196,436) for the period of July 1, 2021 through June 30, 2022.
We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($0 and $1,684,755,
respectively) did not agree to the underlying expenditure records ($1,391,963 and $4,330,649, respectively),
for the period of July 1, 2022 through June 30, 2023.
Identification as a repeat finding: Yes. See Finding 2022-003 in the prior audit report.
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): S425D200013, 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 I amount reported on the Year 3 report ($86,004) did not agree to the
underlying expenditure records ($196,436) for the period of July 1, 2021 through June 30, 2022.
We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($0 and $1,684,755,
respectively) did not agree to the underlying expenditure records ($1,391,963 and $4,330,649, respectively),
for the period of July 1, 2022 through June 30, 2023.
Identification as a repeat finding: Yes. See Finding 2022-003 in the prior audit report.
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): S425D200013, 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 I amount reported on the Year 3 report ($86,004) did not agree to the
underlying expenditure records ($196,436) for the period of July 1, 2021 through June 30, 2022.
We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($0 and $1,684,755,
respectively) did not agree to the underlying expenditure records ($1,391,963 and $4,330,649, respectively),
for the period of July 1, 2022 through June 30, 2023.
Identification as a repeat finding: Yes. See Finding 2022-003 in the prior audit report.
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): S425D200013, 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 I amount reported on the Year 3 report ($86,004) did not agree to the
underlying expenditure records ($196,436) for the period of July 1, 2021 through June 30, 2022.
We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($0 and $1,684,755,
respectively) did not agree to the underlying expenditure records ($1,391,963 and $4,330,649, respectively),
for the period of July 1, 2022 through June 30, 2023.
Identification as a repeat finding: Yes. See Finding 2022-003 in the prior audit report.
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 – Special Tests and Provisions - Wage Rate Requirements
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: Special Tests and Provisions - Wage Rate Requirements
Audit Findings: Material Weakness, Material Noncompliance, 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). 29 CFR 5.5 states in part:
(1) Minimum wages.
(i) All laborers and mechanics employed or working upon the site of the work (or under the United
States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the
project),
will be paid unconditionally and not less often than once a week, and without subsequent deduction or
rebate on any account (except such payroll deductions as are permitted by regulations issued by the
Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe
benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those
contained in the wage determination of the Secretary of Labor which is attached hereto and made a part
hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and
such laborers and mechanics…
(3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy
of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract,
but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or
owner, as the case may be, for transmission to the (write in name of agency).
2 CFR 200 Appendix II states in part:
In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by
the non-Federal entity under the Federal award must contain provisions covering the following, as
applicable. . . .
(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation,
all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a
provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented
by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts
Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must
be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified
in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay
w ages not less than once a week.. . .”
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 Special Tests and Provisions
– Wage Rate Requirements compliance requirements.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with the compliance requirements listed above.
Effect: The failure to design and implement an effective internal control system enabled material
noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and
Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal
funds to the School Corporation.
Questioned Costs: There were no questioned costs identified. Context: The School Corporation had projects for construction of new facilities including an early learning
center and improvements to sports facilities which was funded with ESSER II (84.425D) and ESSER III
(84.425U) grant awards. In our sample of three vendors, the School Corporation did not include Davis-
Bacon wage rate requirements in the vendor contract, and therefore the vendor did not include the verbiage
within their subcontractor agreements. Also, the School Corporation did not obtain the weekly payroll
reports certifications from the construction vendor to monitor compliance with Davis-Bacon wage rate
requirements. Therefore, no review was performed to ensure that pay rates complied with the federal wage
rate requirements during the audit period. The total project costs disbursed during the audit period in our
sample was $3,681,455 which includes material and labor costs.
Identification as a repeat finding: Yes. See Finding 2022-002 in the prior audit report.
Recommendation: We recommend the School Corporation include a wage rate requirement clause in all
contracts requiring labor installation which are funded with federal grants. We also recommend the School
Corporation implement a formal process to ensure the required weekly payroll reports certifications are
collected and reviewed for projects requiring labor installation and funded by federal grants subject to Davis-
Bacon wage rate requirements to ensure compliance with federal regulations.
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 – Special Tests and Provisions - Wage Rate Requirements
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: Special Tests and Provisions - Wage Rate Requirements
Audit Findings: Material Weakness, Material Noncompliance, 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). 29 CFR 5.5 states in part:
(1) Minimum wages.
(i) All laborers and mechanics employed or working upon the site of the work (or under the United
States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the
project),
will be paid unconditionally and not less often than once a week, and without subsequent deduction or
rebate on any account (except such payroll deductions as are permitted by regulations issued by the
Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe
benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those
contained in the wage determination of the Secretary of Labor which is attached hereto and made a part
hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and
such laborers and mechanics…
(3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy
of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract,
but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or
owner, as the case may be, for transmission to the (write in name of agency).
2 CFR 200 Appendix II states in part:
In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by
the non-Federal entity under the Federal award must contain provisions covering the following, as
applicable. . . .
(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation,
all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a
provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented
by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts
Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must
be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified
in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay
w ages not less than once a week.. . .”
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 Special Tests and Provisions
– Wage Rate Requirements compliance requirements.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with the compliance requirements listed above.
Effect: The failure to design and implement an effective internal control system enabled material
noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and
Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal
funds to the School Corporation.
Questioned Costs: There were no questioned costs identified. Context: The School Corporation had projects for construction of new facilities including an early learning
center and improvements to sports facilities which was funded with ESSER II (84.425D) and ESSER III
(84.425U) grant awards. In our sample of three vendors, the School Corporation did not include Davis-
Bacon wage rate requirements in the vendor contract, and therefore the vendor did not include the verbiage
within their subcontractor agreements. Also, the School Corporation did not obtain the weekly payroll
reports certifications from the construction vendor to monitor compliance with Davis-Bacon wage rate
requirements. Therefore, no review was performed to ensure that pay rates complied with the federal wage
rate requirements during the audit period. The total project costs disbursed during the audit period in our
sample was $3,681,455 which includes material and labor costs.
Identification as a repeat finding: Yes. See Finding 2022-002 in the prior audit report.
Recommendation: We recommend the School Corporation include a wage rate requirement clause in all
contracts requiring labor installation which are funded with federal grants. We also recommend the School
Corporation implement a formal process to ensure the required weekly payroll reports certifications are
collected and reviewed for projects requiring labor installation and funded by federal grants subject to Davis-
Bacon wage rate requirements to ensure compliance with federal regulations.
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 – Special Tests and Provisions - Wage Rate Requirements
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: Special Tests and Provisions - Wage Rate Requirements
Audit Findings: Material Weakness, Material Noncompliance, 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). 29 CFR 5.5 states in part:
(1) Minimum wages.
(i) All laborers and mechanics employed or working upon the site of the work (or under the United
States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the
project),
will be paid unconditionally and not less often than once a week, and without subsequent deduction or
rebate on any account (except such payroll deductions as are permitted by regulations issued by the
Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe
benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those
contained in the wage determination of the Secretary of Labor which is attached hereto and made a part
hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and
such laborers and mechanics…
(3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy
of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract,
but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or
owner, as the case may be, for transmission to the (write in name of agency).
2 CFR 200 Appendix II states in part:
In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by
the non-Federal entity under the Federal award must contain provisions covering the following, as
applicable. . . .
(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation,
all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a
provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented
by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts
Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must
be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified
in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay
w ages not less than once a week.. . .”
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 Special Tests and Provisions
– Wage Rate Requirements compliance requirements.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with the compliance requirements listed above.
Effect: The failure to design and implement an effective internal control system enabled material
noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and
Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal
funds to the School Corporation.
Questioned Costs: There were no questioned costs identified. Context: The School Corporation had projects for construction of new facilities including an early learning
center and improvements to sports facilities which was funded with ESSER II (84.425D) and ESSER III
(84.425U) grant awards. In our sample of three vendors, the School Corporation did not include Davis-
Bacon wage rate requirements in the vendor contract, and therefore the vendor did not include the verbiage
within their subcontractor agreements. Also, the School Corporation did not obtain the weekly payroll
reports certifications from the construction vendor to monitor compliance with Davis-Bacon wage rate
requirements. Therefore, no review was performed to ensure that pay rates complied with the federal wage
rate requirements during the audit period. The total project costs disbursed during the audit period in our
sample was $3,681,455 which includes material and labor costs.
Identification as a repeat finding: Yes. See Finding 2022-002 in the prior audit report.
Recommendation: We recommend the School Corporation include a wage rate requirement clause in all
contracts requiring labor installation which are funded with federal grants. We also recommend the School
Corporation implement a formal process to ensure the required weekly payroll reports certifications are
collected and reviewed for projects requiring labor installation and funded by federal grants subject to Davis-
Bacon wage rate requirements to ensure compliance with federal regulations.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.