FAC Explorer

Audit 347682

FY End
2024-06-30
Total Expended
$2.13M
Findings
8
Programs
11
Organization: Southern Wells Community Schools (IN)
Year: 2024 Accepted: 2025-03-24
Auditor: Crowe LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
529732 2024-001 Material Weakness - I
529733 2024-001 Material Weakness - I
529734 2024-001 Material Weakness - I
529735 2024-001 Material Weakness - I
1106174 2024-001 Material Weakness - I
1106175 2024-001 Material Weakness - I
1106176 2024-001 Material Weakness - I
1106177 2024-001 Material Weakness - I

Programs

ALN Program Spent Major Findings
84.425 Education Stabilization Fund $128,469 - 0
10.553 School Breakfast Program $121,181 Yes 1
84.010 Title I Grants to Local Educational Agencies $86,474 - 0
10.555 National School Lunch Program $74,149 Yes 1
84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) $18,663 - 0
84.048 Career and Technical Education -- Basic Grants to States $15,161 - 0
84.424 Student Support and Academic Enrichment Program $10,005 - 0
84.027 Special Education Grants to States $6,796 - 0
93.778 Medical Assistance Program $3,988 - 0
84.173 Special Education Preschool Grants $3,091 - 0
10.649 Pandemic Ebt Administrative Costs $628 - 0

Contacts

Name Title Type
K17BPZCVAEK5 Lora Warner Auditee
7657285537 Scott Nickerson Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 - BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the SEFA are reported on the cash basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to reimbursement. When federal grants are received on a reimbursement basis, the federal awards are considered expended when the reimbursement is received. De Minimis Rate Used: N Rate Explanation: The School Corporation has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. A. Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards (SEFA) includes the federal grant activity of the School Corporation under programs of the federal government for the period of July 1, 2022 through June 30, 2024. The information in the SEFA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the SEFA presents only a select portion of the operations of the School Corporation, it is not intended to and does not present the financial position of the School Corporation. The Uniform Guidance requires an annual audit of nonfederal entities expending a total amount of federal awards equal to or in excess of $750,000 in any fiscal year unless by constitution or statute a less frequent audit is required. In accordance with Indiana Code (IC 5-11-1-25), audits of school corporations shall be conducted biennially. Such audits shall include both years within the biennial period. B. Other Significant Accounting Policies Expenditures reported on the SEFA are reported on the cash basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to reimbursement. When federal grants are received on a reimbursement basis, the federal awards are considered expended when the reimbursement is received.
Title: NOTE 2 - INDIRECT COST RATE Accounting Policies: Expenditures reported on the SEFA are reported on the cash basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to reimbursement. When federal grants are received on a reimbursement basis, the federal awards are considered expended when the reimbursement is received. De Minimis Rate Used: N Rate Explanation: The School Corporation has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The School Corporation has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: NOTE 3 - OTHER INFORMATION Accounting Policies: Expenditures reported on the SEFA are reported on the cash basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to reimbursement. When federal grants are received on a reimbursement basis, the federal awards are considered expended when the reimbursement is received. De Minimis Rate Used: N Rate Explanation: The School Corporation has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The School Corporation did not have any subrecipient activity for the period of July 1, 2022 through June 30, 2024.
Title: NOTE 4 - NON-CASH PROGRAMS (COMMODITIES) Accounting Policies: Expenditures reported on the SEFA are reported on the cash basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to reimbursement. When federal grants are received on a reimbursement basis, the federal awards are considered expended when the reimbursement is received. De Minimis Rate Used: N Rate Explanation: The School Corporation has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. Commodities donated to the School Corporation by the U.S. Department of Agriculture (USDA) of $74,149 are valued based on the USDA’s donated commodity price list. These are shown as part of the National School Lunch Program (10.555).
Title: NOTE 5 - SPECIAL EDUCATION COOPERATIVE (ALN: 84.027, 84.027X, 84.173, 84.173X) Accounting Policies: Expenditures reported on the SEFA are reported on the cash basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to reimbursement. When federal grants are received on a reimbursement basis, the federal awards are considered expended when the reimbursement is received. De Minimis Rate Used: N Rate Explanation: The School Corporation has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The School Corporation is a member of the Adams-Wells Special Services Cooperative (Cooperative), which operates the special education program for the School Corporation. As a result, some activity for the Special Education Cluster (IDEA) that is presented on the SEFA is not presented as receipts and disbursements in the financial statement for the School Corporation. This activity is reported on the financial statement of the Cooperative.

Finding Details

Finding 2024-001
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): FY 22-23, FY 23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.318 states: “The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in 200.317 through 200.327.” and 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Cluster and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation’s management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement vendors utilized and not procured by the School Corporation’s purchasing cooperative. Effect: The failure to establish an effective internal control system could place the School Corporation at risk of noncompliance with the federal program and applicable federal/state procurement regulations. Not adhering to the School Corporation’s procurement policy designed to follow federal and state regulations, could result in the misuse and mismanagement of federal funds by conducting business with vendors not properly procured and verified to not be suspended or debarred. Questioned Costs: There we no questioned costs identified. Context: Procurement The School Corporation participates in the Region 8 Education Service Center Cooperative which procures vendors for many food purchases and other supplies on behalf of its members. During the audit period, the School Corporation contracted with vendors outside of the Cooperative. One vendor with aggregate annual purchases of $200,000 for fiscal year 2024 exceeded the simplified acquisition purchase threshold (greater than $150,000) but was subjected to small purchase acquisition instead of the policy to perform a formal procurement consisting of a request for proposal (RFP) that is publicly advertised. Suspension and Debarment For two vendors tested which were not procured by the Cooperative and had aggregate annual disbursements exceeding the federal suspension and debarment threshold of $25,000, the School Corporation did not perform suspension and debarment checks to confirm the vendors were not suspended or debarred before entering into the contract or disbursing federal funds. Identification as a repeat finding, if applicable: No. Recommendation: We recommend the School Corporation implement an internal control to monitor purchases within the Food Service Department with vendors that exceed the simplified acquisition dollar threshold, either individually or in annual aggregation, to ensure the School Corporation’s procurement policy is followed which includes advertising a formal request for proposal (RFP) and performing a full procurement process for purchases with vendors exceeding $150,000. We also recommend that the School Corporation implement an internal control process to monitor aggregate vendor disbursements in Fund 800, School Lunch, on annual basis and perform suspension and debarment checks for all vendors exceeding $25,000 in aggregate disbursements on an annual basis to ensure compliance with federal suspension and debarment regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2024-001
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): FY 22-23, FY 23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.318 states: “The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in 200.317 through 200.327.” and 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Cluster and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation’s management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement vendors utilized and not procured by the School Corporation’s purchasing cooperative. Effect: The failure to establish an effective internal control system could place the School Corporation at risk of noncompliance with the federal program and applicable federal/state procurement regulations. Not adhering to the School Corporation’s procurement policy designed to follow federal and state regulations, could result in the misuse and mismanagement of federal funds by conducting business with vendors not properly procured and verified to not be suspended or debarred. Questioned Costs: There we no questioned costs identified. Context: Procurement The School Corporation participates in the Region 8 Education Service Center Cooperative which procures vendors for many food purchases and other supplies on behalf of its members. During the audit period, the School Corporation contracted with vendors outside of the Cooperative. One vendor with aggregate annual purchases of $200,000 for fiscal year 2024 exceeded the simplified acquisition purchase threshold (greater than $150,000) but was subjected to small purchase acquisition instead of the policy to perform a formal procurement consisting of a request for proposal (RFP) that is publicly advertised. Suspension and Debarment For two vendors tested which were not procured by the Cooperative and had aggregate annual disbursements exceeding the federal suspension and debarment threshold of $25,000, the School Corporation did not perform suspension and debarment checks to confirm the vendors were not suspended or debarred before entering into the contract or disbursing federal funds. Identification as a repeat finding, if applicable: No. Recommendation: We recommend the School Corporation implement an internal control to monitor purchases within the Food Service Department with vendors that exceed the simplified acquisition dollar threshold, either individually or in annual aggregation, to ensure the School Corporation’s procurement policy is followed which includes advertising a formal request for proposal (RFP) and performing a full procurement process for purchases with vendors exceeding $150,000. We also recommend that the School Corporation implement an internal control process to monitor aggregate vendor disbursements in Fund 800, School Lunch, on annual basis and perform suspension and debarment checks for all vendors exceeding $25,000 in aggregate disbursements on an annual basis to ensure compliance with federal suspension and debarment regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2024-001
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): FY 22-23, FY 23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.318 states: “The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in 200.317 through 200.327.” and 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Cluster and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation’s management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement vendors utilized and not procured by the School Corporation’s purchasing cooperative. Effect: The failure to establish an effective internal control system could place the School Corporation at risk of noncompliance with the federal program and applicable federal/state procurement regulations. Not adhering to the School Corporation’s procurement policy designed to follow federal and state regulations, could result in the misuse and mismanagement of federal funds by conducting business with vendors not properly procured and verified to not be suspended or debarred. Questioned Costs: There we no questioned costs identified. Context: Procurement The School Corporation participates in the Region 8 Education Service Center Cooperative which procures vendors for many food purchases and other supplies on behalf of its members. During the audit period, the School Corporation contracted with vendors outside of the Cooperative. One vendor with aggregate annual purchases of $200,000 for fiscal year 2024 exceeded the simplified acquisition purchase threshold (greater than $150,000) but was subjected to small purchase acquisition instead of the policy to perform a formal procurement consisting of a request for proposal (RFP) that is publicly advertised. Suspension and Debarment For two vendors tested which were not procured by the Cooperative and had aggregate annual disbursements exceeding the federal suspension and debarment threshold of $25,000, the School Corporation did not perform suspension and debarment checks to confirm the vendors were not suspended or debarred before entering into the contract or disbursing federal funds. Identification as a repeat finding, if applicable: No. Recommendation: We recommend the School Corporation implement an internal control to monitor purchases within the Food Service Department with vendors that exceed the simplified acquisition dollar threshold, either individually or in annual aggregation, to ensure the School Corporation’s procurement policy is followed which includes advertising a formal request for proposal (RFP) and performing a full procurement process for purchases with vendors exceeding $150,000. We also recommend that the School Corporation implement an internal control process to monitor aggregate vendor disbursements in Fund 800, School Lunch, on annual basis and perform suspension and debarment checks for all vendors exceeding $25,000 in aggregate disbursements on an annual basis to ensure compliance with federal suspension and debarment regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2024-001
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): FY 22-23, FY 23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.318 states: “The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in 200.317 through 200.327.” and 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Cluster and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation’s management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement vendors utilized and not procured by the School Corporation’s purchasing cooperative. Effect: The failure to establish an effective internal control system could place the School Corporation at risk of noncompliance with the federal program and applicable federal/state procurement regulations. Not adhering to the School Corporation’s procurement policy designed to follow federal and state regulations, could result in the misuse and mismanagement of federal funds by conducting business with vendors not properly procured and verified to not be suspended or debarred. Questioned Costs: There we no questioned costs identified. Context: Procurement The School Corporation participates in the Region 8 Education Service Center Cooperative which procures vendors for many food purchases and other supplies on behalf of its members. During the audit period, the School Corporation contracted with vendors outside of the Cooperative. One vendor with aggregate annual purchases of $200,000 for fiscal year 2024 exceeded the simplified acquisition purchase threshold (greater than $150,000) but was subjected to small purchase acquisition instead of the policy to perform a formal procurement consisting of a request for proposal (RFP) that is publicly advertised. Suspension and Debarment For two vendors tested which were not procured by the Cooperative and had aggregate annual disbursements exceeding the federal suspension and debarment threshold of $25,000, the School Corporation did not perform suspension and debarment checks to confirm the vendors were not suspended or debarred before entering into the contract or disbursing federal funds. Identification as a repeat finding, if applicable: No. Recommendation: We recommend the School Corporation implement an internal control to monitor purchases within the Food Service Department with vendors that exceed the simplified acquisition dollar threshold, either individually or in annual aggregation, to ensure the School Corporation’s procurement policy is followed which includes advertising a formal request for proposal (RFP) and performing a full procurement process for purchases with vendors exceeding $150,000. We also recommend that the School Corporation implement an internal control process to monitor aggregate vendor disbursements in Fund 800, School Lunch, on annual basis and perform suspension and debarment checks for all vendors exceeding $25,000 in aggregate disbursements on an annual basis to ensure compliance with federal suspension and debarment regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2024-001
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): FY 22-23, FY 23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.318 states: “The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in 200.317 through 200.327.” and 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Cluster and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation’s management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement vendors utilized and not procured by the School Corporation’s purchasing cooperative. Effect: The failure to establish an effective internal control system could place the School Corporation at risk of noncompliance with the federal program and applicable federal/state procurement regulations. Not adhering to the School Corporation’s procurement policy designed to follow federal and state regulations, could result in the misuse and mismanagement of federal funds by conducting business with vendors not properly procured and verified to not be suspended or debarred. Questioned Costs: There we no questioned costs identified. Context: Procurement The School Corporation participates in the Region 8 Education Service Center Cooperative which procures vendors for many food purchases and other supplies on behalf of its members. During the audit period, the School Corporation contracted with vendors outside of the Cooperative. One vendor with aggregate annual purchases of $200,000 for fiscal year 2024 exceeded the simplified acquisition purchase threshold (greater than $150,000) but was subjected to small purchase acquisition instead of the policy to perform a formal procurement consisting of a request for proposal (RFP) that is publicly advertised. Suspension and Debarment For two vendors tested which were not procured by the Cooperative and had aggregate annual disbursements exceeding the federal suspension and debarment threshold of $25,000, the School Corporation did not perform suspension and debarment checks to confirm the vendors were not suspended or debarred before entering into the contract or disbursing federal funds. Identification as a repeat finding, if applicable: No. Recommendation: We recommend the School Corporation implement an internal control to monitor purchases within the Food Service Department with vendors that exceed the simplified acquisition dollar threshold, either individually or in annual aggregation, to ensure the School Corporation’s procurement policy is followed which includes advertising a formal request for proposal (RFP) and performing a full procurement process for purchases with vendors exceeding $150,000. We also recommend that the School Corporation implement an internal control process to monitor aggregate vendor disbursements in Fund 800, School Lunch, on annual basis and perform suspension and debarment checks for all vendors exceeding $25,000 in aggregate disbursements on an annual basis to ensure compliance with federal suspension and debarment regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2024-001
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): FY 22-23, FY 23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.318 states: “The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in 200.317 through 200.327.” and 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Cluster and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation’s management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement vendors utilized and not procured by the School Corporation’s purchasing cooperative. Effect: The failure to establish an effective internal control system could place the School Corporation at risk of noncompliance with the federal program and applicable federal/state procurement regulations. Not adhering to the School Corporation’s procurement policy designed to follow federal and state regulations, could result in the misuse and mismanagement of federal funds by conducting business with vendors not properly procured and verified to not be suspended or debarred. Questioned Costs: There we no questioned costs identified. Context: Procurement The School Corporation participates in the Region 8 Education Service Center Cooperative which procures vendors for many food purchases and other supplies on behalf of its members. During the audit period, the School Corporation contracted with vendors outside of the Cooperative. One vendor with aggregate annual purchases of $200,000 for fiscal year 2024 exceeded the simplified acquisition purchase threshold (greater than $150,000) but was subjected to small purchase acquisition instead of the policy to perform a formal procurement consisting of a request for proposal (RFP) that is publicly advertised. Suspension and Debarment For two vendors tested which were not procured by the Cooperative and had aggregate annual disbursements exceeding the federal suspension and debarment threshold of $25,000, the School Corporation did not perform suspension and debarment checks to confirm the vendors were not suspended or debarred before entering into the contract or disbursing federal funds. Identification as a repeat finding, if applicable: No. Recommendation: We recommend the School Corporation implement an internal control to monitor purchases within the Food Service Department with vendors that exceed the simplified acquisition dollar threshold, either individually or in annual aggregation, to ensure the School Corporation’s procurement policy is followed which includes advertising a formal request for proposal (RFP) and performing a full procurement process for purchases with vendors exceeding $150,000. We also recommend that the School Corporation implement an internal control process to monitor aggregate vendor disbursements in Fund 800, School Lunch, on annual basis and perform suspension and debarment checks for all vendors exceeding $25,000 in aggregate disbursements on an annual basis to ensure compliance with federal suspension and debarment regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2024-001
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): FY 22-23, FY 23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.318 states: “The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in 200.317 through 200.327.” and 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Cluster and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation’s management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement vendors utilized and not procured by the School Corporation’s purchasing cooperative. Effect: The failure to establish an effective internal control system could place the School Corporation at risk of noncompliance with the federal program and applicable federal/state procurement regulations. Not adhering to the School Corporation’s procurement policy designed to follow federal and state regulations, could result in the misuse and mismanagement of federal funds by conducting business with vendors not properly procured and verified to not be suspended or debarred. Questioned Costs: There we no questioned costs identified. Context: Procurement The School Corporation participates in the Region 8 Education Service Center Cooperative which procures vendors for many food purchases and other supplies on behalf of its members. During the audit period, the School Corporation contracted with vendors outside of the Cooperative. One vendor with aggregate annual purchases of $200,000 for fiscal year 2024 exceeded the simplified acquisition purchase threshold (greater than $150,000) but was subjected to small purchase acquisition instead of the policy to perform a formal procurement consisting of a request for proposal (RFP) that is publicly advertised. Suspension and Debarment For two vendors tested which were not procured by the Cooperative and had aggregate annual disbursements exceeding the federal suspension and debarment threshold of $25,000, the School Corporation did not perform suspension and debarment checks to confirm the vendors were not suspended or debarred before entering into the contract or disbursing federal funds. Identification as a repeat finding, if applicable: No. Recommendation: We recommend the School Corporation implement an internal control to monitor purchases within the Food Service Department with vendors that exceed the simplified acquisition dollar threshold, either individually or in annual aggregation, to ensure the School Corporation’s procurement policy is followed which includes advertising a formal request for proposal (RFP) and performing a full procurement process for purchases with vendors exceeding $150,000. We also recommend that the School Corporation implement an internal control process to monitor aggregate vendor disbursements in Fund 800, School Lunch, on annual basis and perform suspension and debarment checks for all vendors exceeding $25,000 in aggregate disbursements on an annual basis to ensure compliance with federal suspension and debarment regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2024-001
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): FY 22-23, FY 23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.318 states: “The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in 200.317 through 200.327.” and 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Cluster and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation’s management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement vendors utilized and not procured by the School Corporation’s purchasing cooperative. Effect: The failure to establish an effective internal control system could place the School Corporation at risk of noncompliance with the federal program and applicable federal/state procurement regulations. Not adhering to the School Corporation’s procurement policy designed to follow federal and state regulations, could result in the misuse and mismanagement of federal funds by conducting business with vendors not properly procured and verified to not be suspended or debarred. Questioned Costs: There we no questioned costs identified. Context: Procurement The School Corporation participates in the Region 8 Education Service Center Cooperative which procures vendors for many food purchases and other supplies on behalf of its members. During the audit period, the School Corporation contracted with vendors outside of the Cooperative. One vendor with aggregate annual purchases of $200,000 for fiscal year 2024 exceeded the simplified acquisition purchase threshold (greater than $150,000) but was subjected to small purchase acquisition instead of the policy to perform a formal procurement consisting of a request for proposal (RFP) that is publicly advertised. Suspension and Debarment For two vendors tested which were not procured by the Cooperative and had aggregate annual disbursements exceeding the federal suspension and debarment threshold of $25,000, the School Corporation did not perform suspension and debarment checks to confirm the vendors were not suspended or debarred before entering into the contract or disbursing federal funds. Identification as a repeat finding, if applicable: No. Recommendation: We recommend the School Corporation implement an internal control to monitor purchases within the Food Service Department with vendors that exceed the simplified acquisition dollar threshold, either individually or in annual aggregation, to ensure the School Corporation’s procurement policy is followed which includes advertising a formal request for proposal (RFP) and performing a full procurement process for purchases with vendors exceeding $150,000. We also recommend that the School Corporation implement an internal control process to monitor aggregate vendor disbursements in Fund 800, School Lunch, on annual basis and perform suspension and debarment checks for all vendors exceeding $25,000 in aggregate disbursements on an annual basis to ensure compliance with federal suspension and debarment regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.