Audit 348618

FINDING 2024-003 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Number and Year (or Other Identifying Number): FY23 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement; however, it was not effective. The School Corporation was approved for an indirect cost rate for fiscal year 2021-2022 in order to allocate indirect costs to the School Corporation's Cafeteria fund. However, the School Corporation did not charge these indirect costs within the appropriate time frame. Indirect costs for 2021-2022 in the amount of $26,793 was not charged to the Cafeteria fund until September 2022. Per USDA guidance, it is unallowable to bill the National School Food Service Account (NSFSA) for indirect costs that were paid from the general fund in prior years unless an agreement exists to show that the district had been "loaning" the NSFSA funds to cover the indirect costs in one or more prior years. The School Corporation did not have an interfund loan agreement in place. Therefore, the amounts were considered questioned costs. The lack of effective internal controls and noncompliance were isolated to the indirect costs noted above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." USDA Indirect Costs, Guidance for State Agencies & School Food Authorities states in part: ". . . It is unallowable to bill the NSFSA for indirect costs that were paid from the general fund in prior years unless an agreement exists to sow that the district had been 'loaning' the NSFSA funds to cover the indirect costs in one or more prior years. . . . There is no Federal requirement that prohibits an SFA from charging its internal fiscal policy regarding the recovery of indirect costs by those organizational units within the SFA that actually incur costs. Absent a documented 'inter-fund loan' as outlined above, however, an SFA may only change its policy to charge the NSFSA for indirect costs prospectively (that is going forward for the next school year.) It is unallowable to bill the NSFSA for indirect costs that were previously paid from the general fund unless an agreement exists to show that the district had been 'loaning' the NSFSA funds to cover the indirect costs in one or more prior years. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." Cause Management was not aware of the requirements before the transfer was made in September 2022. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected and resulted in the School Corporation charging indirect costs that were not allowable. Questioned Costs Known questioned costs of $26,793 were identified as noted in the Condition and Context. Recommendation Management of the School Corporation should develop written policies and procedures to ensure that indirect costs are properly determined and paid in the appropriate fiscal year. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY23, FY24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding for suspension and debarment from the immediately prior report. The prior audit finding number was 2022-005. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation did not verify that one restaurant supplies vendor with a contract over $25,000 for both fiscal years 2022-2023 and 2023-2024 was not excluded or disqualified from participation in federal award programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 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." Cause Management of the School Corporation was unaware that all vendors who received more than $25,000 during the school year had to be verified. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected. As a result, the School Corporation did not verify all necessary vendors were not suspended or debarred. Without following the required methods for suspension and debarment, the Cooperative could be paying vendors who are precluded from receiving federal funds. Questioned Costs There were no questioned costs identified. Recommendation Management of the School Corporation should develop written policies and procedures to ensure vendors are not suspended or debarred. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY23, FY24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding for suspension and debarment from the immediately prior report. The prior audit finding number was 2022-005. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation did not verify that one restaurant supplies vendor with a contract over $25,000 for both fiscal years 2022-2023 and 2023-2024 was not excluded or disqualified from participation in federal award programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 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." Cause Management of the School Corporation was unaware that all vendors who received more than $25,000 during the school year had to be verified. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected. As a result, the School Corporation did not verify all necessary vendors were not suspended or debarred. Without following the required methods for suspension and debarment, the Cooperative could be paying vendors who are precluded from receiving federal funds. Questioned Costs There were no questioned costs identified. Recommendation Management of the School Corporation should develop written policies and procedures to ensure vendors are not suspended or debarred. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-003 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Number and Year (or Other Identifying Number): FY23 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement; however, it was not effective. The School Corporation was approved for an indirect cost rate for fiscal year 2021-2022 in order to allocate indirect costs to the School Corporation's Cafeteria fund. However, the School Corporation did not charge these indirect costs within the appropriate time frame. Indirect costs for 2021-2022 in the amount of $26,793 was not charged to the Cafeteria fund until September 2022. Per USDA guidance, it is unallowable to bill the National School Food Service Account (NSFSA) for indirect costs that were paid from the general fund in prior years unless an agreement exists to show that the district had been "loaning" the NSFSA funds to cover the indirect costs in one or more prior years. The School Corporation did not have an interfund loan agreement in place. Therefore, the amounts were considered questioned costs. The lack of effective internal controls and noncompliance were isolated to the indirect costs noted above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." USDA Indirect Costs, Guidance for State Agencies & School Food Authorities states in part: ". . . It is unallowable to bill the NSFSA for indirect costs that were paid from the general fund in prior years unless an agreement exists to sow that the district had been 'loaning' the NSFSA funds to cover the indirect costs in one or more prior years. . . . There is no Federal requirement that prohibits an SFA from charging its internal fiscal policy regarding the recovery of indirect costs by those organizational units within the SFA that actually incur costs. Absent a documented 'inter-fund loan' as outlined above, however, an SFA may only change its policy to charge the NSFSA for indirect costs prospectively (that is going forward for the next school year.) It is unallowable to bill the NSFSA for indirect costs that were previously paid from the general fund unless an agreement exists to show that the district had been 'loaning' the NSFSA funds to cover the indirect costs in one or more prior years. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." Cause Management was not aware of the requirements before the transfer was made in September 2022. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected and resulted in the School Corporation charging indirect costs that were not allowable. Questioned Costs Known questioned costs of $26,793 were identified as noted in the Condition and Context. Recommendation Management of the School Corporation should develop written policies and procedures to ensure that indirect costs are properly determined and paid in the appropriate fiscal year. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY23, FY24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding for suspension and debarment from the immediately prior report. The prior audit finding number was 2022-005. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation did not verify that one restaurant supplies vendor with a contract over $25,000 for both fiscal years 2022-2023 and 2023-2024 was not excluded or disqualified from participation in federal award programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 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." Cause Management of the School Corporation was unaware that all vendors who received more than $25,000 during the school year had to be verified. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected. As a result, the School Corporation did not verify all necessary vendors were not suspended or debarred. Without following the required methods for suspension and debarment, the Cooperative could be paying vendors who are precluded from receiving federal funds. Questioned Costs There were no questioned costs identified. Recommendation Management of the School Corporation should develop written policies and procedures to ensure vendors are not suspended or debarred. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY23, FY24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding for suspension and debarment from the immediately prior report. The prior audit finding number was 2022-005. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation did not verify that one restaurant supplies vendor with a contract over $25,000 for both fiscal years 2022-2023 and 2023-2024 was not excluded or disqualified from participation in federal award programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 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." Cause Management of the School Corporation was unaware that all vendors who received more than $25,000 during the school year had to be verified. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected. As a result, the School Corporation did not verify all necessary vendors were not suspended or debarred. Without following the required methods for suspension and debarment, the Cooperative could be paying vendors who are precluded from receiving federal funds. Questioned Costs There were no questioned costs identified. Recommendation Management of the School Corporation should develop written policies and procedures to ensure vendors are not suspended or debarred. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-003 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Number and Year (or Other Identifying Number): FY23 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement; however, it was not effective. The School Corporation was approved for an indirect cost rate for fiscal year 2021-2022 in order to allocate indirect costs to the School Corporation's Cafeteria fund. However, the School Corporation did not charge these indirect costs within the appropriate time frame. Indirect costs for 2021-2022 in the amount of $26,793 was not charged to the Cafeteria fund until September 2022. Per USDA guidance, it is unallowable to bill the National School Food Service Account (NSFSA) for indirect costs that were paid from the general fund in prior years unless an agreement exists to show that the district had been "loaning" the NSFSA funds to cover the indirect costs in one or more prior years. The School Corporation did not have an interfund loan agreement in place. Therefore, the amounts were considered questioned costs. The lack of effective internal controls and noncompliance were isolated to the indirect costs noted above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." USDA Indirect Costs, Guidance for State Agencies & School Food Authorities states in part: ". . . It is unallowable to bill the NSFSA for indirect costs that were paid from the general fund in prior years unless an agreement exists to sow that the district had been 'loaning' the NSFSA funds to cover the indirect costs in one or more prior years. . . . There is no Federal requirement that prohibits an SFA from charging its internal fiscal policy regarding the recovery of indirect costs by those organizational units within the SFA that actually incur costs. Absent a documented 'inter-fund loan' as outlined above, however, an SFA may only change its policy to charge the NSFSA for indirect costs prospectively (that is going forward for the next school year.) It is unallowable to bill the NSFSA for indirect costs that were previously paid from the general fund unless an agreement exists to show that the district had been 'loaning' the NSFSA funds to cover the indirect costs in one or more prior years. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." Cause Management was not aware of the requirements before the transfer was made in September 2022. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected and resulted in the School Corporation charging indirect costs that were not allowable. Questioned Costs Known questioned costs of $26,793 were identified as noted in the Condition and Context. Recommendation Management of the School Corporation should develop written policies and procedures to ensure that indirect costs are properly determined and paid in the appropriate fiscal year. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY23, FY24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding for suspension and debarment from the immediately prior report. The prior audit finding number was 2022-005. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation did not verify that one restaurant supplies vendor with a contract over $25,000 for both fiscal years 2022-2023 and 2023-2024 was not excluded or disqualified from participation in federal award programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 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." Cause Management of the School Corporation was unaware that all vendors who received more than $25,000 during the school year had to be verified. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected. As a result, the School Corporation did not verify all necessary vendors were not suspended or debarred. Without following the required methods for suspension and debarment, the Cooperative could be paying vendors who are precluded from receiving federal funds. Questioned Costs There were no questioned costs identified. Recommendation Management of the School Corporation should develop written policies and procedures to ensure vendors are not suspended or debarred. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY23, FY24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding for suspension and debarment from the immediately prior report. The prior audit finding number was 2022-005. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation did not verify that one restaurant supplies vendor with a contract over $25,000 for both fiscal years 2022-2023 and 2023-2024 was not excluded or disqualified from participation in federal award programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 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." Cause Management of the School Corporation was unaware that all vendors who received more than $25,000 during the school year had to be verified. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected. As a result, the School Corporation did not verify all necessary vendors were not suspended or debarred. Without following the required methods for suspension and debarment, the Cooperative could be paying vendors who are precluded from receiving federal funds. Questioned Costs There were no questioned costs identified. Recommendation Management of the School Corporation should develop written policies and procedures to ensure vendors are not suspended or debarred. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles and Activities Allowed or Unallowed Federal Agency: Indiana Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Allowable Costs/Cost Principles, Activities Allowed or Unallowed Audit Findings: Material Weakness, Modified Opinion Condition and Context The COVID-19 - Education Stabilization Fund (ESF), established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act and further funded by the Coronavirus Response and Relief Supplemental Appropriations Act (CRSSA) and the American Rescue Plan (ARP) Act, was for the purpose of preventing, preparing for, or responding to the novel coronavirus. A sample of 40 vendor and payroll disbursements that were charged to the ESF grant for which reimbursement was received during the audit period was selected for testing to verify the expenditures were in conformance with the applicable allowable cost principles. Of the 40 disbursements tested, 4 payroll disbursements for accelerated learning were approved, but the School Corporation could not provide documentation to show where the governing board approved their rate of pay. In addition, there was a transfer from the ESSER II - Cares grant fund to the Education fund for $117,177 to reimburse that fund for expenses on June 20, 2024. The School Corporation was unable to provide documentation for the expenses that were reimbursed to ensure they were for allowable activities and allowable costs. The ineffective internal controls were a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." Cause Management had not developed a system of internal controls that would have ensured compliance with the Allowable Costs/Cost Principles and the Activities Allowed or Unallowed compliance requirements. Management was not aware that they should have only been reimbursed for expenditures made out of the ESF funds or should have moved the expenditures and retained proper documentation to support what expenditures tied to what was reimbursed. It was noted that the accelerated learning rate of pay was discussed at a School Board meeting, but the approved wage rates were not documented in the School Board minutes or on any sort of salary schedule approved by the School Board members. Effect The failure to design and implement an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Cost/Cost Principles and the Activities Allowed or Unallowed compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs There was a total of $173,841 of questioned costs as referenced under the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure only allowable activities and allowable costs are charged to grants funds and to ensure grant money is only requested for reimbursement for monies directly related to the grant program. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Indiana Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-010. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Even though the reports were reviewed by someone other than the preparer, the School Corporation was not able to provide financial information that was used to determine amounts used in the reports. The School Corporation completed and submitted four annual Data Collection reports (Reports) for the Elementary and Secondary School Emergency Relief (ESSER) grants. For all four of the Reports, the School Corporation was unable to provide financial information to support the amounts in the Reports; therefore, the Indiana State Board of Accounts could not determine the accuracy of the Reports. Additionally, eight of eight key line items selected for testing could not be verified to the financial records. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 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." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause According to the School Corporation, these issues were due to the reporting differences of how the annual expenditure report categories are different than the annual Data Collection reports. The School Corporation indicated that it had to go employee by employee to properly place them under the correct category using the reimbursement requests but did not retain that documentation of how it came to the numbers. Effect The failure to design and implement an effective internal control system enabled noncompliance to go undetected with the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure reports submitted are accurate and have supporting documentation. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles and Activities Allowed or Unallowed Federal Agency: Indiana Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Allowable Costs/Cost Principles, Activities Allowed or Unallowed Audit Findings: Material Weakness, Modified Opinion Condition and Context The COVID-19 - Education Stabilization Fund (ESF), established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act and further funded by the Coronavirus Response and Relief Supplemental Appropriations Act (CRSSA) and the American Rescue Plan (ARP) Act, was for the purpose of preventing, preparing for, or responding to the novel coronavirus. A sample of 40 vendor and payroll disbursements that were charged to the ESF grant for which reimbursement was received during the audit period was selected for testing to verify the expenditures were in conformance with the applicable allowable cost principles. Of the 40 disbursements tested, 4 payroll disbursements for accelerated learning were approved, but the School Corporation could not provide documentation to show where the governing board approved their rate of pay. In addition, there was a transfer from the ESSER II - Cares grant fund to the Education fund for $117,177 to reimburse that fund for expenses on June 20, 2024. The School Corporation was unable to provide documentation for the expenses that were reimbursed to ensure they were for allowable activities and allowable costs. The ineffective internal controls were a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." Cause Management had not developed a system of internal controls that would have ensured compliance with the Allowable Costs/Cost Principles and the Activities Allowed or Unallowed compliance requirements. Management was not aware that they should have only been reimbursed for expenditures made out of the ESF funds or should have moved the expenditures and retained proper documentation to support what expenditures tied to what was reimbursed. It was noted that the accelerated learning rate of pay was discussed at a School Board meeting, but the approved wage rates were not documented in the School Board minutes or on any sort of salary schedule approved by the School Board members. Effect The failure to design and implement an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Cost/Cost Principles and the Activities Allowed or Unallowed compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs There was a total of $173,841 of questioned costs as referenced under the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure only allowable activities and allowable costs are charged to grants funds and to ensure grant money is only requested for reimbursement for monies directly related to the grant program. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Indiana Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-010. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Even though the reports were reviewed by someone other than the preparer, the School Corporation was not able to provide financial information that was used to determine amounts used in the reports. The School Corporation completed and submitted four annual Data Collection reports (Reports) for the Elementary and Secondary School Emergency Relief (ESSER) grants. For all four of the Reports, the School Corporation was unable to provide financial information to support the amounts in the Reports; therefore, the Indiana State Board of Accounts could not determine the accuracy of the Reports. Additionally, eight of eight key line items selected for testing could not be verified to the financial records. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 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." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause According to the School Corporation, these issues were due to the reporting differences of how the annual expenditure report categories are different than the annual Data Collection reports. The School Corporation indicated that it had to go employee by employee to properly place them under the correct category using the reimbursement requests but did not retain that documentation of how it came to the numbers. Effect The failure to design and implement an effective internal control system enabled noncompliance to go undetected with the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure reports submitted are accurate and have supporting documentation. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles and Activities Allowed or Unallowed Federal Agency: Indiana Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Allowable Costs/Cost Principles, Activities Allowed or Unallowed Audit Findings: Material Weakness, Modified Opinion Condition and Context The COVID-19 - Education Stabilization Fund (ESF), established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act and further funded by the Coronavirus Response and Relief Supplemental Appropriations Act (CRSSA) and the American Rescue Plan (ARP) Act, was for the purpose of preventing, preparing for, or responding to the novel coronavirus. A sample of 40 vendor and payroll disbursements that were charged to the ESF grant for which reimbursement was received during the audit period was selected for testing to verify the expenditures were in conformance with the applicable allowable cost principles. Of the 40 disbursements tested, 4 payroll disbursements for accelerated learning were approved, but the School Corporation could not provide documentation to show where the governing board approved their rate of pay. In addition, there was a transfer from the ESSER II - Cares grant fund to the Education fund for $117,177 to reimburse that fund for expenses on June 20, 2024. The School Corporation was unable to provide documentation for the expenses that were reimbursed to ensure they were for allowable activities and allowable costs. The ineffective internal controls were a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." Cause Management had not developed a system of internal controls that would have ensured compliance with the Allowable Costs/Cost Principles and the Activities Allowed or Unallowed compliance requirements. Management was not aware that they should have only been reimbursed for expenditures made out of the ESF funds or should have moved the expenditures and retained proper documentation to support what expenditures tied to what was reimbursed. It was noted that the accelerated learning rate of pay was discussed at a School Board meeting, but the approved wage rates were not documented in the School Board minutes or on any sort of salary schedule approved by the School Board members. Effect The failure to design and implement an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Cost/Cost Principles and the Activities Allowed or Unallowed compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs There was a total of $173,841 of questioned costs as referenced under the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure only allowable activities and allowable costs are charged to grants funds and to ensure grant money is only requested for reimbursement for monies directly related to the grant program. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Indiana Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-010. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Even though the reports were reviewed by someone other than the preparer, the School Corporation was not able to provide financial information that was used to determine amounts used in the reports. The School Corporation completed and submitted four annual Data Collection reports (Reports) for the Elementary and Secondary School Emergency Relief (ESSER) grants. For all four of the Reports, the School Corporation was unable to provide financial information to support the amounts in the Reports; therefore, the Indiana State Board of Accounts could not determine the accuracy of the Reports. Additionally, eight of eight key line items selected for testing could not be verified to the financial records. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 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." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause According to the School Corporation, these issues were due to the reporting differences of how the annual expenditure report categories are different than the annual Data Collection reports. The School Corporation indicated that it had to go employee by employee to properly place them under the correct category using the reimbursement requests but did not retain that documentation of how it came to the numbers. Effect The failure to design and implement an effective internal control system enabled noncompliance to go undetected with the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure reports submitted are accurate and have supporting documentation. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles and Activities Allowed or Unallowed Federal Agency: Indiana Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Allowable Costs/Cost Principles, Activities Allowed or Unallowed Audit Findings: Material Weakness, Modified Opinion Condition and Context The COVID-19 - Education Stabilization Fund (ESF), established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act and further funded by the Coronavirus Response and Relief Supplemental Appropriations Act (CRSSA) and the American Rescue Plan (ARP) Act, was for the purpose of preventing, preparing for, or responding to the novel coronavirus. A sample of 40 vendor and payroll disbursements that were charged to the ESF grant for which reimbursement was received during the audit period was selected for testing to verify the expenditures were in conformance with the applicable allowable cost principles. Of the 40 disbursements tested, 4 payroll disbursements for accelerated learning were approved, but the School Corporation could not provide documentation to show where the governing board approved their rate of pay. In addition, there was a transfer from the ESSER II - Cares grant fund to the Education fund for $117,177 to reimburse that fund for expenses on June 20, 2024. The School Corporation was unable to provide documentation for the expenses that were reimbursed to ensure they were for allowable activities and allowable costs. The ineffective internal controls were a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." Cause Management had not developed a system of internal controls that would have ensured compliance with the Allowable Costs/Cost Principles and the Activities Allowed or Unallowed compliance requirements. Management was not aware that they should have only been reimbursed for expenditures made out of the ESF funds or should have moved the expenditures and retained proper documentation to support what expenditures tied to what was reimbursed. It was noted that the accelerated learning rate of pay was discussed at a School Board meeting, but the approved wage rates were not documented in the School Board minutes or on any sort of salary schedule approved by the School Board members. Effect The failure to design and implement an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Cost/Cost Principles and the Activities Allowed or Unallowed compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs There was a total of $173,841 of questioned costs as referenced under the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure only allowable activities and allowable costs are charged to grants funds and to ensure grant money is only requested for reimbursement for monies directly related to the grant program. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Indiana Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-010. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Even though the reports were reviewed by someone other than the preparer, the School Corporation was not able to provide financial information that was used to determine amounts used in the reports. The School Corporation completed and submitted four annual Data Collection reports (Reports) for the Elementary and Secondary School Emergency Relief (ESSER) grants. For all four of the Reports, the School Corporation was unable to provide financial information to support the amounts in the Reports; therefore, the Indiana State Board of Accounts could not determine the accuracy of the Reports. Additionally, eight of eight key line items selected for testing could not be verified to the financial records. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 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." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause According to the School Corporation, these issues were due to the reporting differences of how the annual expenditure report categories are different than the annual Data Collection reports. The School Corporation indicated that it had to go employee by employee to properly place them under the correct category using the reimbursement requests but did not retain that documentation of how it came to the numbers. Effect The failure to design and implement an effective internal control system enabled noncompliance to go undetected with the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure reports submitted are accurate and have supporting documentation. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-003 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Number and Year (or Other Identifying Number): FY23 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement; however, it was not effective. The School Corporation was approved for an indirect cost rate for fiscal year 2021-2022 in order to allocate indirect costs to the School Corporation's Cafeteria fund. However, the School Corporation did not charge these indirect costs within the appropriate time frame. Indirect costs for 2021-2022 in the amount of $26,793 was not charged to the Cafeteria fund until September 2022. Per USDA guidance, it is unallowable to bill the National School Food Service Account (NSFSA) for indirect costs that were paid from the general fund in prior years unless an agreement exists to show that the district had been "loaning" the NSFSA funds to cover the indirect costs in one or more prior years. The School Corporation did not have an interfund loan agreement in place. Therefore, the amounts were considered questioned costs. The lack of effective internal controls and noncompliance were isolated to the indirect costs noted above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." USDA Indirect Costs, Guidance for State Agencies & School Food Authorities states in part: ". . . It is unallowable to bill the NSFSA for indirect costs that were paid from the general fund in prior years unless an agreement exists to sow that the district had been 'loaning' the NSFSA funds to cover the indirect costs in one or more prior years. . . . There is no Federal requirement that prohibits an SFA from charging its internal fiscal policy regarding the recovery of indirect costs by those organizational units within the SFA that actually incur costs. Absent a documented 'inter-fund loan' as outlined above, however, an SFA may only change its policy to charge the NSFSA for indirect costs prospectively (that is going forward for the next school year.) It is unallowable to bill the NSFSA for indirect costs that were previously paid from the general fund unless an agreement exists to show that the district had been 'loaning' the NSFSA funds to cover the indirect costs in one or more prior years. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." Cause Management was not aware of the requirements before the transfer was made in September 2022. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected and resulted in the School Corporation charging indirect costs that were not allowable. Questioned Costs Known questioned costs of $26,793 were identified as noted in the Condition and Context. Recommendation Management of the School Corporation should develop written policies and procedures to ensure that indirect costs are properly determined and paid in the appropriate fiscal year. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY23, FY24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding for suspension and debarment from the immediately prior report. The prior audit finding number was 2022-005. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation did not verify that one restaurant supplies vendor with a contract over $25,000 for both fiscal years 2022-2023 and 2023-2024 was not excluded or disqualified from participation in federal award programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 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." Cause Management of the School Corporation was unaware that all vendors who received more than $25,000 during the school year had to be verified. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected. As a result, the School Corporation did not verify all necessary vendors were not suspended or debarred. Without following the required methods for suspension and debarment, the Cooperative could be paying vendors who are precluded from receiving federal funds. Questioned Costs There were no questioned costs identified. Recommendation Management of the School Corporation should develop written policies and procedures to ensure vendors are not suspended or debarred. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY23, FY24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding for suspension and debarment from the immediately prior report. The prior audit finding number was 2022-005. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation did not verify that one restaurant supplies vendor with a contract over $25,000 for both fiscal years 2022-2023 and 2023-2024 was not excluded or disqualified from participation in federal award programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 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." Cause Management of the School Corporation was unaware that all vendors who received more than $25,000 during the school year had to be verified. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected. As a result, the School Corporation did not verify all necessary vendors were not suspended or debarred. Without following the required methods for suspension and debarment, the Cooperative could be paying vendors who are precluded from receiving federal funds. Questioned Costs There were no questioned costs identified. Recommendation Management of the School Corporation should develop written policies and procedures to ensure vendors are not suspended or debarred. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-003 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Number and Year (or Other Identifying Number): FY23 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement; however, it was not effective. The School Corporation was approved for an indirect cost rate for fiscal year 2021-2022 in order to allocate indirect costs to the School Corporation's Cafeteria fund. However, the School Corporation did not charge these indirect costs within the appropriate time frame. Indirect costs for 2021-2022 in the amount of $26,793 was not charged to the Cafeteria fund until September 2022. Per USDA guidance, it is unallowable to bill the National School Food Service Account (NSFSA) for indirect costs that were paid from the general fund in prior years unless an agreement exists to show that the district had been "loaning" the NSFSA funds to cover the indirect costs in one or more prior years. The School Corporation did not have an interfund loan agreement in place. Therefore, the amounts were considered questioned costs. The lack of effective internal controls and noncompliance were isolated to the indirect costs noted above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." USDA Indirect Costs, Guidance for State Agencies & School Food Authorities states in part: ". . . It is unallowable to bill the NSFSA for indirect costs that were paid from the general fund in prior years unless an agreement exists to sow that the district had been 'loaning' the NSFSA funds to cover the indirect costs in one or more prior years. . . . There is no Federal requirement that prohibits an SFA from charging its internal fiscal policy regarding the recovery of indirect costs by those organizational units within the SFA that actually incur costs. Absent a documented 'inter-fund loan' as outlined above, however, an SFA may only change its policy to charge the NSFSA for indirect costs prospectively (that is going forward for the next school year.) It is unallowable to bill the NSFSA for indirect costs that were previously paid from the general fund unless an agreement exists to show that the district had been 'loaning' the NSFSA funds to cover the indirect costs in one or more prior years. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." Cause Management was not aware of the requirements before the transfer was made in September 2022. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected and resulted in the School Corporation charging indirect costs that were not allowable. Questioned Costs Known questioned costs of $26,793 were identified as noted in the Condition and Context. Recommendation Management of the School Corporation should develop written policies and procedures to ensure that indirect costs are properly determined and paid in the appropriate fiscal year. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY23, FY24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding for suspension and debarment from the immediately prior report. The prior audit finding number was 2022-005. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation did not verify that one restaurant supplies vendor with a contract over $25,000 for both fiscal years 2022-2023 and 2023-2024 was not excluded or disqualified from participation in federal award programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 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." Cause Management of the School Corporation was unaware that all vendors who received more than $25,000 during the school year had to be verified. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected. As a result, the School Corporation did not verify all necessary vendors were not suspended or debarred. Without following the required methods for suspension and debarment, the Cooperative could be paying vendors who are precluded from receiving federal funds. Questioned Costs There were no questioned costs identified. Recommendation Management of the School Corporation should develop written policies and procedures to ensure vendors are not suspended or debarred. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY23, FY24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding for suspension and debarment from the immediately prior report. The prior audit finding number was 2022-005. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation did not verify that one restaurant supplies vendor with a contract over $25,000 for both fiscal years 2022-2023 and 2023-2024 was not excluded or disqualified from participation in federal award programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 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." Cause Management of the School Corporation was unaware that all vendors who received more than $25,000 during the school year had to be verified. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected. As a result, the School Corporation did not verify all necessary vendors were not suspended or debarred. Without following the required methods for suspension and debarment, the Cooperative could be paying vendors who are precluded from receiving federal funds. Questioned Costs There were no questioned costs identified. Recommendation Management of the School Corporation should develop written policies and procedures to ensure vendors are not suspended or debarred. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-003 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Number and Year (or Other Identifying Number): FY23 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement; however, it was not effective. The School Corporation was approved for an indirect cost rate for fiscal year 2021-2022 in order to allocate indirect costs to the School Corporation's Cafeteria fund. However, the School Corporation did not charge these indirect costs within the appropriate time frame. Indirect costs for 2021-2022 in the amount of $26,793 was not charged to the Cafeteria fund until September 2022. Per USDA guidance, it is unallowable to bill the National School Food Service Account (NSFSA) for indirect costs that were paid from the general fund in prior years unless an agreement exists to show that the district had been "loaning" the NSFSA funds to cover the indirect costs in one or more prior years. The School Corporation did not have an interfund loan agreement in place. Therefore, the amounts were considered questioned costs. The lack of effective internal controls and noncompliance were isolated to the indirect costs noted above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." USDA Indirect Costs, Guidance for State Agencies & School Food Authorities states in part: ". . . It is unallowable to bill the NSFSA for indirect costs that were paid from the general fund in prior years unless an agreement exists to sow that the district had been 'loaning' the NSFSA funds to cover the indirect costs in one or more prior years. . . . There is no Federal requirement that prohibits an SFA from charging its internal fiscal policy regarding the recovery of indirect costs by those organizational units within the SFA that actually incur costs. Absent a documented 'inter-fund loan' as outlined above, however, an SFA may only change its policy to charge the NSFSA for indirect costs prospectively (that is going forward for the next school year.) It is unallowable to bill the NSFSA for indirect costs that were previously paid from the general fund unless an agreement exists to show that the district had been 'loaning' the NSFSA funds to cover the indirect costs in one or more prior years. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." Cause Management was not aware of the requirements before the transfer was made in September 2022. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected and resulted in the School Corporation charging indirect costs that were not allowable. Questioned Costs Known questioned costs of $26,793 were identified as noted in the Condition and Context. Recommendation Management of the School Corporation should develop written policies and procedures to ensure that indirect costs are properly determined and paid in the appropriate fiscal year. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY23, FY24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding for suspension and debarment from the immediately prior report. The prior audit finding number was 2022-005. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation did not verify that one restaurant supplies vendor with a contract over $25,000 for both fiscal years 2022-2023 and 2023-2024 was not excluded or disqualified from participation in federal award programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 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." Cause Management of the School Corporation was unaware that all vendors who received more than $25,000 during the school year had to be verified. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected. As a result, the School Corporation did not verify all necessary vendors were not suspended or debarred. Without following the required methods for suspension and debarment, the Cooperative could be paying vendors who are precluded from receiving federal funds. Questioned Costs There were no questioned costs identified. Recommendation Management of the School Corporation should develop written policies and procedures to ensure vendors are not suspended or debarred. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY23, FY24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding for suspension and debarment from the immediately prior report. The prior audit finding number was 2022-005. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The School Corporation did not verify that one restaurant supplies vendor with a contract over $25,000 for both fiscal years 2022-2023 and 2023-2024 was not excluded or disqualified from participation in federal award programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 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." Cause Management of the School Corporation was unaware that all vendors who received more than $25,000 during the school year had to be verified. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected. As a result, the School Corporation did not verify all necessary vendors were not suspended or debarred. Without following the required methods for suspension and debarment, the Cooperative could be paying vendors who are precluded from receiving federal funds. Questioned Costs There were no questioned costs identified. Recommendation Management of the School Corporation should develop written policies and procedures to ensure vendors are not suspended or debarred. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles and Activities Allowed or Unallowed Federal Agency: Indiana Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Allowable Costs/Cost Principles, Activities Allowed or Unallowed Audit Findings: Material Weakness, Modified Opinion Condition and Context The COVID-19 - Education Stabilization Fund (ESF), established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act and further funded by the Coronavirus Response and Relief Supplemental Appropriations Act (CRSSA) and the American Rescue Plan (ARP) Act, was for the purpose of preventing, preparing for, or responding to the novel coronavirus. A sample of 40 vendor and payroll disbursements that were charged to the ESF grant for which reimbursement was received during the audit period was selected for testing to verify the expenditures were in conformance with the applicable allowable cost principles. Of the 40 disbursements tested, 4 payroll disbursements for accelerated learning were approved, but the School Corporation could not provide documentation to show where the governing board approved their rate of pay. In addition, there was a transfer from the ESSER II - Cares grant fund to the Education fund for $117,177 to reimburse that fund for expenses on June 20, 2024. The School Corporation was unable to provide documentation for the expenses that were reimbursed to ensure they were for allowable activities and allowable costs. The ineffective internal controls were a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." Cause Management had not developed a system of internal controls that would have ensured compliance with the Allowable Costs/Cost Principles and the Activities Allowed or Unallowed compliance requirements. Management was not aware that they should have only been reimbursed for expenditures made out of the ESF funds or should have moved the expenditures and retained proper documentation to support what expenditures tied to what was reimbursed. It was noted that the accelerated learning rate of pay was discussed at a School Board meeting, but the approved wage rates were not documented in the School Board minutes or on any sort of salary schedule approved by the School Board members. Effect The failure to design and implement an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Cost/Cost Principles and the Activities Allowed or Unallowed compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs There was a total of $173,841 of questioned costs as referenced under the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure only allowable activities and allowable costs are charged to grants funds and to ensure grant money is only requested for reimbursement for monies directly related to the grant program. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Indiana Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-010. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Even though the reports were reviewed by someone other than the preparer, the School Corporation was not able to provide financial information that was used to determine amounts used in the reports. The School Corporation completed and submitted four annual Data Collection reports (Reports) for the Elementary and Secondary School Emergency Relief (ESSER) grants. For all four of the Reports, the School Corporation was unable to provide financial information to support the amounts in the Reports; therefore, the Indiana State Board of Accounts could not determine the accuracy of the Reports. Additionally, eight of eight key line items selected for testing could not be verified to the financial records. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 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." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause According to the School Corporation, these issues were due to the reporting differences of how the annual expenditure report categories are different than the annual Data Collection reports. The School Corporation indicated that it had to go employee by employee to properly place them under the correct category using the reimbursement requests but did not retain that documentation of how it came to the numbers. Effect The failure to design and implement an effective internal control system enabled noncompliance to go undetected with the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure reports submitted are accurate and have supporting documentation. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles and Activities Allowed or Unallowed Federal Agency: Indiana Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Allowable Costs/Cost Principles, Activities Allowed or Unallowed Audit Findings: Material Weakness, Modified Opinion Condition and Context The COVID-19 - Education Stabilization Fund (ESF), established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act and further funded by the Coronavirus Response and Relief Supplemental Appropriations Act (CRSSA) and the American Rescue Plan (ARP) Act, was for the purpose of preventing, preparing for, or responding to the novel coronavirus. A sample of 40 vendor and payroll disbursements that were charged to the ESF grant for which reimbursement was received during the audit period was selected for testing to verify the expenditures were in conformance with the applicable allowable cost principles. Of the 40 disbursements tested, 4 payroll disbursements for accelerated learning were approved, but the School Corporation could not provide documentation to show where the governing board approved their rate of pay. In addition, there was a transfer from the ESSER II - Cares grant fund to the Education fund for $117,177 to reimburse that fund for expenses on June 20, 2024. The School Corporation was unable to provide documentation for the expenses that were reimbursed to ensure they were for allowable activities and allowable costs. The ineffective internal controls were a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." Cause Management had not developed a system of internal controls that would have ensured compliance with the Allowable Costs/Cost Principles and the Activities Allowed or Unallowed compliance requirements. Management was not aware that they should have only been reimbursed for expenditures made out of the ESF funds or should have moved the expenditures and retained proper documentation to support what expenditures tied to what was reimbursed. It was noted that the accelerated learning rate of pay was discussed at a School Board meeting, but the approved wage rates were not documented in the School Board minutes or on any sort of salary schedule approved by the School Board members. Effect The failure to design and implement an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Cost/Cost Principles and the Activities Allowed or Unallowed compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs There was a total of $173,841 of questioned costs as referenced under the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure only allowable activities and allowable costs are charged to grants funds and to ensure grant money is only requested for reimbursement for monies directly related to the grant program. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Indiana Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-010. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Even though the reports were reviewed by someone other than the preparer, the School Corporation was not able to provide financial information that was used to determine amounts used in the reports. The School Corporation completed and submitted four annual Data Collection reports (Reports) for the Elementary and Secondary School Emergency Relief (ESSER) grants. For all four of the Reports, the School Corporation was unable to provide financial information to support the amounts in the Reports; therefore, the Indiana State Board of Accounts could not determine the accuracy of the Reports. Additionally, eight of eight key line items selected for testing could not be verified to the financial records. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 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." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause According to the School Corporation, these issues were due to the reporting differences of how the annual expenditure report categories are different than the annual Data Collection reports. The School Corporation indicated that it had to go employee by employee to properly place them under the correct category using the reimbursement requests but did not retain that documentation of how it came to the numbers. Effect The failure to design and implement an effective internal control system enabled noncompliance to go undetected with the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure reports submitted are accurate and have supporting documentation. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles and Activities Allowed or Unallowed Federal Agency: Indiana Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Allowable Costs/Cost Principles, Activities Allowed or Unallowed Audit Findings: Material Weakness, Modified Opinion Condition and Context The COVID-19 - Education Stabilization Fund (ESF), established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act and further funded by the Coronavirus Response and Relief Supplemental Appropriations Act (CRSSA) and the American Rescue Plan (ARP) Act, was for the purpose of preventing, preparing for, or responding to the novel coronavirus. A sample of 40 vendor and payroll disbursements that were charged to the ESF grant for which reimbursement was received during the audit period was selected for testing to verify the expenditures were in conformance with the applicable allowable cost principles. Of the 40 disbursements tested, 4 payroll disbursements for accelerated learning were approved, but the School Corporation could not provide documentation to show where the governing board approved their rate of pay. In addition, there was a transfer from the ESSER II - Cares grant fund to the Education fund for $117,177 to reimburse that fund for expenses on June 20, 2024. The School Corporation was unable to provide documentation for the expenses that were reimbursed to ensure they were for allowable activities and allowable costs. The ineffective internal controls were a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." Cause Management had not developed a system of internal controls that would have ensured compliance with the Allowable Costs/Cost Principles and the Activities Allowed or Unallowed compliance requirements. Management was not aware that they should have only been reimbursed for expenditures made out of the ESF funds or should have moved the expenditures and retained proper documentation to support what expenditures tied to what was reimbursed. It was noted that the accelerated learning rate of pay was discussed at a School Board meeting, but the approved wage rates were not documented in the School Board minutes or on any sort of salary schedule approved by the School Board members. Effect The failure to design and implement an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Cost/Cost Principles and the Activities Allowed or Unallowed compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs There was a total of $173,841 of questioned costs as referenced under the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure only allowable activities and allowable costs are charged to grants funds and to ensure grant money is only requested for reimbursement for monies directly related to the grant program. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Indiana Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-010. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Even though the reports were reviewed by someone other than the preparer, the School Corporation was not able to provide financial information that was used to determine amounts used in the reports. The School Corporation completed and submitted four annual Data Collection reports (Reports) for the Elementary and Secondary School Emergency Relief (ESSER) grants. For all four of the Reports, the School Corporation was unable to provide financial information to support the amounts in the Reports; therefore, the Indiana State Board of Accounts could not determine the accuracy of the Reports. Additionally, eight of eight key line items selected for testing could not be verified to the financial records. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 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." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause According to the School Corporation, these issues were due to the reporting differences of how the annual expenditure report categories are different than the annual Data Collection reports. The School Corporation indicated that it had to go employee by employee to properly place them under the correct category using the reimbursement requests but did not retain that documentation of how it came to the numbers. Effect The failure to design and implement an effective internal control system enabled noncompliance to go undetected with the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure reports submitted are accurate and have supporting documentation. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles and Activities Allowed or Unallowed Federal Agency: Indiana Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Allowable Costs/Cost Principles, Activities Allowed or Unallowed Audit Findings: Material Weakness, Modified Opinion Condition and Context The COVID-19 - Education Stabilization Fund (ESF), established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act and further funded by the Coronavirus Response and Relief Supplemental Appropriations Act (CRSSA) and the American Rescue Plan (ARP) Act, was for the purpose of preventing, preparing for, or responding to the novel coronavirus. A sample of 40 vendor and payroll disbursements that were charged to the ESF grant for which reimbursement was received during the audit period was selected for testing to verify the expenditures were in conformance with the applicable allowable cost principles. Of the 40 disbursements tested, 4 payroll disbursements for accelerated learning were approved, but the School Corporation could not provide documentation to show where the governing board approved their rate of pay. In addition, there was a transfer from the ESSER II - Cares grant fund to the Education fund for $117,177 to reimburse that fund for expenses on June 20, 2024. The School Corporation was unable to provide documentation for the expenses that were reimbursed to ensure they were for allowable activities and allowable costs. The ineffective internal controls were a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." Cause Management had not developed a system of internal controls that would have ensured compliance with the Allowable Costs/Cost Principles and the Activities Allowed or Unallowed compliance requirements. Management was not aware that they should have only been reimbursed for expenditures made out of the ESF funds or should have moved the expenditures and retained proper documentation to support what expenditures tied to what was reimbursed. It was noted that the accelerated learning rate of pay was discussed at a School Board meeting, but the approved wage rates were not documented in the School Board minutes or on any sort of salary schedule approved by the School Board members. Effect The failure to design and implement an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Cost/Cost Principles and the Activities Allowed or Unallowed compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs There was a total of $173,841 of questioned costs as referenced under the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure only allowable activities and allowable costs are charged to grants funds and to ensure grant money is only requested for reimbursement for monies directly related to the grant program. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2024-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Indiana Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-010. Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Even though the reports were reviewed by someone other than the preparer, the School Corporation was not able to provide financial information that was used to determine amounts used in the reports. The School Corporation completed and submitted four annual Data Collection reports (Reports) for the Elementary and Secondary School Emergency Relief (ESSER) grants. For all four of the Reports, the School Corporation was unable to provide financial information to support the amounts in the Reports; therefore, the Indiana State Board of Accounts could not determine the accuracy of the Reports. Additionally, eight of eight key line items selected for testing could not be verified to the financial records. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 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." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause According to the School Corporation, these issues were due to the reporting differences of how the annual expenditure report categories are different than the annual Data Collection reports. The School Corporation indicated that it had to go employee by employee to properly place them under the correct category using the reimbursement requests but did not retain that documentation of how it came to the numbers. Effect The failure to design and implement an effective internal control system enabled noncompliance to go undetected with the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls to ensure reports submitted are accurate and have supporting documentation. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.