FAC Explorer

Audit 349344

FY End
2024-06-30
Total Expended
$16.01M
Findings
6
Programs
10
Organization: The Phalen Leadership Academy - Indiana, Inc. (MA)
Year: 2024 Accepted: 2025-03-27
Auditor: Cliftonlarsonallen (cla)

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
538319 2024-001 Material Weakness - I
538320 2024-002 Material Weakness Yes N
538321 2024-002 Material Weakness Yes N
1114761 2024-001 Material Weakness - I
1114762 2024-002 Material Weakness Yes N
1114763 2024-002 Material Weakness Yes N

Programs

ALN Program Spent Major Findings
84.425 Education Stabilization Fund $8.59M Yes 1
84.010 Title I Grants to Local Educational Agencies $2.96M - 0
84.282 Charter Schools $1.44M Yes 1
10.555 National School Lunch Program $1.44M - 0
10.553 School Breakfast Program $611,154 - 0
84.424 Student Support and Academic Enrichment Program $170,948 - 0
84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) $87,130 - 0
84.027 Special Education Grants to States $25,224 - 0
84.365 English Language Acquisition State Grants $9,670 - 0
84.173 Special Education Preschool Grants $4,608 - 0

Contacts

Name Title Type
X1B8LFL1BAN5 Eva Spilker Auditee
4105983087 Kyla Greenhoe Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 BASIS OF PRESENTATION Accounting Policies: NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance for all awards. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: PLA has elected not to use the 10 percent de minimus indirect cost rate to recover indirect costs as allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (Schedule) includes the federal grant activity of The Phalen Leadership Academy – Indiana, Inc. (PLA) under programs of the federal government for the year ended June 30, 2024. The information in this Schedule is presented in accordance with the requirements of the Uniform Guidance. Because the Schedule presents only a selected portion of the operations of PLA, it is not intended to and does not present the financial position of PLA.
Title: NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance for all awards. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: PLA has elected not to use the 10 percent de minimus indirect cost rate to recover indirect costs as allowed under the Uniform Guidance. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance for all awards. Under these principles, certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. PLA has elected not to use the 10 percent de minimus indirect cost rate to recover indirect costs as allowed under the Uniform Guidance.

Finding Details

Finding 2024-001
2024 – 001: Procurement and Suspension and Debarment Federal Agency: U.S. Department Education Federal Program Name: Charter School Program Assistance Listing Number: 84.282 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: U282A200017, S282D200002 Award Period: July 1, 2023 – June 30, 2024 Type of Finding:  Material Weakness in Internal Control Over Compliance  Other Matters Criteria or specific requirement: Per Charter School Program, Subtitle A, Chapter 2 Part 200, Subpart D, section 200.318 of the Code of Federal Regulations requires Charter Schools to have a written procurement policy that includes certain requirements as it relates to procuring good and services using federal dollars. Additionally, 2 CFR 180.995 requires that the Charter School has a written policy where the Charter School should perform a check to ensure vendors are not debarred. Condition: During our testing, it was noted that PLA did not follow the written policy in place for number of quotes and quote cost analysis. PLA did not comply with procurement policy it has in place as the number of quotes for two (2) of five (5) procured purchases selected did not obtain the number of quotes required by the policy. During our testing, it was noted during that there is no written policy that requires PLA to verify that vendors are suspended or debarred. We noted that PLA did not complete and document its verification that vendors are not suspended or debarred vendors prior to being utilized. Four (4) of four (4) vendors selected for testing were utilized during the audit period that did not have this documented. During audit procedures, these vendors were checked and were not suspended or debarred. Questioned costs: None Context: PLA was unaware of the federal requirements for procurement and suspension and debarment. Cause: PLA’s procurement policy did not include all federal requirements. Effect: Procured purchases could be completed not in accordance with PLA and federal requirements. Vendors could be utilized for federal programs that are suspended and debarred. Repeat finding: No. Recommendation: We recommend that PLA review its procurement policy to ensure that a suspension and debarment formal check and documentation be included to ensure that all federal requirements are included in its written policies. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-002
2024 – 002: Special Tests and Provisions Federal Agency: U.S Department Education Federal Program Name: Education Stabilization Funds Assistance Listing Number: 84.425D, 84.425U Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425U210013 Award Period: July 1, 2023 – June 30, 2024 Type of Finding:  Material Weakness in Internal Control over Compliance  Other Matters Criteria or specific requirement: Per 2 CFR 200.303, "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). If governors, SEAs, and or subrecipients propose to use ESF funds for construction they must also comply with applicable requirements in 34 CFR section 76.600 and 34 CFR sections 75.600–617. Approved construction projects must comply with all other applicable Uniform Guidance requirements, as well as the ED’s regulations regarding construction, as applicable, at 34 CFR section 76.600. As is the case with all construction contracts using laborers and mechanics financed by federal education funds, recipients and subrecipients that use ESF funds for construction contracts over $2,000 must meet Davis-Bacon prevailing wage requirements. Condition: PLA did not verify compliance with prevailing wage requirements with subcontractors for construction projects financed by federal education funds. Questioned costs: $365,489. Context: 1 of 1 construction projects financed by federal education funds were subject to prevailing wage requirements. Cause: PLA was not familiar with using federal education funds for construction costs and were not aware of the prevailing wage requirements Effect: Laborers and mechanics paid by subcontractors may have been paid below prevailing wage rates. Repeat Finding: Yes – 2023-002. Recommendation: We recommend that for future construction contracts financed by federal education funds PLA verify that subcontractors comply with prevailing wage requirements. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-002
2024 – 002: Special Tests and Provisions Federal Agency: U.S Department Education Federal Program Name: Education Stabilization Funds Assistance Listing Number: 84.425D, 84.425U Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425U210013 Award Period: July 1, 2023 – June 30, 2024 Type of Finding:  Material Weakness in Internal Control over Compliance  Other Matters Criteria or specific requirement: Per 2 CFR 200.303, "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). If governors, SEAs, and or subrecipients propose to use ESF funds for construction they must also comply with applicable requirements in 34 CFR section 76.600 and 34 CFR sections 75.600–617. Approved construction projects must comply with all other applicable Uniform Guidance requirements, as well as the ED’s regulations regarding construction, as applicable, at 34 CFR section 76.600. As is the case with all construction contracts using laborers and mechanics financed by federal education funds, recipients and subrecipients that use ESF funds for construction contracts over $2,000 must meet Davis-Bacon prevailing wage requirements. Condition: PLA did not verify compliance with prevailing wage requirements with subcontractors for construction projects financed by federal education funds. Questioned costs: $365,489. Context: 1 of 1 construction projects financed by federal education funds were subject to prevailing wage requirements. Cause: PLA was not familiar with using federal education funds for construction costs and were not aware of the prevailing wage requirements Effect: Laborers and mechanics paid by subcontractors may have been paid below prevailing wage rates. Repeat Finding: Yes – 2023-002. Recommendation: We recommend that for future construction contracts financed by federal education funds PLA verify that subcontractors comply with prevailing wage requirements. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-001
2024 – 001: Procurement and Suspension and Debarment Federal Agency: U.S. Department Education Federal Program Name: Charter School Program Assistance Listing Number: 84.282 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: U282A200017, S282D200002 Award Period: July 1, 2023 – June 30, 2024 Type of Finding:  Material Weakness in Internal Control Over Compliance  Other Matters Criteria or specific requirement: Per Charter School Program, Subtitle A, Chapter 2 Part 200, Subpart D, section 200.318 of the Code of Federal Regulations requires Charter Schools to have a written procurement policy that includes certain requirements as it relates to procuring good and services using federal dollars. Additionally, 2 CFR 180.995 requires that the Charter School has a written policy where the Charter School should perform a check to ensure vendors are not debarred. Condition: During our testing, it was noted that PLA did not follow the written policy in place for number of quotes and quote cost analysis. PLA did not comply with procurement policy it has in place as the number of quotes for two (2) of five (5) procured purchases selected did not obtain the number of quotes required by the policy. During our testing, it was noted during that there is no written policy that requires PLA to verify that vendors are suspended or debarred. We noted that PLA did not complete and document its verification that vendors are not suspended or debarred vendors prior to being utilized. Four (4) of four (4) vendors selected for testing were utilized during the audit period that did not have this documented. During audit procedures, these vendors were checked and were not suspended or debarred. Questioned costs: None Context: PLA was unaware of the federal requirements for procurement and suspension and debarment. Cause: PLA’s procurement policy did not include all federal requirements. Effect: Procured purchases could be completed not in accordance with PLA and federal requirements. Vendors could be utilized for federal programs that are suspended and debarred. Repeat finding: No. Recommendation: We recommend that PLA review its procurement policy to ensure that a suspension and debarment formal check and documentation be included to ensure that all federal requirements are included in its written policies. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-002
2024 – 002: Special Tests and Provisions Federal Agency: U.S Department Education Federal Program Name: Education Stabilization Funds Assistance Listing Number: 84.425D, 84.425U Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425U210013 Award Period: July 1, 2023 – June 30, 2024 Type of Finding:  Material Weakness in Internal Control over Compliance  Other Matters Criteria or specific requirement: Per 2 CFR 200.303, "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). If governors, SEAs, and or subrecipients propose to use ESF funds for construction they must also comply with applicable requirements in 34 CFR section 76.600 and 34 CFR sections 75.600–617. Approved construction projects must comply with all other applicable Uniform Guidance requirements, as well as the ED’s regulations regarding construction, as applicable, at 34 CFR section 76.600. As is the case with all construction contracts using laborers and mechanics financed by federal education funds, recipients and subrecipients that use ESF funds for construction contracts over $2,000 must meet Davis-Bacon prevailing wage requirements. Condition: PLA did not verify compliance with prevailing wage requirements with subcontractors for construction projects financed by federal education funds. Questioned costs: $365,489. Context: 1 of 1 construction projects financed by federal education funds were subject to prevailing wage requirements. Cause: PLA was not familiar with using federal education funds for construction costs and were not aware of the prevailing wage requirements Effect: Laborers and mechanics paid by subcontractors may have been paid below prevailing wage rates. Repeat Finding: Yes – 2023-002. Recommendation: We recommend that for future construction contracts financed by federal education funds PLA verify that subcontractors comply with prevailing wage requirements. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2024-002
2024 – 002: Special Tests and Provisions Federal Agency: U.S Department Education Federal Program Name: Education Stabilization Funds Assistance Listing Number: 84.425D, 84.425U Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425U210013 Award Period: July 1, 2023 – June 30, 2024 Type of Finding:  Material Weakness in Internal Control over Compliance  Other Matters Criteria or specific requirement: Per 2 CFR 200.303, "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). If governors, SEAs, and or subrecipients propose to use ESF funds for construction they must also comply with applicable requirements in 34 CFR section 76.600 and 34 CFR sections 75.600–617. Approved construction projects must comply with all other applicable Uniform Guidance requirements, as well as the ED’s regulations regarding construction, as applicable, at 34 CFR section 76.600. As is the case with all construction contracts using laborers and mechanics financed by federal education funds, recipients and subrecipients that use ESF funds for construction contracts over $2,000 must meet Davis-Bacon prevailing wage requirements. Condition: PLA did not verify compliance with prevailing wage requirements with subcontractors for construction projects financed by federal education funds. Questioned costs: $365,489. Context: 1 of 1 construction projects financed by federal education funds were subject to prevailing wage requirements. Cause: PLA was not familiar with using federal education funds for construction costs and were not aware of the prevailing wage requirements Effect: Laborers and mechanics paid by subcontractors may have been paid below prevailing wage rates. Repeat Finding: Yes – 2023-002. Recommendation: We recommend that for future construction contracts financed by federal education funds PLA verify that subcontractors comply with prevailing wage requirements. Views of responsible officials: There is no disagreement with the audit finding.