Information on the federal program:
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Eligibility
Audit Finding: Material Weakness, Material Noncompliance, Qualified Opinion
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance
that the non-Federal entity is managing the Federal awards in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the
Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the eligibility compliance
requirement.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with eligibility requirements.
Effect: The failure to establish an effective internal control system placed the School Corporation at risk of
noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties
within an internal control system could have also allowed noncompliance with the compliance requirements
and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight,
reviews, and approvals over the activities of the programs.
Questioned Costs: There were no known questioned costs identified.
Context: During the testing of internal controls over eligibility determinations via the application process
and related compliance, we noted the School Corporation was not able to provide the application or any
documentation to support the eligibility status for 6 out of the 8 applicant students selected for tested for
the 2022-2023 school year. There were no issues identified for students selected for testing whose eligibility
was directly certified.
Additionally, for the 2023-2024 school year, for 2 out of 30 students selected for the testing, the income
eligibility determinations were not properly implemented. One student was determined to be eligible for
"Free" meals per their free/reduced application but, the School Corporation incorrectly entered the eligibility
as “Reduced” within the food service software. Another student was eligible for "Reduced" benefits per the
direct certified download file but was entered into the food service software as eligible for "Free" benefits.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommend that the School Corporation's management strengthen their internal
control process to ensure retention of documentation that supports eligibility determination, particular for
the determinations completed through the application process. We also recommend management perform
a secondary review of income eligibility determinations entered into the food service software to ensure
accurate statuses are entered.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
Information on the federal program:
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Eligibility
Audit Finding: Material Weakness, Material Noncompliance, Qualified Opinion
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance
that the non-Federal entity is managing the Federal awards in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the
Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the eligibility compliance
requirement.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with eligibility requirements.
Effect: The failure to establish an effective internal control system placed the School Corporation at risk of
noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties
within an internal control system could have also allowed noncompliance with the compliance requirements
and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight,
reviews, and approvals over the activities of the programs.
Questioned Costs: There were no known questioned costs identified.
Context: During the testing of internal controls over eligibility determinations via the application process
and related compliance, we noted the School Corporation was not able to provide the application or any
documentation to support the eligibility status for 6 out of the 8 applicant students selected for tested for
the 2022-2023 school year. There were no issues identified for students selected for testing whose eligibility
was directly certified.
Additionally, for the 2023-2024 school year, for 2 out of 30 students selected for the testing, the income
eligibility determinations were not properly implemented. One student was determined to be eligible for
"Free" meals per their free/reduced application but, the School Corporation incorrectly entered the eligibility
as “Reduced” within the food service software. Another student was eligible for "Reduced" benefits per the
direct certified download file but was entered into the food service software as eligible for "Free" benefits.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommend that the School Corporation's management strengthen their internal
control process to ensure retention of documentation that supports eligibility determination, particular for
the determinations completed through the application process. We also recommend management perform
a secondary review of income eligibility determinations entered into the food service software to ensure
accurate statuses are entered.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
Information on the federal program:
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Eligibility
Audit Finding: Material Weakness, Material Noncompliance, Qualified Opinion
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance
that the non-Federal entity is managing the Federal awards in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the
Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the eligibility compliance
requirement.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with eligibility requirements.
Effect: The failure to establish an effective internal control system placed the School Corporation at risk of
noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties
within an internal control system could have also allowed noncompliance with the compliance requirements
and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight,
reviews, and approvals over the activities of the programs.
Questioned Costs: There were no known questioned costs identified.
Context: During the testing of internal controls over eligibility determinations via the application process
and related compliance, we noted the School Corporation was not able to provide the application or any
documentation to support the eligibility status for 6 out of the 8 applicant students selected for tested for
the 2022-2023 school year. There were no issues identified for students selected for testing whose eligibility
was directly certified.
Additionally, for the 2023-2024 school year, for 2 out of 30 students selected for the testing, the income
eligibility determinations were not properly implemented. One student was determined to be eligible for
"Free" meals per their free/reduced application but, the School Corporation incorrectly entered the eligibility
as “Reduced” within the food service software. Another student was eligible for "Reduced" benefits per the
direct certified download file but was entered into the food service software as eligible for "Free" benefits.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommend that the School Corporation's management strengthen their internal
control process to ensure retention of documentation that supports eligibility determination, particular for
the determinations completed through the application process. We also recommend management perform
a secondary review of income eligibility determinations entered into the food service software to ensure
accurate statuses are entered.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
Information on the federal program:
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Eligibility
Audit Finding: Material Weakness, Material Noncompliance, Qualified Opinion
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance
that the non-Federal entity is managing the Federal awards in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the
Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the eligibility compliance
requirement.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with eligibility requirements.
Effect: The failure to establish an effective internal control system placed the School Corporation at risk of
noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties
within an internal control system could have also allowed noncompliance with the compliance requirements
and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight,
reviews, and approvals over the activities of the programs.
Questioned Costs: There were no known questioned costs identified.
Context: During the testing of internal controls over eligibility determinations via the application process
and related compliance, we noted the School Corporation was not able to provide the application or any
documentation to support the eligibility status for 6 out of the 8 applicant students selected for tested for
the 2022-2023 school year. There were no issues identified for students selected for testing whose eligibility
was directly certified.
Additionally, for the 2023-2024 school year, for 2 out of 30 students selected for the testing, the income
eligibility determinations were not properly implemented. One student was determined to be eligible for
"Free" meals per their free/reduced application but, the School Corporation incorrectly entered the eligibility
as “Reduced” within the food service software. Another student was eligible for "Reduced" benefits per the
direct certified download file but was entered into the food service software as eligible for "Free" benefits.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommend that the School Corporation's management strengthen their internal
control process to ensure retention of documentation that supports eligibility determination, particular for
the determinations completed through the application process. We also recommend management perform
a secondary review of income eligibility determinations entered into the food service software to ensure
accurate statuses are entered.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
Information on the federal program:
Subject: Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements
Federal Agency: Department of Education
Federal Program: COVID-19 - Education Stabilization Fund
Assistance Listing Number: 84.425D, 84.425U
Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements
Audit Findings: Material Weakness, Material Noncompliance, Qualified Opinion
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance
that the non-Federal entity is managing the Federal awards in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the
Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."
29 CFR 5.5 states in part:
(1) Minimum wages.
(i) All laborers and mechanics employed or working upon the site of the work (or under the United
States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the
project), will be paid unconditionally and not less often than once a week, and without subsequent deduction
or rebate on any account (except such payroll deductions as are permitted by regulations issued by the
Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe
benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those
contained in the wage determination of the Secretary of Labor which is attached hereto and made a part
hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and
such laborers and mechanics…
3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy
of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract,
but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or
owner, as the case may be, for transmission to the (write in name of agency).
2 CFR 200 Appendix II states in part:
In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by
the non-Federal entity under the Federal award must contain provisions covering the following, as
applicable.
(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation,
all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a
provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented
by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts
Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must
be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified
in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay
wages not less than once a week.. . .”
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions
– Wage Rate Requirements compliance requirements.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with eligibility requirements.
Effect: The failure to design and implement an effective internal control system enabled material
noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and
Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal
funds to the School Corporation.
Questioned Costs: There were no questioned costs identified.
Context: The School Corporation had five construction and improvement projects which were funded with
ESSER II (84.425D) and ESSER III (84.425U) grant awards. For 1 of 2 contracts selected for testing, the
School Corporation did not include the Davis-Bacon wage rate requirements in the vendor contract. For
this same vendor contract for floor replacement in a junior/senior high school, the School Corporation did
not obtain the weekly payroll report certification from the construction vendor to monitor compliance with
Davis-Bacon wage rate requirements. Therefore, no review was performed to ensure that pay rates
complied with the federal wage rate requirements for this project. The total project cost disbursed for the
flooring project during the audit period was $342,822 which included materials and labor. Total contract
expenditures subject to Davis-Bacon wage rate requirements, including material and labor, during the audit
period were $1,386,275.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommend the School Corporation implement a formal process to ensure
contracts for construction or labor installation funded be federal awards include a clause for Davis-Bacon
federal wage rate requirements. The School Corporation should also implement a formal procedure to
ensure required weekly payroll reports certifications are collected and reviewed by School Corporation
personnel for federal funded projects requiring labor installation to ensure compliance with federal wage
rate requirements.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
Information on the federal program:
Subject: Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements
Federal Agency: Department of Education
Federal Program: COVID-19 - Education Stabilization Fund
Assistance Listing Number: 84.425D, 84.425U
Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements
Audit Findings: Material Weakness, Material Noncompliance, Qualified Opinion
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance
that the non-Federal entity is managing the Federal awards in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the
Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."
29 CFR 5.5 states in part:
(1) Minimum wages.
(i) All laborers and mechanics employed or working upon the site of the work (or under the United
States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the
project), will be paid unconditionally and not less often than once a week, and without subsequent deduction
or rebate on any account (except such payroll deductions as are permitted by regulations issued by the
Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe
benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those
contained in the wage determination of the Secretary of Labor which is attached hereto and made a part
hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and
such laborers and mechanics…
3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy
of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract,
but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or
owner, as the case may be, for transmission to the (write in name of agency).
2 CFR 200 Appendix II states in part:
In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by
the non-Federal entity under the Federal award must contain provisions covering the following, as
applicable.
(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation,
all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a
provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented
by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts
Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must
be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified
in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay
wages not less than once a week.. . .”
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions
– Wage Rate Requirements compliance requirements.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with eligibility requirements.
Effect: The failure to design and implement an effective internal control system enabled material
noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and
Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal
funds to the School Corporation.
Questioned Costs: There were no questioned costs identified.
Context: The School Corporation had five construction and improvement projects which were funded with
ESSER II (84.425D) and ESSER III (84.425U) grant awards. For 1 of 2 contracts selected for testing, the
School Corporation did not include the Davis-Bacon wage rate requirements in the vendor contract. For
this same vendor contract for floor replacement in a junior/senior high school, the School Corporation did
not obtain the weekly payroll report certification from the construction vendor to monitor compliance with
Davis-Bacon wage rate requirements. Therefore, no review was performed to ensure that pay rates
complied with the federal wage rate requirements for this project. The total project cost disbursed for the
flooring project during the audit period was $342,822 which included materials and labor. Total contract
expenditures subject to Davis-Bacon wage rate requirements, including material and labor, during the audit
period were $1,386,275.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommend the School Corporation implement a formal process to ensure
contracts for construction or labor installation funded be federal awards include a clause for Davis-Bacon
federal wage rate requirements. The School Corporation should also implement a formal procedure to
ensure required weekly payroll reports certifications are collected and reviewed by School Corporation
personnel for federal funded projects requiring labor installation to ensure compliance with federal wage
rate requirements.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
Information on the federal program:
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Eligibility
Audit Finding: Material Weakness, Material Noncompliance, Qualified Opinion
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance
that the non-Federal entity is managing the Federal awards in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the
Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the eligibility compliance
requirement.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with eligibility requirements.
Effect: The failure to establish an effective internal control system placed the School Corporation at risk of
noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties
within an internal control system could have also allowed noncompliance with the compliance requirements
and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight,
reviews, and approvals over the activities of the programs.
Questioned Costs: There were no known questioned costs identified.
Context: During the testing of internal controls over eligibility determinations via the application process
and related compliance, we noted the School Corporation was not able to provide the application or any
documentation to support the eligibility status for 6 out of the 8 applicant students selected for tested for
the 2022-2023 school year. There were no issues identified for students selected for testing whose eligibility
was directly certified.
Additionally, for the 2023-2024 school year, for 2 out of 30 students selected for the testing, the income
eligibility determinations were not properly implemented. One student was determined to be eligible for
"Free" meals per their free/reduced application but, the School Corporation incorrectly entered the eligibility
as “Reduced” within the food service software. Another student was eligible for "Reduced" benefits per the
direct certified download file but was entered into the food service software as eligible for "Free" benefits.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommend that the School Corporation's management strengthen their internal
control process to ensure retention of documentation that supports eligibility determination, particular for
the determinations completed through the application process. We also recommend management perform
a secondary review of income eligibility determinations entered into the food service software to ensure
accurate statuses are entered.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
Information on the federal program:
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Eligibility
Audit Finding: Material Weakness, Material Noncompliance, Qualified Opinion
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance
that the non-Federal entity is managing the Federal awards in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the
Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the eligibility compliance
requirement.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with eligibility requirements.
Effect: The failure to establish an effective internal control system placed the School Corporation at risk of
noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties
within an internal control system could have also allowed noncompliance with the compliance requirements
and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight,
reviews, and approvals over the activities of the programs.
Questioned Costs: There were no known questioned costs identified.
Context: During the testing of internal controls over eligibility determinations via the application process
and related compliance, we noted the School Corporation was not able to provide the application or any
documentation to support the eligibility status for 6 out of the 8 applicant students selected for tested for
the 2022-2023 school year. There were no issues identified for students selected for testing whose eligibility
was directly certified.
Additionally, for the 2023-2024 school year, for 2 out of 30 students selected for the testing, the income
eligibility determinations were not properly implemented. One student was determined to be eligible for
"Free" meals per their free/reduced application but, the School Corporation incorrectly entered the eligibility
as “Reduced” within the food service software. Another student was eligible for "Reduced" benefits per the
direct certified download file but was entered into the food service software as eligible for "Free" benefits.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommend that the School Corporation's management strengthen their internal
control process to ensure retention of documentation that supports eligibility determination, particular for
the determinations completed through the application process. We also recommend management perform
a secondary review of income eligibility determinations entered into the food service software to ensure
accurate statuses are entered.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
Information on the federal program:
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Eligibility
Audit Finding: Material Weakness, Material Noncompliance, Qualified Opinion
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance
that the non-Federal entity is managing the Federal awards in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the
Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the eligibility compliance
requirement.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with eligibility requirements.
Effect: The failure to establish an effective internal control system placed the School Corporation at risk of
noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties
within an internal control system could have also allowed noncompliance with the compliance requirements
and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight,
reviews, and approvals over the activities of the programs.
Questioned Costs: There were no known questioned costs identified.
Context: During the testing of internal controls over eligibility determinations via the application process
and related compliance, we noted the School Corporation was not able to provide the application or any
documentation to support the eligibility status for 6 out of the 8 applicant students selected for tested for
the 2022-2023 school year. There were no issues identified for students selected for testing whose eligibility
was directly certified.
Additionally, for the 2023-2024 school year, for 2 out of 30 students selected for the testing, the income
eligibility determinations were not properly implemented. One student was determined to be eligible for
"Free" meals per their free/reduced application but, the School Corporation incorrectly entered the eligibility
as “Reduced” within the food service software. Another student was eligible for "Reduced" benefits per the
direct certified download file but was entered into the food service software as eligible for "Free" benefits.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommend that the School Corporation's management strengthen their internal
control process to ensure retention of documentation that supports eligibility determination, particular for
the determinations completed through the application process. We also recommend management perform
a secondary review of income eligibility determinations entered into the food service software to ensure
accurate statuses are entered.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
Information on the federal program:
Subject: Child Nutrition Cluster - Internal Controls
Federal Agency: Department of Agriculture
Federal Program: School Breakfast Program, National School Lunch Program
Assistance Listing Number: 10.553, 10.555
Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Eligibility
Audit Finding: Material Weakness, Material Noncompliance, Qualified Opinion
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance
that the non-Federal entity is managing the Federal awards in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the
Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the eligibility compliance
requirement.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with eligibility requirements.
Effect: The failure to establish an effective internal control system placed the School Corporation at risk of
noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties
within an internal control system could have also allowed noncompliance with the compliance requirements
and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight,
reviews, and approvals over the activities of the programs.
Questioned Costs: There were no known questioned costs identified.
Context: During the testing of internal controls over eligibility determinations via the application process
and related compliance, we noted the School Corporation was not able to provide the application or any
documentation to support the eligibility status for 6 out of the 8 applicant students selected for tested for
the 2022-2023 school year. There were no issues identified for students selected for testing whose eligibility
was directly certified.
Additionally, for the 2023-2024 school year, for 2 out of 30 students selected for the testing, the income
eligibility determinations were not properly implemented. One student was determined to be eligible for
"Free" meals per their free/reduced application but, the School Corporation incorrectly entered the eligibility
as “Reduced” within the food service software. Another student was eligible for "Reduced" benefits per the
direct certified download file but was entered into the food service software as eligible for "Free" benefits.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommend that the School Corporation's management strengthen their internal
control process to ensure retention of documentation that supports eligibility determination, particular for
the determinations completed through the application process. We also recommend management perform
a secondary review of income eligibility determinations entered into the food service software to ensure
accurate statuses are entered.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
Information on the federal program:
Subject: Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements
Federal Agency: Department of Education
Federal Program: COVID-19 - Education Stabilization Fund
Assistance Listing Number: 84.425D, 84.425U
Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements
Audit Findings: Material Weakness, Material Noncompliance, Qualified Opinion
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance
that the non-Federal entity is managing the Federal awards in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the
Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."
29 CFR 5.5 states in part:
(1) Minimum wages.
(i) All laborers and mechanics employed or working upon the site of the work (or under the United
States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the
project), will be paid unconditionally and not less often than once a week, and without subsequent deduction
or rebate on any account (except such payroll deductions as are permitted by regulations issued by the
Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe
benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those
contained in the wage determination of the Secretary of Labor which is attached hereto and made a part
hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and
such laborers and mechanics…
3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy
of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract,
but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or
owner, as the case may be, for transmission to the (write in name of agency).
2 CFR 200 Appendix II states in part:
In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by
the non-Federal entity under the Federal award must contain provisions covering the following, as
applicable.
(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation,
all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a
provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented
by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts
Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must
be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified
in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay
wages not less than once a week.. . .”
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions
– Wage Rate Requirements compliance requirements.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with eligibility requirements.
Effect: The failure to design and implement an effective internal control system enabled material
noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and
Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal
funds to the School Corporation.
Questioned Costs: There were no questioned costs identified.
Context: The School Corporation had five construction and improvement projects which were funded with
ESSER II (84.425D) and ESSER III (84.425U) grant awards. For 1 of 2 contracts selected for testing, the
School Corporation did not include the Davis-Bacon wage rate requirements in the vendor contract. For
this same vendor contract for floor replacement in a junior/senior high school, the School Corporation did
not obtain the weekly payroll report certification from the construction vendor to monitor compliance with
Davis-Bacon wage rate requirements. Therefore, no review was performed to ensure that pay rates
complied with the federal wage rate requirements for this project. The total project cost disbursed for the
flooring project during the audit period was $342,822 which included materials and labor. Total contract
expenditures subject to Davis-Bacon wage rate requirements, including material and labor, during the audit
period were $1,386,275.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommend the School Corporation implement a formal process to ensure
contracts for construction or labor installation funded be federal awards include a clause for Davis-Bacon
federal wage rate requirements. The School Corporation should also implement a formal procedure to
ensure required weekly payroll reports certifications are collected and reviewed by School Corporation
personnel for federal funded projects requiring labor installation to ensure compliance with federal wage
rate requirements.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
Information on the federal program:
Subject: Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements
Federal Agency: Department of Education
Federal Program: COVID-19 - Education Stabilization Fund
Assistance Listing Number: 84.425D, 84.425U
Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements
Audit Findings: Material Weakness, Material Noncompliance, Qualified Opinion
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance
that the non-Federal entity is managing the Federal awards in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the
Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."
29 CFR 5.5 states in part:
(1) Minimum wages.
(i) All laborers and mechanics employed or working upon the site of the work (or under the United
States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the
project), will be paid unconditionally and not less often than once a week, and without subsequent deduction
or rebate on any account (except such payroll deductions as are permitted by regulations issued by the
Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe
benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those
contained in the wage determination of the Secretary of Labor which is attached hereto and made a part
hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and
such laborers and mechanics…
3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy
of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract,
but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or
owner, as the case may be, for transmission to the (write in name of agency).
2 CFR 200 Appendix II states in part:
In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by
the non-Federal entity under the Federal award must contain provisions covering the following, as
applicable.
(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation,
all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a
provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented
by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts
Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must
be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified
in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay
wages not less than once a week.. . .”
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions
– Wage Rate Requirements compliance requirements.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with eligibility requirements.
Effect: The failure to design and implement an effective internal control system enabled material
noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and
Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal
funds to the School Corporation.
Questioned Costs: There were no questioned costs identified.
Context: The School Corporation had five construction and improvement projects which were funded with
ESSER II (84.425D) and ESSER III (84.425U) grant awards. For 1 of 2 contracts selected for testing, the
School Corporation did not include the Davis-Bacon wage rate requirements in the vendor contract. For
this same vendor contract for floor replacement in a junior/senior high school, the School Corporation did
not obtain the weekly payroll report certification from the construction vendor to monitor compliance with
Davis-Bacon wage rate requirements. Therefore, no review was performed to ensure that pay rates
complied with the federal wage rate requirements for this project. The total project cost disbursed for the
flooring project during the audit period was $342,822 which included materials and labor. Total contract
expenditures subject to Davis-Bacon wage rate requirements, including material and labor, during the audit
period were $1,386,275.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommend the School Corporation implement a formal process to ensure
contracts for construction or labor installation funded be federal awards include a clause for Davis-Bacon
federal wage rate requirements. The School Corporation should also implement a formal procedure to
ensure required weekly payroll reports certifications are collected and reviewed by School Corporation
personnel for federal funded projects requiring labor installation to ensure compliance with federal wage
rate requirements.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.