FINDING 2024-002
Information on the federal program:
Subject: Education Stabilization Fund (ESSER) – Internal Controls
Federal Agency: Department of Education
Federal Program: COVID-19 – Education Stabilization Fund
Assistance Listing Number: 84.425D, 84.425U
Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Reporting
Audit Finding: Material Weakness
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance
that the non-Federal entity is managing the Federal awards in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the
Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."
2 CFR 200.302(b) states in part:
"The financial management system of each non-Federal entity must provide for the following:
(2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in
accordance with the reporting requirements set forth in §§ 200.328 Financial reporting . . . ."
34 CFR 76.722 states:
"A State may require a subgrantee to submit reports in a manner and format that assists the State in
complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the
program."
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the Reporting compliance
requirements.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with the compliance requirements listed above.
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 questioned costs identified.
Context: The School Corporation was required to submit two Annual Data Reports to the Indiana
Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER
grant awards. We noted that the ESSER II and ESSER III amounts reported on the Year 2 report ($241,092
and $180,266, respectively) did not agree to the underlying expenditure records ($226,005 and $88,368,
respectively, for the period of July 1, 2021 through June 30, 2022).
We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($136,199 and
$255,826, respectively) did not agree to the underlying expenditure records ($170,866 and $192,735,
respectively, for the period of July 1, 2021 through June 30, 2022).
Additionally, the number of employees reported on the Year 4CrossAct report was overstated by 4
employees.
Identification as a repeat finding: No.
Recommendation: We recommend someone other than the preparer of the report perform a documented
review prior to submission to validate the accuracy and completeness of the data submitted.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-002
Information on the federal program:
Subject: Education Stabilization Fund (ESSER) – Internal Controls
Federal Agency: Department of Education
Federal Program: COVID-19 – Education Stabilization Fund
Assistance Listing Number: 84.425D, 84.425U
Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Reporting
Audit Finding: Material Weakness
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance
that the non-Federal entity is managing the Federal awards in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the
Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."
2 CFR 200.302(b) states in part:
"The financial management system of each non-Federal entity must provide for the following:
(2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in
accordance with the reporting requirements set forth in §§ 200.328 Financial reporting . . . ."
34 CFR 76.722 states:
"A State may require a subgrantee to submit reports in a manner and format that assists the State in
complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the
program."
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the Reporting compliance
requirements.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with the compliance requirements listed above.
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 questioned costs identified.
Context: The School Corporation was required to submit two Annual Data Reports to the Indiana
Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER
grant awards. We noted that the ESSER II and ESSER III amounts reported on the Year 2 report ($241,092
and $180,266, respectively) did not agree to the underlying expenditure records ($226,005 and $88,368,
respectively, for the period of July 1, 2021 through June 30, 2022).
We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($136,199 and
$255,826, respectively) did not agree to the underlying expenditure records ($170,866 and $192,735,
respectively, for the period of July 1, 2021 through June 30, 2022).
Additionally, the number of employees reported on the Year 4CrossAct report was overstated by 4
employees.
Identification as a repeat finding: No.
Recommendation: We recommend someone other than the preparer of the report perform a documented
review prior to submission to validate the accuracy and completeness of the data submitted.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-003
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: Significant Deficiency
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. . . .
(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 the compliance requirements listed above.
Effect: The failure to design and implement an effective internal control system enabled material
noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and
Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal
funds to the School Corporation.
Questioned Costs: There were no questioned costs identified.
Context: The School Corporation had improvements at various buildings. It did not properly include Davis-
Bacon wage rate requirements in the vendor contract, nor did it obtain weekly payroll reports certifications
from the construction vendor to monitor compliance with Davis-Bacon wage rate requirements. The total
project cost disbursed during the audit period was $73,209 which included materials and labor.
Identification as a repeat finding: No.
Recommendation: We recommend the School Corporation implement a formal process to ensure the
required weekly payroll reports certifications are collected and reviewed for projects requiring labor
installation and funded by federal grants subject to Davis-Bacon wage rate requirements to ensure
compliance with federal regulations.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-003
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: Significant Deficiency
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. . . .
(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 the compliance requirements listed above.
Effect: The failure to design and implement an effective internal control system enabled material
noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and
Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal
funds to the School Corporation.
Questioned Costs: There were no questioned costs identified.
Context: The School Corporation had improvements at various buildings. It did not properly include Davis-
Bacon wage rate requirements in the vendor contract, nor did it obtain weekly payroll reports certifications
from the construction vendor to monitor compliance with Davis-Bacon wage rate requirements. The total
project cost disbursed during the audit period was $73,209 which included materials and labor.
Identification as a repeat finding: No.
Recommendation: We recommend the School Corporation implement a formal process to ensure the
required weekly payroll reports certifications are collected and reviewed for projects requiring labor
installation and funded by federal grants subject to Davis-Bacon wage rate requirements to ensure
compliance with federal regulations.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-004
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: Activities Allowed or Unallowed, Allowable Costs/Cost Principles
Audit Finding: Significant Deficiency
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 the Activities Allowed or Unallowed, Allowable Costs/Cost Principles 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 questioned costs identified.
Context: We noted there was no review of 4 timecards selected for testing in a sample of 40 payroll
transactions.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommended that the School Corporation's management ensure all timecards are
formally reviewed and the School Corporation maintain the supporting documentation.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-004
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: Activities Allowed or Unallowed, Allowable Costs/Cost Principles
Audit Finding: Significant Deficiency
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 the Activities Allowed or Unallowed, Allowable Costs/Cost Principles 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 questioned costs identified.
Context: We noted there was no review of 4 timecards selected for testing in a sample of 40 payroll
transactions.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommended that the School Corporation's management ensure all timecards are
formally reviewed and the School Corporation maintain the supporting documentation.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-004
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: Activities Allowed or Unallowed, Allowable Costs/Cost Principles
Audit Finding: Significant Deficiency
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 the Activities Allowed or Unallowed, Allowable Costs/Cost Principles 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 questioned costs identified.
Context: We noted there was no review of 4 timecards selected for testing in a sample of 40 payroll
transactions.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommended that the School Corporation's management ensure all timecards are
formally reviewed and the School Corporation maintain the supporting documentation.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-002
Information on the federal program:
Subject: Education Stabilization Fund (ESSER) – Internal Controls
Federal Agency: Department of Education
Federal Program: COVID-19 – Education Stabilization Fund
Assistance Listing Number: 84.425D, 84.425U
Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Reporting
Audit Finding: Material Weakness
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance
that the non-Federal entity is managing the Federal awards in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the
Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."
2 CFR 200.302(b) states in part:
"The financial management system of each non-Federal entity must provide for the following:
(2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in
accordance with the reporting requirements set forth in §§ 200.328 Financial reporting . . . ."
34 CFR 76.722 states:
"A State may require a subgrantee to submit reports in a manner and format that assists the State in
complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the
program."
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the Reporting compliance
requirements.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with the compliance requirements listed above.
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 questioned costs identified.
Context: The School Corporation was required to submit two Annual Data Reports to the Indiana
Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER
grant awards. We noted that the ESSER II and ESSER III amounts reported on the Year 2 report ($241,092
and $180,266, respectively) did not agree to the underlying expenditure records ($226,005 and $88,368,
respectively, for the period of July 1, 2021 through June 30, 2022).
We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($136,199 and
$255,826, respectively) did not agree to the underlying expenditure records ($170,866 and $192,735,
respectively, for the period of July 1, 2021 through June 30, 2022).
Additionally, the number of employees reported on the Year 4CrossAct report was overstated by 4
employees.
Identification as a repeat finding: No.
Recommendation: We recommend someone other than the preparer of the report perform a documented
review prior to submission to validate the accuracy and completeness of the data submitted.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-002
Information on the federal program:
Subject: Education Stabilization Fund (ESSER) – Internal Controls
Federal Agency: Department of Education
Federal Program: COVID-19 – Education Stabilization Fund
Assistance Listing Number: 84.425D, 84.425U
Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Reporting
Audit Finding: Material Weakness
Criteria: 2 CFR section 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance
that the non-Federal entity is managing the Federal awards in compliance with Federal statutes,
regulations, and the terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the
Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."
2 CFR 200.302(b) states in part:
"The financial management system of each non-Federal entity must provide for the following:
(2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in
accordance with the reporting requirements set forth in §§ 200.328 Financial reporting . . . ."
34 CFR 76.722 states:
"A State may require a subgrantee to submit reports in a manner and format that assists the State in
complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the
program."
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the Reporting compliance
requirements.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with the compliance requirements listed above.
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 questioned costs identified.
Context: The School Corporation was required to submit two Annual Data Reports to the Indiana
Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER
grant awards. We noted that the ESSER II and ESSER III amounts reported on the Year 2 report ($241,092
and $180,266, respectively) did not agree to the underlying expenditure records ($226,005 and $88,368,
respectively, for the period of July 1, 2021 through June 30, 2022).
We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($136,199 and
$255,826, respectively) did not agree to the underlying expenditure records ($170,866 and $192,735,
respectively, for the period of July 1, 2021 through June 30, 2022).
Additionally, the number of employees reported on the Year 4CrossAct report was overstated by 4
employees.
Identification as a repeat finding: No.
Recommendation: We recommend someone other than the preparer of the report perform a documented
review prior to submission to validate the accuracy and completeness of the data submitted.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-003
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: Significant Deficiency
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. . . .
(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 the compliance requirements listed above.
Effect: The failure to design and implement an effective internal control system enabled material
noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and
Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal
funds to the School Corporation.
Questioned Costs: There were no questioned costs identified.
Context: The School Corporation had improvements at various buildings. It did not properly include Davis-
Bacon wage rate requirements in the vendor contract, nor did it obtain weekly payroll reports certifications
from the construction vendor to monitor compliance with Davis-Bacon wage rate requirements. The total
project cost disbursed during the audit period was $73,209 which included materials and labor.
Identification as a repeat finding: No.
Recommendation: We recommend the School Corporation implement a formal process to ensure the
required weekly payroll reports certifications are collected and reviewed for projects requiring labor
installation and funded by federal grants subject to Davis-Bacon wage rate requirements to ensure
compliance with federal regulations.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-003
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: Significant Deficiency
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. . . .
(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 the compliance requirements listed above.
Effect: The failure to design and implement an effective internal control system enabled material
noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and
Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal
funds to the School Corporation.
Questioned Costs: There were no questioned costs identified.
Context: The School Corporation had improvements at various buildings. It did not properly include Davis-
Bacon wage rate requirements in the vendor contract, nor did it obtain weekly payroll reports certifications
from the construction vendor to monitor compliance with Davis-Bacon wage rate requirements. The total
project cost disbursed during the audit period was $73,209 which included materials and labor.
Identification as a repeat finding: No.
Recommendation: We recommend the School Corporation implement a formal process to ensure the
required weekly payroll reports certifications are collected and reviewed for projects requiring labor
installation and funded by federal grants subject to Davis-Bacon wage rate requirements to ensure
compliance with federal regulations.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-004
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: Activities Allowed or Unallowed, Allowable Costs/Cost Principles
Audit Finding: Significant Deficiency
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 the Activities Allowed or Unallowed, Allowable Costs/Cost Principles 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 questioned costs identified.
Context: We noted there was no review of 4 timecards selected for testing in a sample of 40 payroll
transactions.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommended that the School Corporation's management ensure all timecards are
formally reviewed and the School Corporation maintain the supporting documentation.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-004
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: Activities Allowed or Unallowed, Allowable Costs/Cost Principles
Audit Finding: Significant Deficiency
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 the Activities Allowed or Unallowed, Allowable Costs/Cost Principles 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 questioned costs identified.
Context: We noted there was no review of 4 timecards selected for testing in a sample of 40 payroll
transactions.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommended that the School Corporation's management ensure all timecards are
formally reviewed and the School Corporation maintain the supporting documentation.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.
FINDING 2024-004
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: Activities Allowed or Unallowed, Allowable Costs/Cost Principles
Audit Finding: Significant Deficiency
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 the Activities Allowed or Unallowed, Allowable Costs/Cost Principles 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 questioned costs identified.
Context: We noted there was no review of 4 timecards selected for testing in a sample of 40 payroll
transactions.
Identification as a repeat finding, if applicable: No.
Recommendation: We recommended that the School Corporation's management ensure all timecards are
formally reviewed and the School Corporation maintain the supporting documentation.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan.