Audit 390129

FINDING 2025-002 – MAINTENANCE OF EFFORT Significant Deficiency Federal Programs: Title I, Part A – Assistance Listing Number 84.010 Criteria 2 CFR part 200, Appendix XI, Compliance Supplement 2020, Section 4-84.000-13, states “An LEA may receive funds under an applicable program only if the SEA finds that the combined fiscal effort per student or the aggregate expenditures of the LEA from state and local funds for free public education for the preceding year was not less than 90 percent of the combined fiscal effort or aggregate expenditures for the second preceding year, unless specifically waved.” Condition The Indiana Department of Education completes the maintenance of effort calculation using the Form 9 report issued by the Organization, which is a cash-basis report. Review of the Organization’s Form 9 found the report to be unreliable for analysis of expenditures. The Form 9 reflected a total ending cash balance for all three schools of ($7,037,772), when the total cash balance held by the school at June 30, 2025 was $3,083,380. Cause and Effect The Organization did not report activity in line with the guidelines set by the Indiana Department of Education. Maintenance of effort calculations prepared by the Indiana Department of Education could be impacted by incorrect reporting of expense transactions. Recommendation We recommend the Organization develop internal controls to ensure expenses are properly reported on the Form 9 report in line with guidelines. Views of Responsible Officials and Planned Corrective Actions The Organization’s Corrective Action Plan is included on pages 37 to 38.

FINDING 2025-001 – EQUIPMENT AND REAL PROPERTY MANAGEMENT Significant Deficiency Federal Programs: Education Stabilization Fund – Assistance Listing Number 84.425 Repeat Finding: This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2024-002. Criteria 2 CFR 200.313(d) contains equipment management requirements which dictate property records entities must maintain and the need for procedures to adequately safeguard and maintain assets acquired with federal funding. Condition The Organization did not retain in their accounting records all the required information. Specifically, the federal award identification number, holder of the title, use, and condition were not listed. The federal participation was assumed based on allocations between fund codes in the general ledger. Additionally, sufficient and appropriate documentation did not exist to support a physical inventory had been completed for all assets once in the last two years. Cause and Effect Individuals responsible for the use of federal funds or maintenance and safeguard of assets acquired with federal funds lacked knowledge of the compliance requirements pertaining to the use of the funds or the maintenance and safeguard of the acquired assets. As a result, adequate documentation was not maintained for equipment acquired with federal funds or to support the performance of a physical inventory occurring within the required time period. Recommendation We recommend the Organization develop a system of internal controls aligned with the applicable compliance requirements to properly track equipment acquisitions in the accounting records and to ensure a physical inventory is appropriately documented when completed. Views of Responsible Officials and Planned Corrective Actions The Organization’s Corrective Action Plan is included on pages 37 to 38.