FINDING 2025-003 Subject: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2024, FY2025 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented an effective system of internal controls over review of individual free and reduced status applications and information management in the Skyward Software System used to determine and maintain eligibility status. Individual Applications The School Corporation noted individual applications for both direct certification and income eligible students would be printed and reviewed after the system makes a determination of eligibility status. Out of 40 students tested, no documentation of this review was provided for 34 of the students. INDIANA STATE BOARD OF ACCOUNTS 20 WAWASEE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Skyward Software System The School Corporation is required to design internal controls ensuring computer systems used to maintain student benefit status are secured. Currently, the Skyward Software System allows all school lunch employees to make changes to student benefit status, and there is no indication or record within the system who makes these changes. Additionally, income eligibility guidelines in the system that determine whether students are eligible based on income are updated by the system automatically every year. The School Corporation is required to perform an annual review to ensure these guidelines are accurate. However, no annual review is done by the School Corporation staff. The issues were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 245.3(c) states in part: "Each School Food Authority shall serve free and reduced price meals or free milk in the respective programs to children eligible under its eligibility criteria. . . ." 7 CFR 245.6(f)(1) states in part: ". . . Only persons directly connected with the administration or enforcement of a program or activity listed in paragraphs (f)(2) or (f)(3) of this section may have access to children's eligibility information, without parental consent. Persons considered directly connected with administration or enforcement of a program or activity listed in paragraphs (f)(2) or (f)(3) of this section are Federal, State, or local program operators responsible for the ongoing operation of the program or activity or responsible for program compliance. Program operators may include persons responsible for carrying out program requirements and monitoring, reviewing, auditing, or investigating the program. Program operators may include contractors, to the extent those persons have a need to know the information for program administration or enforcement. Contractors may include evaluators, auditors, and others with whom Federal or State agencies and program operators contract with to assist in the administration or enforcement of their program in their behalf." Cause A proper system of internal controls over the Skyward Software System was not properly designed and implemented as the School Corporation was not aware its process did not cover the requirements to restrict access to the Skyward Software System and review the income eligibility guidelines yearly. Additionally, the School Corporation was unable to provide documentation to demonstrate it reviewed individual applications to ensure eligibility status was determined accurately. The School Corporation noted that staff turnover resulted in lost documentation; therefore, the School Corporation was unable to provide any other records supporting that staff verified the eligibility status was determined accurately. INDIANA STATE BOARD OF ACCOUNTS 21 WAWASEE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without a proper system of internal controls, the School Corporation cannot ensure eligibility determinations made by either the Skyward Software System or employees are accurate. The School Corporation cannot ensure modifications made in the Skyward Software System to student eligibility status are traceable, which could result in improper changes to student eligibility status. Additionally, a properly designed annual review process over the income eligibility guidelines within the Skyward Software System is necessary to ensure accurate determinations. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation strengthen its internal controls over eligibility applications to ensure eligibility determinations made by either the Skyward Software System or employees are accurate. We further recommended the School Corporation update the Skyward Software System to identify who makes any modifications within the system to ensure modifications are fully traceable. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2025-004 Subject: Child Nutrition Cluster - Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2024, FY2025 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Significant Deficiency Condition and Context Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAM exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. The School Corporation had not designed or implemented internal controls, which would consist of policies and procedures, to ensure that vendors were not suspended, or debarred prior to entering into a covered transaction. The School Corporation verifies through review of the SAM exclusions each time it begins doing business with a new vendor. However, a second individual does not verify the website has been reviewed. INDIANA STATE BOARD OF ACCOUNTS 22 WAWASEE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause The School Corporation provided documentation showing it checked the SAM exclusions to verify the contractor was not suspended or debarred prior to entering into the contract but acknowledged no second employee reviews to ensure the procedure was performed as the School Corporation was not aware this was necessary. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation cannot ensure vendors with whom contracts are entered into are not suspended or debarred from doing business with governmental entities. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls that includes review of processes performed to ensure vendors are not suspended or debarred. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2025-005 Subject: Title I Grants to Local Educational Agencies - Internal Controls Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A220014, S010A230014, S010A240014 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Eligibility, Matching, Level of Effort, Earmarking Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 23 WAWASEE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding for internal controls only from the immediately prior audit report. The prior audit finding numbers were 2023-007 and 2023-008. Condition and Context Eligibility Eligibility for Title I is determined on the Eligible School Summary of the Tile I application. Enrollment and poverty numbers are automatically pulled from the Indiana Department of Education's (IDOE) Official Pupil Enrollment count for each school into the Eligible School Summary page of the Tile I application. The counts that are prepopulated should be based on the School Corporation's records as of October of the prior fiscal year. There was no documented review by the School Corporation of the enrollment and poverty counts that were prepopulated into the School Corporation's Title I grant application. Level of Effort - Individual Transactions (Vendor) The Form 9 (financial) data was submitted by the School Corporation to the IDOE semiannually. The data reported included the School Corporation's expenditures recorded during that period. The IDOE calculated Maintenance of Effort based on the expenditure information submitted on the Form 9 for that fiscal year. To verify amounts used by the IDOE in their computation were derived from the books and records of the School Corporation, costs were reviewed to ensure they were recorded properly as to account and object code and reported correctly on the Form 9. The School Corporation did not have an oversight process in place to ensure that expenditures for vendors were posted to the correct fund, account, and object codes. During review of expenditures, it was determined that there was not a documented second review in place for all vendor payments being made. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 24 WAWASEE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Although the School Corporation stated that one person is verifying the enrollment and poverty counts that are prepopulated by the IDOE into the School Corporation's Title I grant application each year back to School Corporation records in the student information system and program eligibility files, documentation could not be presented for audit that this verification occurred. There was also not an additional person reviewing the verification for accuracy. One person entered and posted vendor expenditures in the accounting system without a review in place to ensure the expenditures were posted to the correct fund, account, and object codes. Although additional employees were involved in the claims process either by submitting paper accounts payable vouchers, signing invoices, or approving purchase orders for some claims we reviewed, there was no review by a second person after the expenditures were entered into the accounting system. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation cannot ensure that the enrollment and poverty counts prepopulated into the School Corporation's Title I grant applications are accurate, nor can the School Corporation ensure that expenditures entered into the accounting system are coded correctly. Incorrect enrollment and poverty counts in the Title I application can lead to an incorrect amount of Title I funding being received by the School Corporation. Incorrect coding of expenditures in the accounting system can result in incorrect Maintenance of Effort calculations. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation strengthen its system of internal controls over the verification of enrollment and poverty counts prepopulated into the Title I grant application by having an additional person review the verification of the counts back to School Corporation records. We also recommended strengthening the School Corporation policies and procedures to ensure that appropriate supporting documentation of this verification and review is retained to be presented for audit. We further recommend that management of the School Corporation establish and implement an effective system of internal controls over vendor expenditures to ensure expenditures for vendors are posted to the correct fund, account, and object codes. For all vendor expenditures, we recommended they are reviewed by an individual other than the person entering them into the accounting system, along with the supporting documentation of the expenditure, and that this process is documented as to the preparer and reviewer. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2025-006 Subject: Title I Grants to Local Educational Agencies - Special Tests and Provisions - Annual Report Card, High School Graduation Rate Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A220014, S010A230014, S010A240014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Annual Report Card, High School Graduation Rate Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation is required to report graduation rate data for its public high school using the four-year adjusted cohort rate. To remove a student from the cohort, the School Corporation must confirm the reason for removal in writing. Additionally, required documentation for each removal type must be retained by the School Corporation. The School Corporation did not have effective internal controls to ensure required documentation to support the reason for a student's removal from the high school graduation cohort for mobility reasons was prepared, reviewed, and retained. Although one person updated the reason for a student's removal in the Student Information System, and another reviewed the documentation and approved the reason, the internal control was not sufficient to ensure compliance. Of the seven students tested, the School Corporation provided incorrect supporting documentation to substantiate the removal of two students from the cohort. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 20 USC 7801(23)(B) states: "To remove a student from a cohort, a school or local educational agency shall require documentation, or obtain documentation from the State educational agency, to confirm that the student has transferred out, emigrated to another country, or transferred to a prison or juvenile facility, or is deceased." INDIANA STATE BOARD OF ACCOUNTS 26 WAWASEE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause There were two instances we noted where proper documentation was not retained. For one of the instances, the employee preparing the documentation was aware of the documentation requirements for the mobility code used, the proper documentation was just not retained due to an oversight. For the other instance, the employee preparing the documentation was not aware of the documentation requirements of the specific mobility code used. Additionally, although the School Corporation had a documented internal control in place where one person updated the reason for a student's removal in the Student Information System, and another person reviewed the documentation and approved the reason, the internal control was not sufficient to ensure proper documentation was prepared, reviewed, and retained for all students removed from the cohort. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation cannot ensure proper documentation is maintained to support the removal of all students from the high school graduation cohort for mobility reasons. As a result, proper documentation was not maintained for all students removed from the cohort to support their removal. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation strengthen its system of internal controls over students' removal from the high school graduation cohort for mobility reasons by ensuring the documentation supporting each student's removal from the cohort for mobility reasons is in compliance with the different documentation requirements established by the Indiana Department of Education. We also recommended strengthening the School Corporation policies and procedures to ensure that appropriate supporting documentation is retained to be presented for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2025-007 Subject: Title I Grants to Local Educational Agencies - Special Tests and Provisions - Assessment System Security Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A220014, S010A230014, S010A240014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Assessment System Security Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 27 WAWASEE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context State educational agencies (SEA), in consultation with local educational agencies (LEA), are required to establish and maintain an assessment security system that is valid, reliable, and consistent with relevant professional and technical standards. Within its assessment system, SEAs must have policies and procedures to maintain test security measures and ensure that LEAs implement those policies and procedures. As such, the Indiana Department of Education created and published the Indiana Assessments Policy Manual. As a part of the assessment security, any individual who administers, handles, or has access to secure test materials at the school or school corporation shall complete assessment training and sign a testing security and integrity statement that remains on file in the appropriate building-level office each year. Each individual required to sign the testing integrity agreement shall sign the form by an established date. The School Corporation had a process to provide assessment system security training and to ensure each employee that attended training signed the agreement indicating training was received. However, there was no process in place to ensure that all school employees required to be trained were trained. Due to the lack of internal controls over ensuring employees requiring training received training, some employees that should have been trained were not. A sample of 27 employees required to receive training was selected for testing from the School Corporation's roster. Of the 27 employees tested, 2 did not receive the training as required. Additionally, 1 employee completed the training and signed the agreement, but it was completed 37 days late. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 511 IAC 5-5-5(b) states: "Any individual who administers, handles, or has access to secure test materials at the school or school corporation shall complete assessment training and sign a testing security and integrity agreement to remain on file in the appropriate building-level office each year." Cause There was not an internal control in place to ensure that all employees who were required to complete assessment training took the training and signed the agreement by the date established. The School Corporation was not aware that this was necessary, noting that they used a training platform to provide the training, which sends automated email reminders to employees to complete the training until it is completed. INDIANA STATE BOARD OF ACCOUNTS 28 WAWASEE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation cannot ensure all employees required to complete the training and sign the testing security and integrity statement do so by the established date. As a result, not all employees required to complete the assessment training and sign the testing security and integrity statement did so. Additionally, not all employees who completed the assessment training and signed the testing security and integrity statement did so by the established date. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish and implement an effective system of internal control over security assessment training which ensures that all employees required to complete the training and sign the testing security and integrity statement do so by the established date. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2025-008 Subject: Special Education Cluster (IDEA) - Matching, Level of Effort, Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 21611-113-PN01, 22611-113-PN01, 23611-113-PN01, 24611-113-PN01, H027X210084, 23619-113-PN01, 24619-113-PN01, 25619-113-PN01, 22619-113-ARP, 86203 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Finding: Material Weakness Condition and Context The Form 9 (financial) data was submitted by the School Corporation to the Indiana Department of Education (IDOE) semi-annually. The data reported included the School Corporation's expenditures recorded during that period. The IDOE calculated Maintenance of Effort based on the expenditure information submitted on Form 9 for that fiscal year. To verify amounts used by the IDOE in their computation were derived from the books and records of the School Corporation, costs were reviewed to ensure they were recorded properly as to account and object code and reported correctly on the Form 9. INDIANA STATE BOARD OF ACCOUNTS 29 WAWASEE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation did not have an oversight process in place to ensure that expenditures for vendors were posted to the correct fund, account, and object codes. During review of expenditures, it was determined that there was not a documented second review in place for all vendor payments being made. This issue was systemic throughout the audit period. 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause One person entered and posted vendor expenditures in the accounting system without a review in place to ensure the expenditures were posted to the correct fund, account, and object codes. Although additional employees were involved in the claims process either by submitting paper accounts payable vouchers, signing invoices, or approving purchase orders for some claims we reviewed, there was no review by a second person after the expenditures were entered into the accounting system. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation cannot ensure that expenditures entered into the accounting system are coded correctly. Incorrect coding of expenditures in the accounting system can result in incorrect Maintenance of Effort calculations. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish and implement an effective system of internal controls over vendor expenditures to ensure expenditures for vendors are posted to the correct fund, account, and object codes. For all vendor expenditures, we recommended they are reviewed by an individual other than the person entering them into the accounting system, along with the supporting documentation of the expenditure, and that this process is documented as to the preparer and reviewer. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.