Audit 43527

FY End
2022-06-30
Total Expended
$7.45M
Findings
2
Programs
22
Organization: Brown County Schools (IN)
Year: 2022 Accepted: 2023-03-28

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
51255 2022-001 Material Weakness - N
627697 2022-001 Material Weakness - N

Contacts

Name Title Type
L8J3LLEZRD87 Dawn Ray Auditee
8129886601 Beth Kelley, CPA Auditor
No contacts on file

Notes to SEFA

Accounting Policies: Note 1. Summary of Significant Accounting PoliciesA. Basis of PresentationThe accompanying Schedule of Expenditures of Federal Awards (SEFA) includes the federalgrant activity of the School Corporation under programs of the federal government for theyears ended June 30, 2021 and 2022. The information in the SEFA is presented inaccordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200,Uniform Administrative Requirements, Cost Principles, and Audit Requirements for FederalAwards (Uniform Guidance). Because the SEFA presents only a select portion of theoperations of the School Corporation, it is not intended to and does not present the financialposition of the School Corporation.The Uniform Guidance requires an annual audit of nonfederal entities expending a totalamount of federal awards equal to or in excess of $750,000 in any fiscal year unless byconstitution or statute a less frequent audit is required. In accordance with Indiana Code(IC 5-11-1-25), audits of school corporations shall be conducted biennially. Such audits shallinclude both years within the biennial period.B. Other Significant Accounting PoliciesExpenditures reported on the SEFA are reported on the cash basis of accounting. Suchexpenditures are recognized following, as applicable, either the cost principles in OMBCircular A-87, Cost Principles for State, Local, and Indian Tribal Governments, or the costprinciples contained in the Uniform Guidance, wherein certain types of expenditures are notallowed or are limited as to reimbursement. When federal grants are received on areimbursement basis, the federal awards are considered expended when the reimbursementis received. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate.

Finding Details

FINDING 2022-001 Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425U Federal Award Number and Year (or Other Identifying Numbers): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Finding: Material Weakness Condition and Context An effective internal control system, which would include segregation of duties, 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 requirement. Certified contractor payrolls related to the construction project were obtained by the School Corporation with no documented review or oversight process in place to ensure their accuracy and compliance. The lack of internal controls was a systemic issue which occurred 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). . . ." Cause Management had not developed a system of internal controls over the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Effect The failure to establish an effective internal control system places the School Corporation at risk of noncompliance with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls, including segregation of duties, related to the grant agreement and the Special Tests and Provisions ? Wage Rate Requirements compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-001 Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425U Federal Award Number and Year (or Other Identifying Numbers): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Finding: Material Weakness Condition and Context An effective internal control system, which would include segregation of duties, 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 requirement. Certified contractor payrolls related to the construction project were obtained by the School Corporation with no documented review or oversight process in place to ensure their accuracy and compliance. The lack of internal controls was a systemic issue which occurred 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). . . ." Cause Management had not developed a system of internal controls over the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Effect The failure to establish an effective internal control system places the School Corporation at risk of noncompliance with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls, including segregation of duties, related to the grant agreement and the Special Tests and Provisions ? Wage Rate Requirements compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.