Audit 5570

Identification of federal program: U.S. DEPARTMENT OF EDUCATION 84.425D Education Stabilization Fund COVID-19 Elementary and Secondary School Emergency Relief Fund (ESSER I and II) passed through the Indiana Department of Education.Criteria: 2 CFR 200.430(i) requires the auditee to establish and maintain effective internal control over the allocation of personnel expenses whereby charges to Federal awards for personnel-related expenditures are supported by official records of the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: The non-federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable and properly allocated.Condition: Personnel costs allocated to the award did not agree to time and effort reports maintained for those employees charged to the award.Cause: PPHS does not have a process whereby time and effort reports are reconciled to payroll allocated to federal awards.Effect: Time and effort reports documented that 100% of employee time should have been allocated to the award. However, some employees wages were only partially allocated to the award.Questioned costs: NoneContext: Six (6) out of seven (7) employees tested had time and effort reports noting that 100% of their time were to be allocated to the award. However, less than 100% of their wages were allocated to the award.Recommendation: We recommend that PPHS implement a process to reconcile personnel costs allocated to federal awards with time and effort reports. We further recommend this process be implemented as a part of the semimonthly payroll process.Views of Responsible Officials: See attached Corrective Action Plan.

Identification of federal program: FEDERAL COMMUNICATIONS COMMISSION 32.009 Emergency Connectivity Fund Program passed through the Indiana Department of Education. Criteria: According to 2 CFR Subpart F Section 200.510b, the auditee must preapre a Schedule of Expenditures of Federal Awards (SEFA) for the period that includes all amounts spent on federal programs during the reporting period.Condition: The SEFA excluded the Emergency Connectivity Fund Program and was materially understated by $81,750.Cause: Grant agreements were not stored in a centralized location accessible to key members of management and the outsourced accountant.Effect: An audit adjustment was made to increase grant receivable and revenue by $494,757 in 2021 and adjust 2022 grant receivable, net assets with donor restriction, and revenue.Recommendation: PPHS should implement a review process for the SEFA whereby key members of management review the SEFA for completeness.Views of responsible officials: See attached corrective action plan.

Identification of federal program: U.S. DEPARTMENT OF EDUCATION 84.425D Education Stabilization Fund COVID-19 Elementary and Secondary School Emergency Relief Fund (ESSER I and II) passed through the Indiana Department of Education.Criteria: 2 CFR 200.430(i) requires the auditee to establish and maintain effective internal control over the allocation of personnel expenses whereby charges to Federal awards for personnel-related expenditures are supported by official records of the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: The non-federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable and properly allocated.Condition: Personnel costs allocated to the award did not agree to time and effort reports maintained for those employees charged to the award.Cause: PPHS does not have a process whereby time and effort reports are reconciled to payroll allocated to federal awards.Effect: Time and effort reports documented that 100% of employee time should have been allocated to the award. However, some employees wages were only partially allocated to the award.Questioned costs: NoneContext: Six (6) out of seven (7) employees tested had time and effort reports noting that 100% of their time were to be allocated to the award. However, less than 100% of their wages were allocated to the award.Recommendation: We recommend that PPHS implement a process to reconcile personnel costs allocated to federal awards with time and effort reports. We further recommend this process be implemented as a part of the semimonthly payroll process.Views of Responsible Officials: See attached Corrective Action Plan.

Identification of federal program: FEDERAL COMMUNICATIONS COMMISSION 32.009 Emergency Connectivity Fund Program passed through the Indiana Department of Education. Criteria: According to 2 CFR Subpart F Section 200.510b, the auditee must preapre a Schedule of Expenditures of Federal Awards (SEFA) for the period that includes all amounts spent on federal programs during the reporting period.Condition: The SEFA excluded the Emergency Connectivity Fund Program and was materially understated by $81,750.Cause: Grant agreements were not stored in a centralized location accessible to key members of management and the outsourced accountant.Effect: An audit adjustment was made to increase grant receivable and revenue by $494,757 in 2021 and adjust 2022 grant receivable, net assets with donor restriction, and revenue.Recommendation: PPHS should implement a review process for the SEFA whereby key members of management review the SEFA for completeness.Views of responsible officials: See attached corrective action plan.