FAC Explorer

Audit 56049

FY End
2022-06-30
Total Expended
$11.53M
Findings
2
Programs
24
Organization: School City of Hobart (IN)
Year: 2022 Accepted: 2023-02-09
Auditor: Indiana State Board of Accounts

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
59394 2022-003 Material Weakness - F
635836 2022-003 Material Weakness - F

Programs

ALN Program Spent Major Findings
84.425 Education Stabilization Fund 22 $894,882 Yes 1
84.027 Special Education_grants to States 21 $840,073 - 0
84.010 Title I Grants to Local Educational Agencies 21 $698,872 Yes 0
84.010 Title I Grants to Local Educational Agencies 22 $632,018 Yes 0
10.559 Summer Food Service Program for Children 21 $476,018 Yes 0
10.553 School Breakfast Program 22 $306,633 Yes 0
84.425 Education Stabilization Fund 21 $286,502 Yes 0
10.559 Summer Food Service Program for Children 22 $219,771 Yes 0
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) 22 $181,939 - 0
84.367 Improving Teacher Quality State Grants 21 $156,715 - 0
84.367 Improving Teacher Quality State Grants 22 $144,151 - 0
84.027 Special Education_grants to States 22 $81,277 - 0
93.778 Medical Assistance Program 22 $56,536 - 0
10.555 National School Lunch Program 22 $41,773 Yes 0
84.424 Student Support and Academic Enrichment Program 21 $41,450 - 0
84.424 Student Support and Academic Enrichment Program 22 $22,731 - 0
93.778 Medical Assistance Program 21 $21,247 - 0
10.555 National School Lunch Program 21 $16,947 Yes 0
84.173 Special Education_preschool Grants 21 $15,784 - 0
84.173 Special Education_preschool Grants 22 $5,881 - 0
11.419 Coastal Zone Management Administration Awards 21 $4,355 - 0
11.419 Coastal Zone Management Administration Awards 22 $3,866 - 0
10.553 School Breakfast Program 21 $3,710 Yes 0
10.649 Pandemic Ebt Administrative Costs 22 $3,063 - 0

Contacts

Name Title Type
WCF8NW6R21P5 Dawn Powers Auditee
2199450250 Beth Kelley, CPA Auditor
No contacts on file

Notes to SEFA

Title: Note 3. Special Education Cooperative 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 a reimbursementbasis, the federal awards are considered expended when the reimbursement isreceived. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The School Corporation is a member of the Northwest Indiana Special Education Cooperative (Cooperative). As a result, the activity for the Special Education Cluster (IDEA) that is presented on the SEFA is not presented as receipts and disbursements in the financial statement for the School Corporation. This activity is presented in the financial statement of the Cooperative's fiscal agent.

Finding Details

Finding 2022-003
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Number and Year (or Other Identifying Number): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. During fiscal year 2021-2022, the School Corporation purchased $62,769 of equipment with ESSER III funds which exceeded the School Corporation's capitalization threshold. The equipment was not added to the property record or capital asset listing which would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. The lack of internal controls and noncompliance were isolated to the property record or capital asset listing for 2021-2022. 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). . . ." 2 CFR 200.313(d)(1) states: "Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property." Cause Management had not developed a system of internal control that would have ensured compliance with the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management 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 2022-003
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Number and Year (or Other Identifying Number): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. During fiscal year 2021-2022, the School Corporation purchased $62,769 of equipment with ESSER III funds which exceeded the School Corporation's capitalization threshold. The equipment was not added to the property record or capital asset listing which would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. The lack of internal controls and noncompliance were isolated to the property record or capital asset listing for 2021-2022. 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). . . ." 2 CFR 200.313(d)(1) states: "Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property." Cause Management had not developed a system of internal control that would have ensured compliance with the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.