FINDING 2023-003
Subject: COVID-19 – Education Stabilization Fund –Allowable Costs/Cost Principles
Summary of Finding:
Condition and Context
The American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER) Fund
provided funding to States and school districts to help safely reo...
FINDING 2023-003
Subject: COVID-19 – Education Stabilization Fund –Allowable Costs/Cost Principles
Summary of Finding:
Condition and Context
The American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER) Fund
provided funding to States and school districts to help safely reopen and sustain the safe operation of
schools and to address the impact of the coronavirus pandemic on the nation’s students. States were
required to subgrant a portion of their ARP ESSER allocation to local educational agencies (LEA). Prior to
LEAs receiving their respective subgrants, LEAs were required to complete an application for ARP
ESSER funding, which was submitted to the Indiana Department of Education (IDOE), the pass-through
entity for approval. The application included a district level budget identifying how the LEA intended to
spend program funds. Per the School Corporation’s approved application, program funding was budgeted
for salaries and respective benefits for Director of Student Support, Title I Aide, Career Coach, Summer
School Positions, and a Social Emotional Academic Learning Liaison, as well as for equipment as
classified under the facilities acquisition and construction expenditure account. The School Corporation
noted on their application that the funds budgeted for equipment were strictly for the costs of the
equipment and did not include any costs for labor.
A sample of 31 claims charged to the ARP ESSER program for which reimbursement was received
during the audit period was selected for testing to verify the expenditures were in conformance with the
applicable cost principles. Of the 31 claims tested, four claims totaling $693,454, each of which were paid
to the same contractor, included costs for labor and project management related to air handling units in
multiple buildings. Due to the magnitude of the exceptions identified, all remaining payments made to this
contractor for which the School Corporation received reimbursement during the audit period were
abstracted and reviewed. Upon review of these claims, additional labor and project management costs of
$306,745 were identified. The aggregate total of $1,000,199 expended for labor and project management
costs are considered questioned costs as they were not approved by IDOE prior to being expended as
required by the terms and conditions of the federal award.
In addition, the School Corporation submitted twice to IDOE, four different invoices for expenditures
related to the ARP ESSER program. As a result, the School Corporation received duplicate
reimbursements for the expenditures on each of the four invoices, resulting in the School Corporation
receiving $50,000 more than their approved allocation of ARP ESSER funding. The management of the
School was aware of this error; however, did not contact IDOE to resolve the issue, nor did they return
the funds to the State.
Lastly, the School Corporation submitted to IDOE a request for reimbursement for expenditures totaling
$12,113 for the Governor Emergency Education Relief Fund (GEER) program. The School Corporation
received the reimbursement of $12,113 twice from IDOE. This resulted in the School Corporation
receiving an extra $12,113 of GEER funding that they should not have received. The management of the
INDIANA STATE BOARD OF ACCOUNTS
38
Culver Community Schools Corporation
Karen Shuman, Superintendent
www.culver.k12.in.us
700 School Street Aubbeenaubbee Township – Fulton County
Culver, IN 46511-0231 North Bend Township – Starke County
Phone (574) 842-3364 Tippecanoe Township – Pulaski County
Fax (574) 842-4615 Union Township – Marshall County
_________________________________________________________________
School was aware of this duplicate payment received from IDOE; however, did not contact IDOE to
resolve the issue, nor did they return the funds to the State.
Recommendation
We recommended that management of the School Corporation establish a proper system of internal
controls and develop policies and procedures to ensure costs are included in the approved budget, are
only requested once, and are not retained if received in error.
Contact Person Responsible for Corrective Action: Casey Howard
Contact Phone Number: 574-842-3364 x806
Views of the Responsible Officials:
We concur with the finding.
Description of Corrective Action Plan:
The Superintendent, Treasurer, Deputy-Treasurer and/or Grant writer will review all
grant applications prior to submission. Upon grant approval the same parties will again
review approval and review dollar amounts, allowable expenses, etc.
The Superintendent, Treasurer, Deputy-Treasurer and/or Grant Writer will review all
grant reimbursements and monitor/finance reports prior to submission.
A grant amendment has been requested in January 2024 to include additional allowable
expenses.
Anticipated Completion Date: February 2024
INDIANA STATE