FINDING 2022-006 Subject: Title I Grants to Local Educational Agencies - Cash Management and Reporting 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): S010A190014, S010A200014, S010A210014 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Cash Management, Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding related to Reporting from the immediately prior audit report. The prior audit finding number was 2020-007. INDIANA STATE BOARD OF ACCOUNTS 32 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with the requirements related to the grant agreement and the Cash Management and the Reporting compliance requirements. The School Corporation filed the required special reports with the Indiana Department of Education; however, none of the reports were supported by the School Corporation's records. Although the Title I Director reviewed the requests for reimbursement and the Final Expenditure Reports, the reviews did not ensure that the reports agreed to the School Corporation's financial records. The 2019-2020 and 2020-2021 Final Expenditure Reports and the four reimbursement requests tested could not be traced to the School Corporation's records. 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). . . ." 2 CFR 200.333 (Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) (Uniform Guidance) states in part: . . . "The financial management system of each non-Federal entity must provide for the following: INDIANA STATE BOARD OF ACCOUNTS 33 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 2 CFR 200.305(b) (Uniform Guidance) states in part: "For non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. . . . (3) Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per ? 200.207 Specific conditions, or when the non-Federal entity requests payment by reimbursement. . . ." 2 CFR 200.305(b) (Revised Uniform Guidance) states in part: "For non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. . . . (3) Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per ? 200.208, or when the non-Federal entity requests payment by reimbursement. . . ." Cause Management had not established an effective system of internal controls that would have ensured compliance with requirements related to the Cash Management and the Reporting compliance requirements. INDIANA STATE BOARD OF ACCOUNTS 34 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective system of internal controls and to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirements listed above. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure documentation be maintained and made available for audit related to the grant agreement and the Cash Management and the Reporting compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-008 Subject: Title I Grants to Local Educational Agencies - Earmarking 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): S010A190014, S010A200014, S010A210014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-008. 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 earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Officials of the School Corporation were unaware that the earmarking requirement for Parental Involvement was a mandatory spending requirement. Therefore, there were no internal controls in place related to this requirement nor was the required amounts spent for parental involvement. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 37 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.400 states in part: ". . . (a) The non-Federal entity is responsible for the efficient and effective administration of the Federal award through the application of sound management practices. (b) The non-Federal entity assumes responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. . . ." 2 CFR 200.207 (Uniform Guidance) states in part: "The Federal Awarding Agency or pass-through entity may impose additional specific award conditions as needed . . ." 2 CFR 200.208(b) (Revised Uniform Guidance) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." Cause Management had not developed a system of internal controls that would have ensured compliance with the earmarking requirements of the Matching, Level of Effort, and Earmarking compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement could result in the loss of future 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 Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2 CFR ? 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR ? 200.102(a) and 2 CFR ? 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. The Ohio Department of Education requires school districts to file a Final Expenditure Report each year by September 30, unless stated otherwise in the grant application. ODE further requires subgrantees to obligate funds within the approved project period as set forth in the approved application and to liquidate said obligations not later than 90 days after the end of the project period for electronic applications for grants. ODE also requires all allowable grant expenditures obligated by the project end date and liquidated no later than 90 days after the end of the project period as designated in the grant agreement to be reported in the FER. The District did file the Final Expenditure Report with ODE before the required reporting deadline, however, due to deficiencies in the internal policies and procedures over Federal compliance, the District did not report expenditures obligated after fiscal year end and prior to the project end date for the Assistance Listing #84.425U American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) Fund grant, resulting in expenditures being underreported in the amount of $51,114. In addition, the District did not report any Assistance Listing #84.425D Elementary and Secondary School Emergency Relief (ESSER I) Fund expenditures, totaling $2,843, that occurred during the fiscal year. Failure to file accurate financial information in the Final Expenditure Report could lead to material misstatements and could impact future grant funding. The District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
2 CFR ? 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR ? 200.102(a) and 2 CFR ? 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. The Ohio Department of Education requires school districts to file a Final Expenditure Report each year by September 30, unless stated otherwise in the grant application. ODE further requires subgrantees to obligate funds within the approved project period as set forth in the approved application and to liquidate said obligations not later than 90 days after the end of the project period for electronic applications for grants. ODE also requires all allowable grant expenditures obligated by the project end date and liquidated no later than 90 days after the end of the project period as designated in the grant agreement to be reported in the FER. The District did file the Final Expenditure Report with ODE before the required reporting deadline, however, due to deficiencies in the internal policies and procedures over Federal compliance, the District did not report expenditures obligated after fiscal year end and prior to the project end date for the Assistance Listing #84.425U American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) Fund grant, resulting in expenditures being underreported in the amount of $51,114. In addition, the District did not report any Assistance Listing #84.425D Elementary and Secondary School Emergency Relief (ESSER I) Fund expenditures, totaling $2,843, that occurred during the fiscal year. Failure to file accurate financial information in the Final Expenditure Report could lead to material misstatements and could impact future grant funding. The District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
2 CFR ? 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200, except for 2 CFR ? 200.102(a) and 2 CFR ? 200.207(a). Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE. The Ohio Department of Education requires school districts to file a Final Expenditure Report each year by September 30, unless stated otherwise in the grant application. ODE further requires subgrantees to obligate funds within the approved project period as set forth in the approved application and to liquidate said obligations not later than 90 days after the end of the project period for electronic applications for grants. ODE also requires all allowable grant expenditures obligated by the project end date and liquidated no later than 90 days after the end of the project period as designated in the grant agreement to be reported in the FER. The District did file the Final Expenditure Report with ODE before the required reporting deadline, however, due to deficiencies in the internal policies and procedures over Federal compliance, the District did not report expenditures obligated after fiscal year end and prior to the project end date for the Assistance Listing #84.425U American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) Fund grant, resulting in expenditures being underreported in the amount of $51,114. In addition, the District did not report any Assistance Listing #84.425D Elementary and Secondary School Emergency Relief (ESSER I) Fund expenditures, totaling $2,843, that occurred during the fiscal year. Failure to file accurate financial information in the Final Expenditure Report could lead to material misstatements and could impact future grant funding. The District should review the Final Expenditure Report before submission to help ensure all required amounts are included.
FINDING 2022-006 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 19611-014-PN01, 19619-014-PN01, 20611-014-PN01, 20619-014-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-011. Condition and Context The School Corporation had not established an effective internal control system to ensure the earmarking requirements for the Coordinated Early Intervening Services (CEIS) and the Non-Public Proportionate Share were met. Coordinated Early Intervening Services (CEIS) When an LEA is identified with significant disproportionality, they are required to expend exactly 15 percent of their total combined 611 and 619 allocation on CEIS expenses. The School Corporation had a mandatory CEIS amount of $254,650 for the 19611-014-PN01 grant. Per the submitted CEIS monitoring report, expenses related to CEIS were $273,292; however, no supporting documentation was provided with the report to substantiate this amount. Furthermore, the ledgers had expenses of $324,522 related to CEIS. As such we could not determine the amount spent for CEIS. Additionally, no documented review of the CEIS amounts expended was provided for audit to ensure the School Corporation would meet, but not exceed the required amount. The lack of internal controls, availability of supporting documentation, and noncompliance were isolated to the 19611-014-PN01 grant award. Non-Public Proportionate Share Proportionate share is an amount of funds that must be expended on special education or related services for parentally-placed private school and homeschooled students. Supporting documentation was not provided to substantiate the amounts reported as expensed for the nonpublic students. However, based on the expenses reported in the ledgers related to nonpublic schools, the required earmarking amounts for nonpublic proportionate share for the 19619-014-PN01, 20611-014-PN01, or 20619-014-PN01 grants was not spent. Additionally, no documented review of the amounts expended for proportionate share was provided for audit to ensure the School Corporation would spend the required amount. The lack of internal controls, availability of supporting documentation, and noncompliance were isolated to the 19619-014-PN01, 20611-014-PN01, and 20619-014-PN01 grant awards. 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). . . ." 34 CFR 300.226(a) states: "General. An LEA may not use more than 15 percent of the amount the LEA receives under Part B of the Act for any fiscal year, less any amount reduced by the LEA pursuant to ? 300.205, if any, in combination with other amounts (which may include amounts other than education funds), to develop and implement coordinated, early intervening services, which may include interagency financing structures, for students in kindergarten through grade 12 (with a particular emphasis on students in kindergarten through grade three) who are not currently identified as needing special education or related services, but who need additional academic and behavioral support to succeed in a general education environment. (See appendix D for examples of how ? 300.205(d), regarding local maintenance of effort, and ? 300.226(a) affect one another.)" 2 CFR 200.207(a) states in part: "The Federal awarding agency or pass-through entity may impose additional specific award conditions as needed. . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools and facilities, must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools or facilities within its boundaries, is to the total number of students with disabilities of the same age range." Cause Management had not established an effective system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, with the grant agreement and the Matching, Level of Effort, Earmarking compliance requirement. Effect The failure to design and implement an effective system of internal controls and to retain supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirement listed above. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and to comply with the grant agreement and the Matching, Level of Effort, Earmarking, 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 2022-007 Subject: Special Education Cluster (IDEA) - Reporting Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 19611-014-PN01, 19619-014-PN01, 20611-014-PN01, 20619-014-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context Reimbursement requests are submitted through the Indiana Department of Education information portal after review by the Executive Director of the Elkhart County Special Education Cooperative and the School Corporation's Treasurer. Supporting documentation was not provided to substantiate the amounts reported on the reimbursement requests. Ledgers provided during the audit were used to determine amounts requested by abstracting the expenses for each Special Education Fund. However, upon testing of the reimbursement requests it was determined that the documentation, or lack thereof, accompanying the reimbursement requests was not sufficient to prevent or detect noncompliance. Therefore, an internal control had not been properly designed and implemented. ? 19611-014-PN01 - Reimbursement request totaled $105,205, and ledger detail provided for audit totaled $110,703, with a variance of $5,498 recorded in the ledger but not requested for reimbursement. ? 20611-014-PN01 - Reimbursement request totaled $638,466, and ledger detail provided for audit totaled $597,441, with a variance of $41,025 over requested on the reimbursement. ? 19619-014-PN01 - Reimbursement request totaled $71,486, and ledger detail provided for audit totaled $69,527, with a variance of $1,959 over requested on the reimbursement. ? 20619-014-PN01 - Reimbursement request totaled $72,589, and ledger detail provided for audit totaled $72,031, with a variance of $558 over requested on the reimbursement. The lack of internal controls, availability of supporting documentation, 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). . . ." 2 CFR 200.207(a) states in part: "The Federal awarding agency or pass-through entity may impose additional specific award conditions as needed, . . ." 2 CFR 200.327 states: "Unless otherwise approved by OMB, the Federal awarding agency may solicit only the standard, OMB-approved governmentwide data elements for collection of financial information (at time of publication the Federal Financial Report or such future collections as may be approved by OMB and listed on the OMB Web site). This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting." Cause Management had not established an effective system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, with the grant agreement and the Reporting compliance requirement. Effect The failure to design and implement an effective internal control system and to retain supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirement listed above. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and to comply with the grant agreement and the Reporting 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 2022-006 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 19611-014-PN01, 19619-014-PN01, 20611-014-PN01, 20619-014-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-011. Condition and Context The School Corporation had not established an effective internal control system to ensure the earmarking requirements for the Coordinated Early Intervening Services (CEIS) and the Non-Public Proportionate Share were met. Coordinated Early Intervening Services (CEIS) When an LEA is identified with significant disproportionality, they are required to expend exactly 15 percent of their total combined 611 and 619 allocation on CEIS expenses. The School Corporation had a mandatory CEIS amount of $254,650 for the 19611-014-PN01 grant. Per the submitted CEIS monitoring report, expenses related to CEIS were $273,292; however, no supporting documentation was provided with the report to substantiate this amount. Furthermore, the ledgers had expenses of $324,522 related to CEIS. As such we could not determine the amount spent for CEIS. Additionally, no documented review of the CEIS amounts expended was provided for audit to ensure the School Corporation would meet, but not exceed the required amount. The lack of internal controls, availability of supporting documentation, and noncompliance were isolated to the 19611-014-PN01 grant award. Non-Public Proportionate Share Proportionate share is an amount of funds that must be expended on special education or related services for parentally-placed private school and homeschooled students. Supporting documentation was not provided to substantiate the amounts reported as expensed for the nonpublic students. However, based on the expenses reported in the ledgers related to nonpublic schools, the required earmarking amounts for nonpublic proportionate share for the 19619-014-PN01, 20611-014-PN01, or 20619-014-PN01 grants was not spent. Additionally, no documented review of the amounts expended for proportionate share was provided for audit to ensure the School Corporation would spend the required amount. The lack of internal controls, availability of supporting documentation, and noncompliance were isolated to the 19619-014-PN01, 20611-014-PN01, and 20619-014-PN01 grant awards. 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). . . ." 34 CFR 300.226(a) states: "General. An LEA may not use more than 15 percent of the amount the LEA receives under Part B of the Act for any fiscal year, less any amount reduced by the LEA pursuant to ? 300.205, if any, in combination with other amounts (which may include amounts other than education funds), to develop and implement coordinated, early intervening services, which may include interagency financing structures, for students in kindergarten through grade 12 (with a particular emphasis on students in kindergarten through grade three) who are not currently identified as needing special education or related services, but who need additional academic and behavioral support to succeed in a general education environment. (See appendix D for examples of how ? 300.205(d), regarding local maintenance of effort, and ? 300.226(a) affect one another.)" 2 CFR 200.207(a) states in part: "The Federal awarding agency or pass-through entity may impose additional specific award conditions as needed. . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools and facilities, must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools or facilities within its boundaries, is to the total number of students with disabilities of the same age range." Cause Management had not established an effective system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, with the grant agreement and the Matching, Level of Effort, Earmarking compliance requirement. Effect The failure to design and implement an effective system of internal controls and to retain supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirement listed above. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and to comply with the grant agreement and the Matching, Level of Effort, Earmarking, 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 2022-007 Subject: Special Education Cluster (IDEA) - Reporting Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 19611-014-PN01, 19619-014-PN01, 20611-014-PN01, 20619-014-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context Reimbursement requests are submitted through the Indiana Department of Education information portal after review by the Executive Director of the Elkhart County Special Education Cooperative and the School Corporation's Treasurer. Supporting documentation was not provided to substantiate the amounts reported on the reimbursement requests. Ledgers provided during the audit were used to determine amounts requested by abstracting the expenses for each Special Education Fund. However, upon testing of the reimbursement requests it was determined that the documentation, or lack thereof, accompanying the reimbursement requests was not sufficient to prevent or detect noncompliance. Therefore, an internal control had not been properly designed and implemented. ? 19611-014-PN01 - Reimbursement request totaled $105,205, and ledger detail provided for audit totaled $110,703, with a variance of $5,498 recorded in the ledger but not requested for reimbursement. ? 20611-014-PN01 - Reimbursement request totaled $638,466, and ledger detail provided for audit totaled $597,441, with a variance of $41,025 over requested on the reimbursement. ? 19619-014-PN01 - Reimbursement request totaled $71,486, and ledger detail provided for audit totaled $69,527, with a variance of $1,959 over requested on the reimbursement. ? 20619-014-PN01 - Reimbursement request totaled $72,589, and ledger detail provided for audit totaled $72,031, with a variance of $558 over requested on the reimbursement. The lack of internal controls, availability of supporting documentation, 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). . . ." 2 CFR 200.207(a) states in part: "The Federal awarding agency or pass-through entity may impose additional specific award conditions as needed, . . ." 2 CFR 200.327 states: "Unless otherwise approved by OMB, the Federal awarding agency may solicit only the standard, OMB-approved governmentwide data elements for collection of financial information (at time of publication the Federal Financial Report or such future collections as may be approved by OMB and listed on the OMB Web site). This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting." Cause Management had not established an effective system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, with the grant agreement and the Reporting compliance requirement. Effect The failure to design and implement an effective internal control system and to retain supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirement listed above. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and to comply with the grant agreement and the Reporting 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 2022-006 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 19611-014-PN01, 19619-014-PN01, 20611-014-PN01, 20619-014-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-011. Condition and Context The School Corporation had not established an effective internal control system to ensure the earmarking requirements for the Coordinated Early Intervening Services (CEIS) and the Non-Public Proportionate Share were met. Coordinated Early Intervening Services (CEIS) When an LEA is identified with significant disproportionality, they are required to expend exactly 15 percent of their total combined 611 and 619 allocation on CEIS expenses. The School Corporation had a mandatory CEIS amount of $254,650 for the 19611-014-PN01 grant. Per the submitted CEIS monitoring report, expenses related to CEIS were $273,292; however, no supporting documentation was provided with the report to substantiate this amount. Furthermore, the ledgers had expenses of $324,522 related to CEIS. As such we could not determine the amount spent for CEIS. Additionally, no documented review of the CEIS amounts expended was provided for audit to ensure the School Corporation would meet, but not exceed the required amount. The lack of internal controls, availability of supporting documentation, and noncompliance were isolated to the 19611-014-PN01 grant award. Non-Public Proportionate Share Proportionate share is an amount of funds that must be expended on special education or related services for parentally-placed private school and homeschooled students. Supporting documentation was not provided to substantiate the amounts reported as expensed for the nonpublic students. However, based on the expenses reported in the ledgers related to nonpublic schools, the required earmarking amounts for nonpublic proportionate share for the 19619-014-PN01, 20611-014-PN01, or 20619-014-PN01 grants was not spent. Additionally, no documented review of the amounts expended for proportionate share was provided for audit to ensure the School Corporation would spend the required amount. The lack of internal controls, availability of supporting documentation, and noncompliance were isolated to the 19619-014-PN01, 20611-014-PN01, and 20619-014-PN01 grant awards. 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). . . ." 34 CFR 300.226(a) states: "General. An LEA may not use more than 15 percent of the amount the LEA receives under Part B of the Act for any fiscal year, less any amount reduced by the LEA pursuant to ? 300.205, if any, in combination with other amounts (which may include amounts other than education funds), to develop and implement coordinated, early intervening services, which may include interagency financing structures, for students in kindergarten through grade 12 (with a particular emphasis on students in kindergarten through grade three) who are not currently identified as needing special education or related services, but who need additional academic and behavioral support to succeed in a general education environment. (See appendix D for examples of how ? 300.205(d), regarding local maintenance of effort, and ? 300.226(a) affect one another.)" 2 CFR 200.207(a) states in part: "The Federal awarding agency or pass-through entity may impose additional specific award conditions as needed. . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools and facilities, must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools or facilities within its boundaries, is to the total number of students with disabilities of the same age range." Cause Management had not established an effective system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, with the grant agreement and the Matching, Level of Effort, Earmarking compliance requirement. Effect The failure to design and implement an effective system of internal controls and to retain supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirement listed above. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and to comply with the grant agreement and the Matching, Level of Effort, Earmarking, 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 2022-007 Subject: Special Education Cluster (IDEA) - Reporting Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 19611-014-PN01, 19619-014-PN01, 20611-014-PN01, 20619-014-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context Reimbursement requests are submitted through the Indiana Department of Education information portal after review by the Executive Director of the Elkhart County Special Education Cooperative and the School Corporation's Treasurer. Supporting documentation was not provided to substantiate the amounts reported on the reimbursement requests. Ledgers provided during the audit were used to determine amounts requested by abstracting the expenses for each Special Education Fund. However, upon testing of the reimbursement requests it was determined that the documentation, or lack thereof, accompanying the reimbursement requests was not sufficient to prevent or detect noncompliance. Therefore, an internal control had not been properly designed and implemented. ? 19611-014-PN01 - Reimbursement request totaled $105,205, and ledger detail provided for audit totaled $110,703, with a variance of $5,498 recorded in the ledger but not requested for reimbursement. ? 20611-014-PN01 - Reimbursement request totaled $638,466, and ledger detail provided for audit totaled $597,441, with a variance of $41,025 over requested on the reimbursement. ? 19619-014-PN01 - Reimbursement request totaled $71,486, and ledger detail provided for audit totaled $69,527, with a variance of $1,959 over requested on the reimbursement. ? 20619-014-PN01 - Reimbursement request totaled $72,589, and ledger detail provided for audit totaled $72,031, with a variance of $558 over requested on the reimbursement. The lack of internal controls, availability of supporting documentation, 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). . . ." 2 CFR 200.207(a) states in part: "The Federal awarding agency or pass-through entity may impose additional specific award conditions as needed, . . ." 2 CFR 200.327 states: "Unless otherwise approved by OMB, the Federal awarding agency may solicit only the standard, OMB-approved governmentwide data elements for collection of financial information (at time of publication the Federal Financial Report or such future collections as may be approved by OMB and listed on the OMB Web site). This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting." Cause Management had not established an effective system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, with the grant agreement and the Reporting compliance requirement. Effect The failure to design and implement an effective internal control system and to retain supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirement listed above. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and to comply with the grant agreement and the Reporting 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 2022-006 Information on the federal program: 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 Listing Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A170014; S010A190014; S010A200014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Assessment System Security Audit Findings: Significant Deficiency 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 providesreasonable assurance that the non-Federal entity is managing the Federal award in compliancewith Federal statutes, regulations, and the terms and conditions of the Federal award. Theseinternal controls should be in compliance with guidance in 'Standards for Internal Control in theFederal Government' issued by the Comptroller General of the United States or the 'Internal ControlIntegrated Framework', issued by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO). . . ." 2 CFR 200.207(a) states in part: "The Federal awarding agency or pass-through entity may impose additional specific award conditions as needed. . . ." 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." Condition: An effective internal control system 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 - Assessment System Security compliance requirement. Cause: Management had not developed a system of internal controls that would have ensured compliance with the Special Tests and Provisions - Assessment System Security compliance requirement. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and Provisions - Assessment System Security compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had not established effective internal controls to ensure applicable employees received proper training over test and security administration. The School Corporation had implemented a policy in which all applicable employees were to be provided training annually. However, documentation of training for six of 40 employees could not be provided. The six employees were in a position and location that had contact with the testing materials and therefore should have received the training. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No Recommendation: We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and Special Tests and Provisions - Assessment System Security compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-006 Information on the federal program: 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 Listing Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A170014; S010A190014; S010A200014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Assessment System Security Audit Findings: Significant Deficiency 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 providesreasonable assurance that the non-Federal entity is managing the Federal award in compliancewith Federal statutes, regulations, and the terms and conditions of the Federal award. Theseinternal controls should be in compliance with guidance in 'Standards for Internal Control in theFederal Government' issued by the Comptroller General of the United States or the 'Internal ControlIntegrated Framework', issued by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO). . . ." 2 CFR 200.207(a) states in part: "The Federal awarding agency or pass-through entity may impose additional specific award conditions as needed. . . ." 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." Condition: An effective internal control system 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 - Assessment System Security compliance requirement. Cause: Management had not developed a system of internal controls that would have ensured compliance with the Special Tests and Provisions - Assessment System Security compliance requirement. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and Provisions - Assessment System Security compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had not established effective internal controls to ensure applicable employees received proper training over test and security administration. The School Corporation had implemented a policy in which all applicable employees were to be provided training annually. However, documentation of training for six of 40 employees could not be provided. The six employees were in a position and location that had contact with the testing materials and therefore should have received the training. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No Recommendation: We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and Special Tests and Provisions - Assessment System Security compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-006 Information on the federal program: 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 Listing Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A170014; S010A190014; S010A200014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Assessment System Security Audit Findings: Significant Deficiency 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 providesreasonable assurance that the non-Federal entity is managing the Federal award in compliancewith Federal statutes, regulations, and the terms and conditions of the Federal award. Theseinternal controls should be in compliance with guidance in 'Standards for Internal Control in theFederal Government' issued by the Comptroller General of the United States or the 'Internal ControlIntegrated Framework', issued by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO). . . ." 2 CFR 200.207(a) states in part: "The Federal awarding agency or pass-through entity may impose additional specific award conditions as needed. . . ." 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." Condition: An effective internal control system 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 - Assessment System Security compliance requirement. Cause: Management had not developed a system of internal controls that would have ensured compliance with the Special Tests and Provisions - Assessment System Security compliance requirement. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and Provisions - Assessment System Security compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had not established effective internal controls to ensure applicable employees received proper training over test and security administration. The School Corporation had implemented a policy in which all applicable employees were to be provided training annually. However, documentation of training for six of 40 employees could not be provided. The six employees were in a position and location that had contact with the testing materials and therefore should have received the training. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No Recommendation: We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and Special Tests and Provisions - Assessment System Security compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Criteria 2 CFR 200.305 (b3): Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per ?200.207 Specific conditions, or when the non-Federal entity requests payment by reimbursement. Per the OMB Compliance Supplement, the non-Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass-through entity. Condition In testing compliance with the cash management compliance requirement, specifically the reimbursement-method, 40 individual expenditures were tested to compare the date the University made payment to a vendor for a selected expense transaction to the date the University requested sponsor reimbursement for the same transaction. Seven instances were noted in which the University paid the vendor after requesting and receiving reimbursement from the government, as shown in the chart below. See Schedule of Findings and Questioned Costs for chart/table This is a repeat of finding 2021-001, 2020-001, 2019-001, 2018-002 and 2017-002 in prior year audit reports. Cause Management?s current process to ensure that the reimbursement of expenditures occurs only after paying the vendor utilizes the assumption that vendors will be paid within 30 days, on average, of incurring the expense. Effect The University received Federal reimbursement prior to paying the vendors for the selected expenses. The reliance of the 30 day average time-frame allowed certain expenditures to be included in requests for reimbursement prior to being liquidated. Questioned Costs None as reimbursement was requested for allowable costs. Recommendation The University should revisit existing internal control procedures to ensure expenditures are paid in compliance with the Federal reimbursement requirements. We also recommend management discuss current cash management requirements with the OMB and the University?s cognizant agency to determine a solution that meets the needs of both parties. Management?s View and Corrective Action Plan Following these findings are management?s view and corrective action plan.
Criteria 2 CFR 200.305 (b3): Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per ?200.207 Specific conditions, or when the non-Federal entity requests payment by reimbursement. Per the OMB Compliance Supplement, the non-Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass-through entity. Condition In testing compliance with the cash management compliance requirement, specifically the reimbursement-method, 40 individual expenditures were tested to compare the date the University made payment to a vendor for a selected expense transaction to the date the University requested sponsor reimbursement for the same transaction. Seven instances were noted in which the University paid the vendor after requesting and receiving reimbursement from the government, as shown in the chart below. See Schedule of Findings and Questioned Costs for chart/table This is a repeat of finding 2021-001, 2020-001, 2019-001, 2018-002 and 2017-002 in prior year audit reports. Cause Management?s current process to ensure that the reimbursement of expenditures occurs only after paying the vendor utilizes the assumption that vendors will be paid within 30 days, on average, of incurring the expense. Effect The University received Federal reimbursement prior to paying the vendors for the selected expenses. The reliance of the 30 day average time-frame allowed certain expenditures to be included in requests for reimbursement prior to being liquidated. Questioned Costs None as reimbursement was requested for allowable costs. Recommendation The University should revisit existing internal control procedures to ensure expenditures are paid in compliance with the Federal reimbursement requirements. We also recommend management discuss current cash management requirements with the OMB and the University?s cognizant agency to determine a solution that meets the needs of both parties. Management?s View and Corrective Action Plan Following these findings are management?s view and corrective action plan.
Criteria 2 CFR 200.305 (b3): Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per ?200.207 Specific conditions, or when the non-Federal entity requests payment by reimbursement. Per the OMB Compliance Supplement, the non-Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass-through entity. Condition In testing compliance with the cash management compliance requirement, specifically the reimbursement-method, 40 individual expenditures were tested to compare the date the University made payment to a vendor for a selected expense transaction to the date the University requested sponsor reimbursement for the same transaction. Seven instances were noted in which the University paid the vendor after requesting and receiving reimbursement from the government, as shown in the chart below. See Schedule of Findings and Questioned Costs for chart/table This is a repeat of finding 2021-001, 2020-001, 2019-001, 2018-002 and 2017-002 in prior year audit reports. Cause Management?s current process to ensure that the reimbursement of expenditures occurs only after paying the vendor utilizes the assumption that vendors will be paid within 30 days, on average, of incurring the expense. Effect The University received Federal reimbursement prior to paying the vendors for the selected expenses. The reliance of the 30 day average time-frame allowed certain expenditures to be included in requests for reimbursement prior to being liquidated. Questioned Costs None as reimbursement was requested for allowable costs. Recommendation The University should revisit existing internal control procedures to ensure expenditures are paid in compliance with the Federal reimbursement requirements. We also recommend management discuss current cash management requirements with the OMB and the University?s cognizant agency to determine a solution that meets the needs of both parties. Management?s View and Corrective Action Plan Following these findings are management?s view and corrective action plan.
Criteria 2 CFR 200.305 (b3): Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per ?200.207 Specific conditions, or when the non-Federal entity requests payment by reimbursement. Per the OMB Compliance Supplement, the non-Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass-through entity. Condition In testing compliance with the cash management compliance requirement, specifically the reimbursement-method, 40 individual expenditures were tested to compare the date the University made payment to a vendor for a selected expense transaction to the date the University requested sponsor reimbursement for the same transaction. Seven instances were noted in which the University paid the vendor after requesting and receiving reimbursement from the government, as shown in the chart below. See Schedule of Findings and Questioned Costs for chart/table This is a repeat of finding 2021-001, 2020-001, 2019-001, 2018-002 and 2017-002 in prior year audit reports. Cause Management?s current process to ensure that the reimbursement of expenditures occurs only after paying the vendor utilizes the assumption that vendors will be paid within 30 days, on average, of incurring the expense. Effect The University received Federal reimbursement prior to paying the vendors for the selected expenses. The reliance of the 30 day average time-frame allowed certain expenditures to be included in requests for reimbursement prior to being liquidated. Questioned Costs None as reimbursement was requested for allowable costs. Recommendation The University should revisit existing internal control procedures to ensure expenditures are paid in compliance with the Federal reimbursement requirements. We also recommend management discuss current cash management requirements with the OMB and the University?s cognizant agency to determine a solution that meets the needs of both parties. Management?s View and Corrective Action Plan Following these findings are management?s view and corrective action plan.
Criteria 2 CFR 200.305 (b3): Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per ?200.207 Specific conditions, or when the non-Federal entity requests payment by reimbursement. Per the OMB Compliance Supplement, the non-Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass-through entity. Condition In testing compliance with the cash management compliance requirement, specifically the reimbursement-method, 40 individual expenditures were tested to compare the date the University made payment to a vendor for a selected expense transaction to the date the University requested sponsor reimbursement for the same transaction. Seven instances were noted in which the University paid the vendor after requesting and receiving reimbursement from the government, as shown in the chart below. See Schedule of Findings and Questioned Costs for chart/table This is a repeat of finding 2021-001, 2020-001, 2019-001, 2018-002 and 2017-002 in prior year audit reports. Cause Management?s current process to ensure that the reimbursement of expenditures occurs only after paying the vendor utilizes the assumption that vendors will be paid within 30 days, on average, of incurring the expense. Effect The University received Federal reimbursement prior to paying the vendors for the selected expenses. The reliance of the 30 day average time-frame allowed certain expenditures to be included in requests for reimbursement prior to being liquidated. Questioned Costs None as reimbursement was requested for allowable costs. Recommendation The University should revisit existing internal control procedures to ensure expenditures are paid in compliance with the Federal reimbursement requirements. We also recommend management discuss current cash management requirements with the OMB and the University?s cognizant agency to determine a solution that meets the needs of both parties. Management?s View and Corrective Action Plan Following these findings are management?s view and corrective action plan.
Criteria 2 CFR 200.305 (b3): Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per ?200.207 Specific conditions, or when the non-Federal entity requests payment by reimbursement. Per the OMB Compliance Supplement, the non-Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass-through entity. Condition In testing compliance with the cash management compliance requirement, specifically the reimbursement-method, 40 individual expenditures were tested to compare the date the University made payment to a vendor for a selected expense transaction to the date the University requested sponsor reimbursement for the same transaction. Seven instances were noted in which the University paid the vendor after requesting and receiving reimbursement from the government, as shown in the chart below. See Schedule of Findings and Questioned Costs for chart/table This is a repeat of finding 2021-001, 2020-001, 2019-001, 2018-002 and 2017-002 in prior year audit reports. Cause Management?s current process to ensure that the reimbursement of expenditures occurs only after paying the vendor utilizes the assumption that vendors will be paid within 30 days, on average, of incurring the expense. Effect The University received Federal reimbursement prior to paying the vendors for the selected expenses. The reliance of the 30 day average time-frame allowed certain expenditures to be included in requests for reimbursement prior to being liquidated. Questioned Costs None as reimbursement was requested for allowable costs. Recommendation The University should revisit existing internal control procedures to ensure expenditures are paid in compliance with the Federal reimbursement requirements. We also recommend management discuss current cash management requirements with the OMB and the University?s cognizant agency to determine a solution that meets the needs of both parties. Management?s View and Corrective Action Plan Following these findings are management?s view and corrective action plan.
FINDING 2022-007 Subject: Special Education Cluster (IDEA) - Cash Management Federal Agency: Department of Education Federal Program: Special Education Cluster (IDEA) Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 21611-047-PN01, 21619-047-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Cash Management Audit Findings: Material Weakness, Modified Opinion Condition and Context During fiscal year 2020-2021, the School Corporation was a member as well as the fiscal agent of the Orange-Lawrence-Jackson-Martin-Greene Joint Services Cooperative (Cooperative). The Cooperative operated the special education programs and spent the federal money on behalf of its member schools. During fiscal year 2021-2022, the School Corporation operated their own special education programs. Two reimbursement requests were received from the Indiana Department of Education during the audit period. The School Corporation was unable to provide supporting documentation for the costs included on each of the reimbursement requests. As a result, we were unable to verify the program funds were expended prior to requesting reimbursement. 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). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.305(b)(3) states in part: "Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met when the Federal awarding agency sets a specific condition per ? 200.207 Specific conditions, or when the non-Federal entity requests payment by reimbursement. . . ." Cause Management had not developed nor implemented a system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, with the grant agreement and the Cash Management compliance requirement. Effect The failure to establish an effective system of internal controls and retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirement listed above. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and comply with the grant agreement and the Cash 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 2022-007 Subject: Special Education Cluster (IDEA) - Cash Management Federal Agency: Department of Education Federal Program: Special Education Cluster (IDEA) Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 21611-047-PN01, 21619-047-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Cash Management Audit Findings: Material Weakness, Modified Opinion Condition and Context During fiscal year 2020-2021, the School Corporation was a member as well as the fiscal agent of the Orange-Lawrence-Jackson-Martin-Greene Joint Services Cooperative (Cooperative). The Cooperative operated the special education programs and spent the federal money on behalf of its member schools. During fiscal year 2021-2022, the School Corporation operated their own special education programs. Two reimbursement requests were received from the Indiana Department of Education during the audit period. The School Corporation was unable to provide supporting documentation for the costs included on each of the reimbursement requests. As a result, we were unable to verify the program funds were expended prior to requesting reimbursement. 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). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.305(b)(3) states in part: "Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met when the Federal awarding agency sets a specific condition per ? 200.207 Specific conditions, or when the non-Federal entity requests payment by reimbursement. . . ." Cause Management had not developed nor implemented a system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, with the grant agreement and the Cash Management compliance requirement. Effect The failure to establish an effective system of internal controls and retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirement listed above. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and comply with the grant agreement and the Cash 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 2022-012 Subject: Title I Grants to Local Education 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): S010A190014, S010A200014, S010A190014SIG Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Assessment System Security Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation is required to implement policies and procedures regarding test security for assessments, which includes providing test administration and test security training to appropriate staff prior to testing. A sample of 25 staff members required to receive the training were selected for testing. Of the 25 selected, documentation was not provided for 8 staff members to verify they received the appropriate training. 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). . . ." 2 CFR 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.207(a) states in part: "The Federal awarding agency or pass-through entity may impose additional specific award conditions as needed, . . ." 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." Indiana Assessment Program Manual, Section 9, Part D states in part: "Every school corporation or other test administration location that administers tests under the Indiana Assessment System must have a locally developed written test security policy. While IDOE does not require school board approval of this policy, corporations should follow local level practices to determine if this policy needs to be approved by the local school board. The test security policy developed must: ? Specify that secure test materials should not be delivered to school buildings more than one week (preferably less) in advance of test administration; ? Specify that teachers and other school staff members are not allowed access to secure materials (except for the TAM) more than 4 hours in advance of test administration; and . . . Locally developed written test security policies must include, but not be limited to, the following description regarding how the corporation will: . . . ? Ensure all appropriate staff receive test administration and test security training prior to testing. . . . ? Define and clearly communicate at least once annually for all appropriate staff how staff implementation of test administration and test security standards and procedures will be monitored by school administrators . . ." Cause Management had not established an effective system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, related to the Special Tests and Provisions - Assessment System Security compliance requirement. Effect The failure to establish an effective system of internal controls and retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the Special Tests and Provisions - Assessment System Security compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure documentation be maintained and made available for audit related to the grant agreement and the Special Tests and Provisions - Assessment System Security 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 2022-012 Subject: Title I Grants to Local Education 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): S010A190014, S010A200014, S010A190014SIG Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Assessment System Security Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation is required to implement policies and procedures regarding test security for assessments, which includes providing test administration and test security training to appropriate staff prior to testing. A sample of 25 staff members required to receive the training were selected for testing. Of the 25 selected, documentation was not provided for 8 staff members to verify they received the appropriate training. 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). . . ." 2 CFR 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.207(a) states in part: "The Federal awarding agency or pass-through entity may impose additional specific award conditions as needed, . . ." 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." Indiana Assessment Program Manual, Section 9, Part D states in part: "Every school corporation or other test administration location that administers tests under the Indiana Assessment System must have a locally developed written test security policy. While IDOE does not require school board approval of this policy, corporations should follow local level practices to determine if this policy needs to be approved by the local school board. The test security policy developed must: ? Specify that secure test materials should not be delivered to school buildings more than one week (preferably less) in advance of test administration; ? Specify that teachers and other school staff members are not allowed access to secure materials (except for the TAM) more than 4 hours in advance of test administration; and . . . Locally developed written test security policies must include, but not be limited to, the following description regarding how the corporation will: . . . ? Ensure all appropriate staff receive test administration and test security training prior to testing. . . . ? Define and clearly communicate at least once annually for all appropriate staff how staff implementation of test administration and test security standards and procedures will be monitored by school administrators . . ." Cause Management had not established an effective system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, related to the Special Tests and Provisions - Assessment System Security compliance requirement. Effect The failure to establish an effective system of internal controls and retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the Special Tests and Provisions - Assessment System Security compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure documentation be maintained and made available for audit related to the grant agreement and the Special Tests and Provisions - Assessment System Security 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 2022-007 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): S010A190014, S010A200014, S010A210014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Assessment System Security Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not properly implemented at the School Corporation in order to ensure compliance with the grant agreement and the Special Tests and Provisions - Assessment System Security compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 24 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation did not have a system of internal controls in place to ensure that any individual who administered, handled, or had access to secure test materials at the school or School Corporation had completed assessment security training prior to testing or that all applicable staff members signed the Indiana Testing Security and Integrity Agreement. As a result, for 19 of the 40 applicable staff members tested, the School Corporation could not provide documentation that the individual received assessment security training. In addition, for 8 of the 40 applicable staff members tested, documentation could not be provided to show they had signed the Indiana Testing Security and Integrity Agreement. 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). . . ." 2 CFR 200.207(a) states in part: "The Federal awarding agency or pass-through entity may impose additional specific award conditions as needed. . . ." 511 IAC 5-5-5 states in part: ". . . (b) 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. (c) Each individual required to sign the testing integrity agreement under this rule shall sign the form by the date established and included on the testing integrity agreement. (d) The school shall retain the form for a minimum of two (2) years from the date of signing. (e) Failure to comply with the terms of the testing integrity agreement may constitute evidence of an integrity breach." Cause Management had not established a system of internal controls that would have ensured compliance with requirements related to the grant agreement and the Special Tests and Provisions - Assessment System Security compliance requirement. Effect The failure to establish a system of internal control enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirement listed above could result in the loss of future federal funds to the School Corporation. INDIANA STATE BOARD OF ACCOUNTS 25 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Special Tests and Provisions - Assessment System Security 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 2022-007 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): S010A190014, S010A200014, S010A210014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Assessment System Security Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not properly implemented at the School Corporation in order to ensure compliance with the grant agreement and the Special Tests and Provisions - Assessment System Security compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 24 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation did not have a system of internal controls in place to ensure that any individual who administered, handled, or had access to secure test materials at the school or School Corporation had completed assessment security training prior to testing or that all applicable staff members signed the Indiana Testing Security and Integrity Agreement. As a result, for 19 of the 40 applicable staff members tested, the School Corporation could not provide documentation that the individual received assessment security training. In addition, for 8 of the 40 applicable staff members tested, documentation could not be provided to show they had signed the Indiana Testing Security and Integrity Agreement. 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). . . ." 2 CFR 200.207(a) states in part: "The Federal awarding agency or pass-through entity may impose additional specific award conditions as needed. . . ." 511 IAC 5-5-5 states in part: ". . . (b) 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. (c) Each individual required to sign the testing integrity agreement under this rule shall sign the form by the date established and included on the testing integrity agreement. (d) The school shall retain the form for a minimum of two (2) years from the date of signing. (e) Failure to comply with the terms of the testing integrity agreement may constitute evidence of an integrity breach." Cause Management had not established a system of internal controls that would have ensured compliance with requirements related to the grant agreement and the Special Tests and Provisions - Assessment System Security compliance requirement. Effect The failure to establish a system of internal control enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirement listed above could result in the loss of future federal funds to the School Corporation. INDIANA STATE BOARD OF ACCOUNTS 25 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Special Tests and Provisions - Assessment System Security compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Program: AL 84.010 ? Title I Grants to Local Educational Agencies ? Allowability and Subrecipient Monitoring Grant Number & Year: S010A190027, FFY 2020; S010A200027, FFY 2021 Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR ? 3474.1 (January 1, 2022), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR ? 200.102(a) and 200.207(a). Per 2 CFR ? 200.403 (January 1, 2022), allowable costs must be necessary, reasonable, and adequately documented. 2 CFR ? 200.430(i)(1) (January 1, 2022) states, in relevant part, the following: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . . ; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity . . . . ; and * * * * (vii) Support 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. Enclosure A of the ?Letter to Chief State School Officers on Granting Administrative Flexibility for Better Measures of Success? (September 7, 2012) provides guidelines for local educational agencies (LEAs), using a substitute system for time-and-effort reporting. Enclosure A states, in relevant part, the following: (3) Employee schedules must: a. Indicate the specific activity or cost objective that the employee worked on for each segment of the employee?s schedule; b. Account for the total hours for which each employee is compensated during the period reflected on the employee?s schedule; and c. Be certified at least semiannually and signed by the employee and a supervisory official having firsthand knowledge of the work performed by the employee. 2 CFR ? 200.332 (January 1, 2022) states, in relevant part, the following: All pass-through entities must: * * * * (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: * * * * (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient . . . . A good internal control plan requires that adequate documentation be maintained to support amounts claimed by and paid to subrecipients. Good internal control also requires procedures to follow up with subrecipients to ensure they are correcting deficiencies and in compliance with applicable regulations. Condition: The Agency lacked procedures to ensure that subrecipients documented their use of Federal awards appropriately. Repeat Finding: No Questioned Costs: $145,101 known (S010A190027, $8,041; S010A200027, $137,060) Statistical Sample: No Context: We randomly selected 25 subrecipient payments and also chose the largest subrecipient payment for testing. We noted the following: ? Several employees? salaries and benefits were included in the reimbursement requests; however, the Agency did not require subrecipients to submit documentation for these expenditures, other than reports from their accountings systems, at the time of reimbursement. We provided the Agency with an opportunity to request documentation from its subrecipients to support that their salaries and benefits expenses were allowable and in accordance with Federal cost principles; however, two of the subrecipients did not provide adequate support to show that their salaries and benefits were allocable to the grant, resulting in $8,041 sample questioned costs and $137,060 non-sample questioned costs. ? The Agency?s procedure is to perform fiscal reviews of each subrecipient at least once every three years. We reviewed the most recent fiscal reviews for the same 26 subrecipients selected for testing above. For five of these reviews, the Agency noted that the subrecipient did not maintain adequate documentation for salaries and benefits. When we inquired with the Agency regarding what had been done to follow up on its findings, the Agency replied that the findings did not require follow-up. Payment errors noted for the sample tested were $8,041. The total sample tested was $1,494,006. Subrecipient aid payments for the fiscal year ended June 30, 2022, totaled $91,043,602. The sample population was $84,396,850 (total population $91,043,602 less $6,646,752 to largest subrecipient that was separately determined to be allowable). Based on the sample tested, the case error rate was 8% (2/25). The dollar error rate for the sample was 0.54% ($8,041/$1,494,006), which estimates the potential dollars at risk for fiscal year 2022 to be $455,753 (dollar rate multiplied by the population). Cause: Inadequate procedures. Effect: Without adequate supporting documentation and monitoring procedures, there is an increased risk that Federal awards could be used for unallowable costs. Recommendation: We recommend the Agency improve procedures to monitor subrecipients, including reviewing detailed supporting documentation for payroll expenses and following up with subrecipients to ensure that they correct errors noted. Management Response: The Department agrees the two subrecipients sampled did not complete one time and effort certification semi-annually (rather completed annually instead) or with all language suggested in the guidelines from the U.S. Department of Education. However, the Department disagrees with the reimbursement being questioned costs as the time and effort certifications demonstrated adequate documentation to support the employees? activities were allowable for the Title I grant. In the absence of this information, the Department submitted affidavits from the two LEA?s supervisory staff with personal knowledge of the work performed consistent with the U.S. Department of Education?s audit resolutions practices; whereas the APA does not consider documentation after the fact to be adequate to eliminate the finding. The findings noted in the subrecipient fiscal monitoring exit letters were identified for technical assistance purposes only and not considered to have met a level of materiality that required a corrective action plan. Corrective action plans are clearly noted in subrecipient fiscal monitoring exit letters when issued and proper follow-up action is taken when this occurs. Technical assistance was provided to each of the subrecipients at the time of the monitoring review as well as to all subrecipients periodically throughout the year. APA Response: Per the Uniform Guidance, questioned costs include expenditures that lack adequate supporting documentation at the time of the audit. 2 CFR ? 200.430(i)(1) (January 1, 2022), as referenced in the report comment, says that such documentation must ?accurately reflect the work performed? and be ?supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.? Affidavits dated February 27, 2023, some 18 months after the salary and benefit expenses occurred, cannot possibly satisfy either of these requirements and are, therefore, not acceptable. As the documentation provided did not meet the minimum requirements set forth in Uniform Guidance and guidance issued by the U.S. Department of Education, the expenditures at issue must be considered questioned costs. Moreover, the Uniform Guidance requires the Agency, as the pass-through entity, to ensure that the subrecipient takes timely and appropriate action to address deficiencies identified not only during audits but also from the Agency?s own reviews. The Agency has noted issues similar to those addressed by the APA ? namely, that the subrecipients have lacked adequate supporting documentation for salary and benefit expenses. The Agency performs subrecipient fiscal monitoring for most subrecipients only every third year. Thus, effective follow-up procedures, as required by 2 CFR ? 200.332 (January 1, 2022), are needed to ensure that subrecipients implement the technical assistance provided by the Agency.
FINDING 2022-011 Subject: Special Education Cluster (IDEA) - Cash Management, Reporting Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 21611-138-PN01, 21619-138-PN01, 22611-138-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Cash Management, Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with the requirements related to the grant agreement and the Cash Management and the Reporting compliance requirements. The School Corporation had not established an effective system of internal controls to ensure that proper documentation was retained for audit. The School Corporation was unable to provide supporting documentation for 12 of the 15 reimbursement requests tested. Due to the lack of documentation, we were unable to verify the amounts reported on the reimbursement requests to the School Corporation's records. In addition, we were unable to determine if program funds were expended prior to requesting reimbursement. INDIANA STATE BOARD OF ACCOUNTS 43 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls and failure to retain supporting documentation 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). . . ." 2 CFR 200.333 (Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.305(b) (Uniform Guidance) states in part: "For non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. . . . (3) Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per ? 200.207 Specific conditions, or when the non-Federal entity requests payment by reimbursement. . . ." 2 CFR 200.305(b) (Revised Uniform Guidance) states in part: "For non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. . . . INDIANA STATE BOARD OF ACCOUNTS 44 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (3) Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per ? 200.208, or when the non-Federal entity requests payment by reimbursement. . . ." 2 CFR 200.302(b) (Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting and 200.328 Monitoring and reporting program performance. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not developed nor implemented a system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, with the grant agreement and the Cash Management and the Reporting compliance requirements. Effect The failure to establish an effective system of internal controls and to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with compliance requirements listed above. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure documentation will be maintained and made available for audit and comply with the grant agreement and the Cash Management and the Reporting compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-011 Subject: Special Education Cluster (IDEA) - Cash Management, Reporting Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 21611-138-PN01, 21619-138-PN01, 22611-138-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Cash Management, Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with the requirements related to the grant agreement and the Cash Management and the Reporting compliance requirements. The School Corporation had not established an effective system of internal controls to ensure that proper documentation was retained for audit. The School Corporation was unable to provide supporting documentation for 12 of the 15 reimbursement requests tested. Due to the lack of documentation, we were unable to verify the amounts reported on the reimbursement requests to the School Corporation's records. In addition, we were unable to determine if program funds were expended prior to requesting reimbursement. INDIANA STATE BOARD OF ACCOUNTS 43 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls and failure to retain supporting documentation 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). . . ." 2 CFR 200.333 (Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.305(b) (Uniform Guidance) states in part: "For non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. . . . (3) Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per ? 200.207 Specific conditions, or when the non-Federal entity requests payment by reimbursement. . . ." 2 CFR 200.305(b) (Revised Uniform Guidance) states in part: "For non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. . . . INDIANA STATE BOARD OF ACCOUNTS 44 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (3) Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per ? 200.208, or when the non-Federal entity requests payment by reimbursement. . . ." 2 CFR 200.302(b) (Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting and 200.328 Monitoring and reporting program performance. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not developed nor implemented a system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, with the grant agreement and the Cash Management and the Reporting compliance requirements. Effect The failure to establish an effective system of internal controls and to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with compliance requirements listed above. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure documentation will be maintained and made available for audit and comply with the grant agreement and the Cash Management and the Reporting compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-011 Subject: Special Education Cluster (IDEA) - Cash Management, Reporting Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 21611-138-PN01, 21619-138-PN01, 22611-138-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Cash Management, Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with the requirements related to the grant agreement and the Cash Management and the Reporting compliance requirements. The School Corporation had not established an effective system of internal controls to ensure that proper documentation was retained for audit. The School Corporation was unable to provide supporting documentation for 12 of the 15 reimbursement requests tested. Due to the lack of documentation, we were unable to verify the amounts reported on the reimbursement requests to the School Corporation's records. In addition, we were unable to determine if program funds were expended prior to requesting reimbursement. INDIANA STATE BOARD OF ACCOUNTS 43 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls and failure to retain supporting documentation 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). . . ." 2 CFR 200.333 (Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.305(b) (Uniform Guidance) states in part: "For non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. . . . (3) Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per ? 200.207 Specific conditions, or when the non-Federal entity requests payment by reimbursement. . . ." 2 CFR 200.305(b) (Revised Uniform Guidance) states in part: "For non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. . . . INDIANA STATE BOARD OF ACCOUNTS 44 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (3) Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per ? 200.208, or when the non-Federal entity requests payment by reimbursement. . . ." 2 CFR 200.302(b) (Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting and 200.328 Monitoring and reporting program performance. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not developed nor implemented a system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, with the grant agreement and the Cash Management and the Reporting compliance requirements. Effect The failure to establish an effective system of internal controls and to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with compliance requirements listed above. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure documentation will be maintained and made available for audit and comply with the grant agreement and the Cash Management and the Reporting compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Subject: Title I Grants to Local Educational Agencies - Cash Management and Reporting 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): S010A190014, S010A200014, S010A210014 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Cash Management, Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding related to Reporting from the immediately prior audit report. The prior audit finding number was 2020-007. INDIANA STATE BOARD OF ACCOUNTS 32 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with the requirements related to the grant agreement and the Cash Management and the Reporting compliance requirements. The School Corporation filed the required special reports with the Indiana Department of Education; however, none of the reports were supported by the School Corporation's records. Although the Title I Director reviewed the requests for reimbursement and the Final Expenditure Reports, the reviews did not ensure that the reports agreed to the School Corporation's financial records. The 2019-2020 and 2020-2021 Final Expenditure Reports and the four reimbursement requests tested could not be traced to the School Corporation's records. 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). . . ." 2 CFR 200.333 (Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) (Uniform Guidance) states in part: . . . "The financial management system of each non-Federal entity must provide for the following: INDIANA STATE BOARD OF ACCOUNTS 33 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 2 CFR 200.305(b) (Uniform Guidance) states in part: "For non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. . . . (3) Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per ? 200.207 Specific conditions, or when the non-Federal entity requests payment by reimbursement. . . ." 2 CFR 200.305(b) (Revised Uniform Guidance) states in part: "For non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. . . . (3) Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per ? 200.208, or when the non-Federal entity requests payment by reimbursement. . . ." Cause Management had not established an effective system of internal controls that would have ensured compliance with requirements related to the Cash Management and the Reporting compliance requirements. INDIANA STATE BOARD OF ACCOUNTS 34 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective system of internal controls and to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirements listed above. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure documentation be maintained and made available for audit related to the grant agreement and the Cash Management and the Reporting compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-008 Subject: Title I Grants to Local Educational Agencies - Earmarking 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): S010A190014, S010A200014, S010A210014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-008. 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 earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Officials of the School Corporation were unaware that the earmarking requirement for Parental Involvement was a mandatory spending requirement. Therefore, there were no internal controls in place related to this requirement nor was the required amounts spent for parental involvement. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 37 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.400 states in part: ". . . (a) The non-Federal entity is responsible for the efficient and effective administration of the Federal award through the application of sound management practices. (b) The non-Federal entity assumes responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. . . ." 2 CFR 200.207 (Uniform Guidance) states in part: "The Federal Awarding Agency or pass-through entity may impose additional specific award conditions as needed . . ." 2 CFR 200.208(b) (Revised Uniform Guidance) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." Cause Management had not developed a system of internal controls that would have ensured compliance with the earmarking requirements of the Matching, Level of Effort, and Earmarking compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement could result in the loss of future 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 Matching, Level of Effort, Earmarking 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 2022-006 Subject: Title I Grants to Local Educational Agencies - Cash Management and Reporting 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): S010A190014, S010A200014, S010A210014 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Cash Management, Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding related to Reporting from the immediately prior audit report. The prior audit finding number was 2020-007. INDIANA STATE BOARD OF ACCOUNTS 32 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with the requirements related to the grant agreement and the Cash Management and the Reporting compliance requirements. The School Corporation filed the required special reports with the Indiana Department of Education; however, none of the reports were supported by the School Corporation's records. Although the Title I Director reviewed the requests for reimbursement and the Final Expenditure Reports, the reviews did not ensure that the reports agreed to the School Corporation's financial records. The 2019-2020 and 2020-2021 Final Expenditure Reports and the four reimbursement requests tested could not be traced to the School Corporation's records. 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). . . ." 2 CFR 200.333 (Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) (Uniform Guidance) states in part: . . . "The financial management system of each non-Federal entity must provide for the following: INDIANA STATE BOARD OF ACCOUNTS 33 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 2 CFR 200.305(b) (Uniform Guidance) states in part: "For non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. . . . (3) Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per ? 200.207 Specific conditions, or when the non-Federal entity requests payment by reimbursement. . . ." 2 CFR 200.305(b) (Revised Uniform Guidance) states in part: "For non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. . . . (3) Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per ? 200.208, or when the non-Federal entity requests payment by reimbursement. . . ." Cause Management had not established an effective system of internal controls that would have ensured compliance with requirements related to the Cash Management and the Reporting compliance requirements. INDIANA STATE BOARD OF ACCOUNTS 34 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective system of internal controls and to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirements listed above. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure documentation be maintained and made available for audit related to the grant agreement and the Cash Management and the Reporting compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-008 Subject: Title I Grants to Local Educational Agencies - Earmarking 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): S010A190014, S010A200014, S010A210014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-008. 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 earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Officials of the School Corporation were unaware that the earmarking requirement for Parental Involvement was a mandatory spending requirement. Therefore, there were no internal controls in place related to this requirement nor was the required amounts spent for parental involvement. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 37 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.400 states in part: ". . . (a) The non-Federal entity is responsible for the efficient and effective administration of the Federal award through the application of sound management practices. (b) The non-Federal entity assumes responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. . . ." 2 CFR 200.207 (Uniform Guidance) states in part: "The Federal Awarding Agency or pass-through entity may impose additional specific award conditions as needed . . ." 2 CFR 200.208(b) (Revised Uniform Guidance) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." Cause Management had not developed a system of internal controls that would have ensured compliance with the earmarking requirements of the Matching, Level of Effort, and Earmarking compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement could result in the loss of future 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 Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.