Federal program information: Funding agency: U.S. Department of Health and Human Services Title: Health Center Program Cluster Assistance listing numbers: 93.224 & 93.527 Award year and number: 2023 H80CS00036 Criteria: 2 CFR Section 200.302 of the Uniform Guidance requires that organizations maintain complete and detailed records that document the source and application of federal funds. Adequate recordkeeping is essential for financial accountability and compliance with accounting standards. Condition: Transactions reviewed were lacking itemized receipts from the supporting documentation; however, it should be noted that AHCH provided credit card statements for these transactions, which allowed for some level of verification. Questioned Costs: None Context: Of a sample of 25 transactions, two were missing itemized receipts from the supporting documentation. Cause: The missing itemized receipts may be due to oversight or lack of a robust internal control process for maintaining records. Effect: The absence of itemized receipts hinders the ability to verify the legitimacy and appropriateness of these transactions, which raises concerns about the accuracy of financial reporting and compliance with accounting standards and the Uniform Guidance. Auditor’s Recommendations: Management should enforce existing internal control procedures to ensure that all transactions are adequately documented with itemized receipts. Training and guidance should also be provided to staff responsible for record-keeping to emphasize the importance of maintaining complete and detailed documentation. Management’s Response: The finance team will work to ensure that the policy regarding the use of corporate credit cards is followed. All management staff that have organizational corporate cards will be retrained on the importance of obtaining itemized receipts. In the event a receipt is lost, regardless of verifying the legitimacy of the purchase with the purchase with the direct supervisor, the finance team will ensure that the expense is not charged to any federal funding.
Federal program information: Funding agency: U.S. Department of Health and Human Services Title: Health Center Program Cluster Assistance listing numbers: 93.224 & 93.527 Award year and number: 2023 H80CS00036 Criteria: 2 CFR Section 200.302 of the Uniform Guidance requires that organizations maintain complete and detailed records that document the source and application of federal funds. Adequate recordkeeping is essential for financial accountability and compliance with accounting standards. Condition: Transactions reviewed were lacking itemized receipts from the supporting documentation; however, it should be noted that AHCH provided credit card statements for these transactions, which allowed for some level of verification. Questioned Costs: None Context: Of a sample of 25 transactions, two were missing itemized receipts from the supporting documentation. Cause: The missing itemized receipts may be due to oversight or lack of a robust internal control process for maintaining records. Effect: The absence of itemized receipts hinders the ability to verify the legitimacy and appropriateness of these transactions, which raises concerns about the accuracy of financial reporting and compliance with accounting standards and the Uniform Guidance. Auditor’s Recommendations: Management should enforce existing internal control procedures to ensure that all transactions are adequately documented with itemized receipts. Training and guidance should also be provided to staff responsible for record-keeping to emphasize the importance of maintaining complete and detailed documentation. Management’s Response: The finance team will work to ensure that the policy regarding the use of corporate credit cards is followed. All management staff that have organizational corporate cards will be retrained on the importance of obtaining itemized receipts. In the event a receipt is lost, regardless of verifying the legitimacy of the purchase with the purchase with the direct supervisor, the finance team will ensure that the expense is not charged to any federal funding.
Finding 2023-001- Allowable Activities (Significant Deficiency) Information on the federal program: U.S. Department of Treasury, Assistance Listing No. 21.027 Coronavirus Fiscal Recovery Funds Criteria: 2 CFR 200.302 and 2 CFR 200.303 require entities to establish and maintain internal controls and financial management procedures to provide reasonable assurance the award is managed in compliance with statutes, regulations, and terms and conditions of the award and to ensure federal award expenditures adequately supported by source documentation. Condition: We tested controls over disbursements to 9 hospitals during the year. For each hospital to receive funding they were to submit a staffing spreadsheet reporting their increased staffing costs due to COVID. Of the 9 tested, 4 hospitals supporting documentation was not readily available. Additional information, therefore, had to be obtained from the hospital to support the information reported by the hospital in the staffing spreadsheet. In addition, one of the 4 tested could not provide documentation that agreed to the amounts reported on the staffing spreadsheet. Cause: Salary information obtained in support of the staffing spreadsheet included Form 941, Employees Quarterly Federal Tax Return (941). However, some 941s are combined with other hospitals or filed by agency and did not agree to amounts submitted for reimbursement. Additional general ledger information had to be requested from the hospitals during the audit to reconcile to the amounts reported in the staffing spreadsheet. Effect: Internal Controls were not properly implemented to obtain source documentation to adequately support the amounts reported by the hospitals as additional staffing costs. Recommendation: We recommend the Organization strengthen its policies and procedures surrounding disbursements to hospitals to ensure the amounts reported were determined accurate and source documentation is retained to ensure compliance requirements. Views of Responsible Officials and Planned Corrective Action: See Management’s View and Corrective Action Plan included at the end of the report.
21.027 - Coronavirus State and Local Fiscal Recovery Funds Criteria: 2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs. Condition: City of Oregon City has not developed written procedures for determining the allowability of costs. Cause: Administration did not have written procedures for determining the allowability of costs. Effect: Unallowable costs could be charged to the program. Questioned Costs: None Perspective: Written procedures for determining the allowability of costs is integral to the proper design of internal controls. However, the results of audit procedures did not detect any costs which are not allowable charged to the program. Recommendations: Management should develop written procedures as required by 2 CFR Part 200.302(b)(7). Views of Responsible Officials: Management understands the requirement for written procedures for determining the allowability of costs. A formal policy and procedure was approved and adopted August 22, 2023. The opportunity to identify this finding arose due to new management staff and a new audit firm engaged with the June 30, 2022, audit, and we appreciate the opportunity to improve compliance.
Findings and Questioned Costs – Major Federal Award Programs Audit Finding 2023-002 Significant Deficiency Federal Agency: U.S. Department of Education Passthrough Entity: Missouri Department of Elementary and Secondary Education Assistance Listing Number and Federal Program: 84.425 Education Stabilization Fund – Elementary and Secondary Education Compliance Requirements: B. Allowable Costs and L. Reporting Criteria: In accordance with 2 CFR part 200.302, the District is required to maintain financial management systems to trace funds to expenditures to establish that funds have been used according to Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system must provide for records that identify adequately the source and application of funds for federally-funded activities, among other conditions. The reporting of the federal expenditures should be supported by these records. Amounts may not be expended from project funds on an arbitrary basis. Thus, it is critical to have a process in place to regularly reconcile underlying financial records with the grant reports. This will also help ensure correct revenue is being reported and underlying costs in the financial records are supported. Statement of Condition: During the course of our audit, we noted that the District requested reimbursement for expenses that were not properly supported by the necessary project codes and source codes in the financial management system. The grant payment request for reimbursements for respective Federal grants were not reconciled to the District’s general ledger and the classification of expenditures did not agree to what was detailed on the grant payment request for reimbursements. Statement of Cause: Control procedures were not in place to reconcile the general ledger project codes to the grant payment request for reimbursement for the grant. Statement of Effect: Without timely reconciliations and monitoring processes, grant expenditures can be omitted or overstated on submitted grant payment request for reimbursements or other grant noncompliance can be overlooked. This could result in missed funding or noncompliance with grant agreements which could lead to adverse conditions with the grantors. Questioned Costs: No questioned costs. Perspective Information: This appears to be a systemic problem because after reviewing other grants received by the District, the correct project codes and source codes were not being properly utilized. Identification of Repeat Findings: Not a repeat finding. Recommendation: We recommend that the District develop written procedures that require grant payment request for reimbursements and any other required reporting to be reconciled to the internal accounting records prior to report submission. The District must be able to specifically identify and provide support for every expenditure that is reimbursed. A review should be performed to ensure the expenditures are properly classified and allowable. This process should be attainable if each grant utilizes the proper project codes and sources codes as required by the grant agreements. The reconciliation should be monitored by someone not responsible for the recording and procedures should be put in place to ensure the reconciliation is being performed timely. Views of Responsible Officials: The District will correct and resubmit previous ASBRs, and will institute proactive measures where the Superintendent, or other designated District representative, will verify that the District’s accounting software records mirror the accurate totals for expense codes, including project codes, before future reimbursement requests for federal funds are submitted. See Correction Action Plan.
Findings and Questioned Costs – Major Federal Award Programs Audit Finding 2023-002 Significant Deficiency Federal Agency: U.S. Department of Education Passthrough Entity: Missouri Department of Elementary and Secondary Education Assistance Listing Number and Federal Program: 84.425 Education Stabilization Fund – Elementary and Secondary Education Compliance Requirements: B. Allowable Costs and L. Reporting Criteria: In accordance with 2 CFR part 200.302, the District is required to maintain financial management systems to trace funds to expenditures to establish that funds have been used according to Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system must provide for records that identify adequately the source and application of funds for federally-funded activities, among other conditions. The reporting of the federal expenditures should be supported by these records. Amounts may not be expended from project funds on an arbitrary basis. Thus, it is critical to have a process in place to regularly reconcile underlying financial records with the grant reports. This will also help ensure correct revenue is being reported and underlying costs in the financial records are supported. Statement of Condition: During the course of our audit, we noted that the District requested reimbursement for expenses that were not properly supported by the necessary project codes and source codes in the financial management system. The grant payment request for reimbursements for respective Federal grants were not reconciled to the District’s general ledger and the classification of expenditures did not agree to what was detailed on the grant payment request for reimbursements. Statement of Cause: Control procedures were not in place to reconcile the general ledger project codes to the grant payment request for reimbursement for the grant. Statement of Effect: Without timely reconciliations and monitoring processes, grant expenditures can be omitted or overstated on submitted grant payment request for reimbursements or other grant noncompliance can be overlooked. This could result in missed funding or noncompliance with grant agreements which could lead to adverse conditions with the grantors. Questioned Costs: No questioned costs. Perspective Information: This appears to be a systemic problem because after reviewing other grants received by the District, the correct project codes and source codes were not being properly utilized. Identification of Repeat Findings: Not a repeat finding. Recommendation: We recommend that the District develop written procedures that require grant payment request for reimbursements and any other required reporting to be reconciled to the internal accounting records prior to report submission. The District must be able to specifically identify and provide support for every expenditure that is reimbursed. A review should be performed to ensure the expenditures are properly classified and allowable. This process should be attainable if each grant utilizes the proper project codes and sources codes as required by the grant agreements. The reconciliation should be monitored by someone not responsible for the recording and procedures should be put in place to ensure the reconciliation is being performed timely. Views of Responsible Officials: The District will correct and resubmit previous ASBRs, and will institute proactive measures where the Superintendent, or other designated District representative, will verify that the District’s accounting software records mirror the accurate totals for expense codes, including project codes, before future reimbursement requests for federal funds are submitted. See Correction Action Plan.
Findings and Questioned Costs – Major Federal Award Programs Audit Finding 2023-002 Significant Deficiency Federal Agency: U.S. Department of Education Passthrough Entity: Missouri Department of Elementary and Secondary Education Assistance Listing Number and Federal Program: 84.425 Education Stabilization Fund – Elementary and Secondary Education Compliance Requirements: B. Allowable Costs and L. Reporting Criteria: In accordance with 2 CFR part 200.302, the District is required to maintain financial management systems to trace funds to expenditures to establish that funds have been used according to Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system must provide for records that identify adequately the source and application of funds for federally-funded activities, among other conditions. The reporting of the federal expenditures should be supported by these records. Amounts may not be expended from project funds on an arbitrary basis. Thus, it is critical to have a process in place to regularly reconcile underlying financial records with the grant reports. This will also help ensure correct revenue is being reported and underlying costs in the financial records are supported. Statement of Condition: During the course of our audit, we noted that the District requested reimbursement for expenses that were not properly supported by the necessary project codes and source codes in the financial management system. The grant payment request for reimbursements for respective Federal grants were not reconciled to the District’s general ledger and the classification of expenditures did not agree to what was detailed on the grant payment request for reimbursements. Statement of Cause: Control procedures were not in place to reconcile the general ledger project codes to the grant payment request for reimbursement for the grant. Statement of Effect: Without timely reconciliations and monitoring processes, grant expenditures can be omitted or overstated on submitted grant payment request for reimbursements or other grant noncompliance can be overlooked. This could result in missed funding or noncompliance with grant agreements which could lead to adverse conditions with the grantors. Questioned Costs: No questioned costs. Perspective Information: This appears to be a systemic problem because after reviewing other grants received by the District, the correct project codes and source codes were not being properly utilized. Identification of Repeat Findings: Not a repeat finding. Recommendation: We recommend that the District develop written procedures that require grant payment request for reimbursements and any other required reporting to be reconciled to the internal accounting records prior to report submission. The District must be able to specifically identify and provide support for every expenditure that is reimbursed. A review should be performed to ensure the expenditures are properly classified and allowable. This process should be attainable if each grant utilizes the proper project codes and sources codes as required by the grant agreements. The reconciliation should be monitored by someone not responsible for the recording and procedures should be put in place to ensure the reconciliation is being performed timely. Views of Responsible Officials: The District will correct and resubmit previous ASBRs, and will institute proactive measures where the Superintendent, or other designated District representative, will verify that the District’s accounting software records mirror the accurate totals for expense codes, including project codes, before future reimbursement requests for federal funds are submitted. See Correction Action Plan.
Findings and Questioned Costs – Major Federal Award Programs Audit Finding 2023-003 Material Weakness Federal Agency: U.S. Department of Education Passthrough Entity: Missouri Department of Elementary and Secondary Education Assistance Listing Number and Federal Program: 84.425 Education Stabilization Fund – Elementary and Secondary Education Compliance Requirements: B. Allowable Costs and L. Reporting Criteria: In accordance with 2 CFR part 200.302, the District is required to maintain financial management systems to trace funds to expenditures to establish that funds have been used according to Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system must provide for records that identify adequately the source and application of funds for federally-funded activities, among other conditions. The reporting of the federal expenditures should be supported by these records. Amounts may not be expended from project funds on an arbitrary basis. Thus, it is critical to have a process in place to regularly reconcile underlying financial records with the grant reports. This will also help ensure correct revenue is being reported and underlying costs in the financial records are supported. Statement of Condition: During the course of our audit, we noted that the District requested reimbursement for expenses that were not properly supported by the necessary project codes and source codes in the financial management system. The grant payment request for reimbursements for respective Federal grants were not reconciled to the District’s general ledger and the classification of expenditures did not agree to what was detailed on the grant payment request for reimbursements. Additionally, the calculation for allocating expenses and the journal entries made were not approved. The District must be able to specifically identify and provide support for every Federal expenditure that is reimbursed. Statement of Cause: Control procedures were not in place to reconcile the general ledger project codes to the grant payment request for reimbursement for the grant. The District failed to review expenses throughout the year to ensure transactions were properly classified. Controls were not in place to properly review expense allocations or journal entries. Statement of Effect: Without timely reconciliations and monitoring processes, grant expenditures can be omitted or overstated on submitted grant reports or other grant noncompliance can be overlooked. This could result in missed funding or noncompliance with grant agreements which could lead to adverse conditions with the grantors. Questioned Costs: No questioned costs. Perspective Information: This appears to be a systemic problem because after reviewing other grants received by the District, the correct project codes and source codes were not being properly utilized. Identification of Repeat Findings: Not a repeat finding. Recommendation: We recommend that the District develop written procedures that require grant payment request for reimbursements and any other required reporting to be reconciled to the internal accounting records prior to report submission. The District must be able to specifically identify and provide support for every expenditure that is reimbursed. A review should be performed to ensure the expenditures are properly classified and allowable. This process should be attainable if each grant utilizes the proper project codes and sources codes as required by the grant agreements. The reconciliation should be monitored by someone not responsible for the recording and procedures should be put in place to ensure the reconciliation is being performed timely. Controls should be implemented for adjustments that need to be made to be reviewed by a person other than the one recording the adjustment. Evidence of reconciliations and reviews should be clearly identifiable. Views of Responsible Officials: The Hannibal School District received millions of one-time federal grant monies to assist with expenditures incurred as a result of the effects of the coronavirus pandemic. Although these funds were hugely helpful, minimal guidance was available. This is not a finding that has been presented to us in the past. The school district has received federal and state grants annually that are reconciled to the appropriate project codes and this process will be diligently followed as in prior years. For example, the district was awarded the Immediate Responses Services grant in Fall 2023. The expenditure project codes for this grant have been provided by grant guidance and any and all expenditures will be coded using these expenditures codes. This should prevent any need for future journal entries moving forward. This process is an example of the systematic process that will be followed for all grants. See Corrective Action Plan.
Findings and Questioned Costs – Major Federal Award Programs Audit Finding 2023-003 Material Weakness Federal Agency: U.S. Department of Education Passthrough Entity: Missouri Department of Elementary and Secondary Education Assistance Listing Number and Federal Program: 84.425 Education Stabilization Fund – Elementary and Secondary Education Compliance Requirements: B. Allowable Costs and L. Reporting Criteria: In accordance with 2 CFR part 200.302, the District is required to maintain financial management systems to trace funds to expenditures to establish that funds have been used according to Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system must provide for records that identify adequately the source and application of funds for federally-funded activities, among other conditions. The reporting of the federal expenditures should be supported by these records. Amounts may not be expended from project funds on an arbitrary basis. Thus, it is critical to have a process in place to regularly reconcile underlying financial records with the grant reports. This will also help ensure correct revenue is being reported and underlying costs in the financial records are supported. Statement of Condition: During the course of our audit, we noted that the District requested reimbursement for expenses that were not properly supported by the necessary project codes and source codes in the financial management system. The grant payment request for reimbursements for respective Federal grants were not reconciled to the District’s general ledger and the classification of expenditures did not agree to what was detailed on the grant payment request for reimbursements. Additionally, the calculation for allocating expenses and the journal entries made were not approved. The District must be able to specifically identify and provide support for every Federal expenditure that is reimbursed. Statement of Cause: Control procedures were not in place to reconcile the general ledger project codes to the grant payment request for reimbursement for the grant. The District failed to review expenses throughout the year to ensure transactions were properly classified. Controls were not in place to properly review expense allocations or journal entries. Statement of Effect: Without timely reconciliations and monitoring processes, grant expenditures can be omitted or overstated on submitted grant reports or other grant noncompliance can be overlooked. This could result in missed funding or noncompliance with grant agreements which could lead to adverse conditions with the grantors. Questioned Costs: No questioned costs. Perspective Information: This appears to be a systemic problem because after reviewing other grants received by the District, the correct project codes and source codes were not being properly utilized. Identification of Repeat Findings: Not a repeat finding. Recommendation: We recommend that the District develop written procedures that require grant payment request for reimbursements and any other required reporting to be reconciled to the internal accounting records prior to report submission. The District must be able to specifically identify and provide support for every expenditure that is reimbursed. A review should be performed to ensure the expenditures are properly classified and allowable. This process should be attainable if each grant utilizes the proper project codes and sources codes as required by the grant agreements. The reconciliation should be monitored by someone not responsible for the recording and procedures should be put in place to ensure the reconciliation is being performed timely. Controls should be implemented for adjustments that need to be made to be reviewed by a person other than the one recording the adjustment. Evidence of reconciliations and reviews should be clearly identifiable. Views of Responsible Officials: The Hannibal School District received millions of one-time federal grant monies to assist with expenditures incurred as a result of the effects of the coronavirus pandemic. Although these funds were hugely helpful, minimal guidance was available. This is not a finding that has been presented to us in the past. The school district has received federal and state grants annually that are reconciled to the appropriate project codes and this process will be diligently followed as in prior years. For example, the district was awarded the Immediate Responses Services grant in Fall 2023. The expenditure project codes for this grant have been provided by grant guidance and any and all expenditures will be coded using these expenditures codes. This should prevent any need for future journal entries moving forward. This process is an example of the systematic process that will be followed for all grants. See Corrective Action Plan.
Findings and Questioned Costs – Major Federal Award Programs Audit Finding 2023-003 Material Weakness Federal Agency: U.S. Department of Education Passthrough Entity: Missouri Department of Elementary and Secondary Education Assistance Listing Number and Federal Program: 84.425 Education Stabilization Fund – Elementary and Secondary Education Compliance Requirements: B. Allowable Costs and L. Reporting Criteria: In accordance with 2 CFR part 200.302, the District is required to maintain financial management systems to trace funds to expenditures to establish that funds have been used according to Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system must provide for records that identify adequately the source and application of funds for federally-funded activities, among other conditions. The reporting of the federal expenditures should be supported by these records. Amounts may not be expended from project funds on an arbitrary basis. Thus, it is critical to have a process in place to regularly reconcile underlying financial records with the grant reports. This will also help ensure correct revenue is being reported and underlying costs in the financial records are supported. Statement of Condition: During the course of our audit, we noted that the District requested reimbursement for expenses that were not properly supported by the necessary project codes and source codes in the financial management system. The grant payment request for reimbursements for respective Federal grants were not reconciled to the District’s general ledger and the classification of expenditures did not agree to what was detailed on the grant payment request for reimbursements. Additionally, the calculation for allocating expenses and the journal entries made were not approved. The District must be able to specifically identify and provide support for every Federal expenditure that is reimbursed. Statement of Cause: Control procedures were not in place to reconcile the general ledger project codes to the grant payment request for reimbursement for the grant. The District failed to review expenses throughout the year to ensure transactions were properly classified. Controls were not in place to properly review expense allocations or journal entries. Statement of Effect: Without timely reconciliations and monitoring processes, grant expenditures can be omitted or overstated on submitted grant reports or other grant noncompliance can be overlooked. This could result in missed funding or noncompliance with grant agreements which could lead to adverse conditions with the grantors. Questioned Costs: No questioned costs. Perspective Information: This appears to be a systemic problem because after reviewing other grants received by the District, the correct project codes and source codes were not being properly utilized. Identification of Repeat Findings: Not a repeat finding. Recommendation: We recommend that the District develop written procedures that require grant payment request for reimbursements and any other required reporting to be reconciled to the internal accounting records prior to report submission. The District must be able to specifically identify and provide support for every expenditure that is reimbursed. A review should be performed to ensure the expenditures are properly classified and allowable. This process should be attainable if each grant utilizes the proper project codes and sources codes as required by the grant agreements. The reconciliation should be monitored by someone not responsible for the recording and procedures should be put in place to ensure the reconciliation is being performed timely. Controls should be implemented for adjustments that need to be made to be reviewed by a person other than the one recording the adjustment. Evidence of reconciliations and reviews should be clearly identifiable. Views of Responsible Officials: The Hannibal School District received millions of one-time federal grant monies to assist with expenditures incurred as a result of the effects of the coronavirus pandemic. Although these funds were hugely helpful, minimal guidance was available. This is not a finding that has been presented to us in the past. The school district has received federal and state grants annually that are reconciled to the appropriate project codes and this process will be diligently followed as in prior years. For example, the district was awarded the Immediate Responses Services grant in Fall 2023. The expenditure project codes for this grant have been provided by grant guidance and any and all expenditures will be coded using these expenditures codes. This should prevent any need for future journal entries moving forward. This process is an example of the systematic process that will be followed for all grants. See Corrective Action Plan.
U.S. Department of Health and Human Services, California Department of Social Services Federal Financial Assistance Listing/CFDA Number 93.575 Award Year 2022/23 Child Care and Development Fund Cluster Compliance Requirement: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Criteria: Title 2 CFR Section 200.302(b)(7) of the Uniform Guidance requires all non-Federal entities establish written procedures to implement the requirements for determining the allowability of costs in accordance with Subpart E – Cost Principles and the conditions of the Federal award. Condition: The Commission has not established written procedures for determining allowability of costs in accordance with Subpart E – Cost Principles or the conditions of the Federal award. Cause: The Commission’s procedures did not ensure the required written procedures were developed and implemented in accordance with the Uniform Guidance. Effect: The Commission has not complied with Title 2 CFR Section 200.302(b)(7) regarding establishing written procedures for determining the allowability of costs. Questioned Costs: None reported. Context: The condition noted above was identified during our procedures related to allowable costs. Repeat Finding from Prior Year: Yes – 2022-001 Recommendation: We recommend the Commission establish policies and formalize written procedures related to allowable costs in accordance with Subpart E – Cost Principles. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
U.S. Department of Health and Human Services, California Department of Social Services Federal Financial Assistance Listing/CFDA Number 93.575 Award Year 2022/23 Child Care and Development Fund Cluster Compliance Requirement: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Criteria: Title 2 CFR Section 200.302(b)(7) of the Uniform Guidance requires all non-Federal entities establish written procedures to implement the requirements for determining the allowability of costs in accordance with Subpart E – Cost Principles and the conditions of the Federal award. Condition: The Commission has not established written procedures for determining allowability of costs in accordance with Subpart E – Cost Principles or the conditions of the Federal award. Cause: The Commission’s procedures did not ensure the required written procedures were developed and implemented in accordance with the Uniform Guidance. Effect: The Commission has not complied with Title 2 CFR Section 200.302(b)(7) regarding establishing written procedures for determining the allowability of costs. Questioned Costs: None reported. Context: The condition noted above was identified during our procedures related to allowable costs. Repeat Finding from Prior Year: Yes – 2022-001 Recommendation: We recommend the Commission establish policies and formalize written procedures related to allowable costs in accordance with Subpart E – Cost Principles. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2023-003 Compliance and Internal Controls over Allowable Costs (Significant Deficiency) Assistance Listing Number 64.033 VA Supportive Services for Veteran Families, VA Supportive Services for Veteran Families – Shallow Subsidy, and VA Supportive Services for Veteran Families – Legal Services 2021-2022 and 2022-2023 Funding U.S. Department of Veteran Affairs Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, grantees are required to have a detailed breakout of these costs along with any supporting documents for those expenses for auditing and oversight. Title 2 CFR 200.302 requires the financial management system of each non-Federal entity provide records that identify adequately the source and application of funds for federally-funded activities. Condition: We noted instances of the allocation rates being used to calculate amount of payroll costs to charge to grants did not agree to the hours incurred per approved timesheets. Cause: Certain payroll allocation spreadsheets used to calculate amounts to charge grants for payroll costs were not updated to agree with the approved timesheets. Effect: The Agency requested in error reimbursement for unallowable payroll costs. Questioned Costs: $1,617 Perspective: Errors were noted during periods when the prior accounting team was in place or during transition period as the new accounting staff were being hired. Such errors resulted in certain employees’ times under / over allocated, thus reducing overall financial impact. Recommendation: The Agency should update its payroll allocation spreadsheets to agree with the approved timesheets per payroll period to ensure only allowable payroll costs are charged to grants. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan
2023-003 Compliance and Internal Controls over Allowable Costs (Significant Deficiency) Assistance Listing Number 64.033 VA Supportive Services for Veteran Families, VA Supportive Services for Veteran Families – Shallow Subsidy, and VA Supportive Services for Veteran Families – Legal Services 2021-2022 and 2022-2023 Funding U.S. Department of Veteran Affairs Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, grantees are required to have a detailed breakout of these costs along with any supporting documents for those expenses for auditing and oversight. Title 2 CFR 200.302 requires the financial management system of each non-Federal entity provide records that identify adequately the source and application of funds for federally-funded activities. Condition: We noted instances of the allocation rates being used to calculate amount of payroll costs to charge to grants did not agree to the hours incurred per approved timesheets. Cause: Certain payroll allocation spreadsheets used to calculate amounts to charge grants for payroll costs were not updated to agree with the approved timesheets. Effect: The Agency requested in error reimbursement for unallowable payroll costs. Questioned Costs: $1,617 Perspective: Errors were noted during periods when the prior accounting team was in place or during transition period as the new accounting staff were being hired. Such errors resulted in certain employees’ times under / over allocated, thus reducing overall financial impact. Recommendation: The Agency should update its payroll allocation spreadsheets to agree with the approved timesheets per payroll period to ensure only allowable payroll costs are charged to grants. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan
2023-003 Compliance and Internal Controls over Allowable Costs (Significant Deficiency) Assistance Listing Number 64.033 VA Supportive Services for Veteran Families, VA Supportive Services for Veteran Families – Shallow Subsidy, and VA Supportive Services for Veteran Families – Legal Services 2021-2022 and 2022-2023 Funding U.S. Department of Veteran Affairs Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, grantees are required to have a detailed breakout of these costs along with any supporting documents for those expenses for auditing and oversight. Title 2 CFR 200.302 requires the financial management system of each non-Federal entity provide records that identify adequately the source and application of funds for federally-funded activities. Condition: We noted instances of the allocation rates being used to calculate amount of payroll costs to charge to grants did not agree to the hours incurred per approved timesheets. Cause: Certain payroll allocation spreadsheets used to calculate amounts to charge grants for payroll costs were not updated to agree with the approved timesheets. Effect: The Agency requested in error reimbursement for unallowable payroll costs. Questioned Costs: $1,617 Perspective: Errors were noted during periods when the prior accounting team was in place or during transition period as the new accounting staff were being hired. Such errors resulted in certain employees’ times under / over allocated, thus reducing overall financial impact. Recommendation: The Agency should update its payroll allocation spreadsheets to agree with the approved timesheets per payroll period to ensure only allowable payroll costs are charged to grants. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan
2023-002 Compliance and Internal Controls over Allowable Costs (Significant Deficiency) Assistance Listing Number 21.027 COVID - 19 Coronavirus State and Local Fiscal Recovery Funds 2022-2023 Funding U.S. Department of Treasury Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, grantees are required to have a detailed breakout of these costs along with any supporting documents for those expenses for auditing and oversight. Title 2 CFR 200.302 requires the financial management system of each non-Federal entity provide records that identify adequately the source and application of funds for federally-funded activities. Condition: We noted instances of the allocation rates being used to calculate amount of payroll costs to charge to grants did not agree to the hours incurred per approved timesheets. Cause: Certain payroll allocation spreadsheets used to calculate amounts to charge grants for payroll costs were not updated to agree with the approved timesheets. Effect: The Agency requested in error reimbursement for unallowable payroll costs. Questioned Costs: $2,668 Perspective: Errors were noted during periods when the prior accounting team was in place or during transition period as the new accounting staff were being hired. Such errors resulted in certain employees’ times under / over allocated, thus reducing overall financial impact. Recommendation: The Agency should update its payroll allocation spreadsheets to agree with the approved timesheets per payroll period to ensure only allowable payroll costs are charged to grants. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.
2023-002 Compliance and Internal Controls over Allowable Costs (Significant Deficiency) Assistance Listing Number 21.027 COVID - 19 Coronavirus State and Local Fiscal Recovery Funds 2022-2023 Funding U.S. Department of Treasury Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, grantees are required to have a detailed breakout of these costs along with any supporting documents for those expenses for auditing and oversight. Title 2 CFR 200.302 requires the financial management system of each non-Federal entity provide records that identify adequately the source and application of funds for federally-funded activities. Condition: We noted instances of the allocation rates being used to calculate amount of payroll costs to charge to grants did not agree to the hours incurred per approved timesheets. Cause: Certain payroll allocation spreadsheets used to calculate amounts to charge grants for payroll costs were not updated to agree with the approved timesheets. Effect: The Agency requested in error reimbursement for unallowable payroll costs. Questioned Costs: $2,668 Perspective: Errors were noted during periods when the prior accounting team was in place or during transition period as the new accounting staff were being hired. Such errors resulted in certain employees’ times under / over allocated, thus reducing overall financial impact. Recommendation: The Agency should update its payroll allocation spreadsheets to agree with the approved timesheets per payroll period to ensure only allowable payroll costs are charged to grants. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.
2023-002 Compliance and Internal Controls over Allowable Costs (Significant Deficiency) Assistance Listing Number 21.027 COVID - 19 Coronavirus State and Local Fiscal Recovery Funds 2022-2023 Funding U.S. Department of Treasury Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, grantees are required to have a detailed breakout of these costs along with any supporting documents for those expenses for auditing and oversight. Title 2 CFR 200.302 requires the financial management system of each non-Federal entity provide records that identify adequately the source and application of funds for federally-funded activities. Condition: We noted instances of the allocation rates being used to calculate amount of payroll costs to charge to grants did not agree to the hours incurred per approved timesheets. Cause: Certain payroll allocation spreadsheets used to calculate amounts to charge grants for payroll costs were not updated to agree with the approved timesheets. Effect: The Agency requested in error reimbursement for unallowable payroll costs. Questioned Costs: $2,668 Perspective: Errors were noted during periods when the prior accounting team was in place or during transition period as the new accounting staff were being hired. Such errors resulted in certain employees’ times under / over allocated, thus reducing overall financial impact. Recommendation: The Agency should update its payroll allocation spreadsheets to agree with the approved timesheets per payroll period to ensure only allowable payroll costs are charged to grants. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.
Federal Program: ALN 84.425 Education Stabilization Fund (ESF) Condition: The Academy does not have formally documented written controls to ensure compliance with the U.S. Office of Management and Budget’s (OMB) Uniform Administrative Requirement, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), in regard to determining allowable costs, procurement procedures, and cash management. Criteria: 2 CFR § 200.302(b) requires the Academy to have written procedures related to managing cash from federal award, including determining the allowability of costs in accordance with 2 CFR 200 Subpart E – Cost Principles. Additionally, 2 CFR § 318(a) and (c), requires the Academy to formally document procedures used for procurements made within federal programs, to demonstrate compliance with Uniform Guidance, which includes written standards of conduct that cover conflicts of interest and govern the performance of individuals engaged in procurement. Cause: The Academy’s policies and procedures have not been formally drafted and updated in written form to the extent sufficient to meet the requirements above. Effect: The failure to have written policies and procedures resulted in the Academy’s noncompliance with the requirements of the Uniform Guidance. Context: This is a general requirement that pertains to most federal grants. This was not identified via sampling procedures. Questioned Costs: None identified. Recommendation: We recommend the Academy review the Electronic Code of Federal Regulations, particularly the sections referenced above, to obtain a better understanding of the related requirements under Uniform Guidance. Based on this understanding, we recommend the Academy adopt written policies and procedures pertaining to cash management, determining the allowability of costs, and procurement procedures for all federal programs. Views of Responsible Officials and Planned Corrective Actions: Management agrees with our recommendation. See corresponding Corrective Action Plan.
Federal Program: ALN 84.425 Education Stabilization Fund (ESF) Condition: The Academy does not have formally documented written controls to ensure compliance with the U.S. Office of Management and Budget’s (OMB) Uniform Administrative Requirement, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), in regard to determining allowable costs, procurement procedures, and cash management. Criteria: 2 CFR § 200.302(b) requires the Academy to have written procedures related to managing cash from federal award, including determining the allowability of costs in accordance with 2 CFR 200 Subpart E – Cost Principles. Additionally, 2 CFR § 318(a) and (c), requires the Academy to formally document procedures used for procurements made within federal programs, to demonstrate compliance with Uniform Guidance, which includes written standards of conduct that cover conflicts of interest and govern the performance of individuals engaged in procurement. Cause: The Academy’s policies and procedures have not been formally drafted and updated in written form to the extent sufficient to meet the requirements above. Effect: The failure to have written policies and procedures resulted in the Academy’s noncompliance with the requirements of the Uniform Guidance. Context: This is a general requirement that pertains to most federal grants. This was not identified via sampling procedures. Questioned Costs: None identified. Recommendation: We recommend the Academy review the Electronic Code of Federal Regulations, particularly the sections referenced above, to obtain a better understanding of the related requirements under Uniform Guidance. Based on this understanding, we recommend the Academy adopt written policies and procedures pertaining to cash management, determining the allowability of costs, and procurement procedures for all federal programs. Views of Responsible Officials and Planned Corrective Actions: Management agrees with our recommendation. See corresponding Corrective Action Plan.
8. Criteria or specific requirement (including statutory, regulatory, or other citation): The compliance requirements for "L.Reporting", requires the District to maintain accurate accounting records for grant expenditures. In addition, per subpart D (Post Federal Award Requirements), § 200.302, the underlying accounts records must be adequately documented and consistent with the terms and conditions of the grant. 9. Condition: During compliance testing of the District's accounting records to the expenditure report filed with the Illinois State Board of Education, we noted the District overclaimed $134,309 of expenditures at 6/30/23. 10. Questioned Costs: $134,309. 11. Context: The District claimed expenditures that did not agree with their underlying accounting records. 12. Effect: The District was not compliant with reporting requirements. Inaccurate reporting resulted in the District being reimbursed for an additional $134,309 as of 6/30/23. As a result of the overclaim, federal expenditures were reduced on the SEFA from $739,399 to $605,090. 13. Cause: Upon review of the general ledger and quarterly expenditure report, it was determined that the District erroneously overstated their claim amount on two function object codes by a cumulative amount of $134,309. Under 1000-400, total expenditures were $9,298 but District claimed $9,399, resulting in an overclaim of $101. Under 2530-500, total expenditures were $595,792 but District claimed $730,000, resulting in an overclaim of $134,208. 14. Recommendation: We recommend that management review its policies and procedures and implement changes to strengthen internal control over federal reporting. Furthermore, we recommend the District to adequately document claimed expenditures that are consistent with the terms and conditions of each grant agreement. 15. Management's response: The District has agreed with the findings and recommendations as presented. See Corrective Action Plan provided by the District.
U.S. Department of Education Passed Through Kansas State Department of Education Program Name: Education Stabilization Fund Cluster Federal Assistance Listing Numbers: 84.425W, 84.425U, 84.425D Finding 2023-001 SIGNIFICANT DEFICENCY AND MATERIAL NONCOMPLIANCE Internal Controls and Report Submissions Criteria: Pursuant to the Code of Federal Regulations (CFR), Title 2 Grants and Agreements, Subpart D Post Federal Award Requirements, Section 200.303 “the non-federal entity must 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.” Also pursuant to the Code of Federal Regulations (CFR), Title 2 Grants and Agreements, Subpart D Post Federal Award Requirements, Section 200.302 Financial Management (2 CFR §200.302), “identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received.” Condition: When investigating the controls related to Education Stabilization Fund reporting to the State of Kanas, we became aware that the same individual compiling the information is the same submitting the reports with no secondary review. During our examination of the reports submitted for the fiscal year, the report for the quarter ending June 2023 did not back to financial records by approximately $70,441. Cause: The controls related to reporting for Education Stabilization Fund are non-existent. Effect: There is no internal control related to reporting for Education Stabilization Fund. Questioned Costs: $70,441 Recommendations: The District should have an employee compare the Board Clerk’s supporting documentation and the Education Stabilization Fund spreadsheet report before its submission to the State of Kansas for its accuracy. After the approval by the secondary review employee, the report submitted should be printed, initialed by the secondary reviewer, stapled with the information used to compile the report and combined with all financial records for the fiscal year. Views of Responsible Officials and Planned Corrective Actions: The District agrees with the finding. See separate document for planned corrective actions.
2023-001 Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards (SEFA)) Information on the Major Federal Program: Department of Homeland Security Federal Emergency Management Agency Federal Assistance Listing Number: 97.024 Federal Assistance Listing Name: Emergency Food and Shelter National Board Program Pass-through Awards under the Uniform Guidance Requirements: Pass-through Entity Award Name Award Period The United Way SE Family Center DC Phase 39 November 1, 2021 to April 30, 2023 The United Way SE Family Center DC ARPAR November 1, 2021 to April 30, 2023 The United Way Mont. Co Family Center Phase 39 November 1, 2021 to April 30, 2023 The United Way Mont. Co Family Center ARPAR November 1, 2021 to April 30, 2023 The United Way Parish Partners PG Co Phase 39 November 1, 2021 to April 30, 2023 The United Way Parish Partners PG Co ARPAR November 1, 2021 to April 30, 2023 The United Way Parish Partners Calvert Co ARPAR November 1, 2021 to April 30, 2023 The United Way Parish Partners Charles Co ARPAR November 1, 2021 to April 30, 2023 The United Way Angel’s Watch Charles Co ARPAR November 1, 2021 to April 30, 2023 The United Way St. Josephine’s Shelter DC ARPAR November 1, 2021 to April 30, 2023 The United Way Adam’s Place Shelter DC ARPAR November 1, 2021 to April 30, 2023 The United Way SMFB ARPAR November 1, 2021 to April 30, 2023 The United Way SCC Food Pantry Phase 39 November 1, 2021 to April 30, 2023 The United Way SCC Food Pantry ARPAR November 1, 2021 to April 30, 2023 The United Way Phase HR22 April 13, 2022 to July 7, 2022 Criteria: Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR part 200) Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total Federal awards expended for each individual Federal program. In accordance with §200.302 Financial Management, a non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. (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. (3) Records that identify adequately the source and application of funds for Federally-funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets.
2023-001 Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards (SEFA)) Information on the Major Federal Program: Department of Homeland Security Federal Emergency Management Agency Federal Assistance Listing Number: 97.024 Federal Assistance Listing Name: Emergency Food and Shelter National Board Program Pass-through Awards under the Uniform Guidance Requirements: Pass-through Entity Award Name Award Period The United Way SE Family Center DC Phase 39 November 1, 2021 to April 30, 2023 The United Way SE Family Center DC ARPAR November 1, 2021 to April 30, 2023 The United Way Mont. Co Family Center Phase 39 November 1, 2021 to April 30, 2023 The United Way Mont. Co Family Center ARPAR November 1, 2021 to April 30, 2023 The United Way Parish Partners PG Co Phase 39 November 1, 2021 to April 30, 2023 The United Way Parish Partners PG Co ARPAR November 1, 2021 to April 30, 2023 The United Way Parish Partners Calvert Co ARPAR November 1, 2021 to April 30, 2023 The United Way Parish Partners Charles Co ARPAR November 1, 2021 to April 30, 2023 The United Way Angel’s Watch Charles Co ARPAR November 1, 2021 to April 30, 2023 The United Way St. Josephine’s Shelter DC ARPAR November 1, 2021 to April 30, 2023 The United Way Adam’s Place Shelter DC ARPAR November 1, 2021 to April 30, 2023 The United Way SMFB ARPAR November 1, 2021 to April 30, 2023 The United Way SCC Food Pantry Phase 39 November 1, 2021 to April 30, 2023 The United Way SCC Food Pantry ARPAR November 1, 2021 to April 30, 2023 The United Way Phase HR22 April 13, 2022 to July 7, 2022 Criteria: Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR part 200) Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total Federal awards expended for each individual Federal program. In accordance with §200.302 Financial Management, a non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. (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. (3) Records that identify adequately the source and application of funds for Federally-funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets.
Finding Number: 2023-001 Federal Program: COVID-19 ARP Elementary and Secondary School Emergency Relief Federal Award Identification Number and Year: N/A, 2023 Assistance Listing Number (ALN): 84.425U Federal Awarding Agency: U.S. Department of Education Compliance Requirement: Reporting – Final Expenditure Report Pass-through Entity: Ohio Department of Education Repeat Finding: No Significant Deficiency and Noncompliance – Reporting of Final Expenditure Report Criteria: 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. § 200.302(b)(2) which states, in part, the financial management system of each non-Federal entity must provide for the 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. 2 C.F.R. § 200.328 states, in part, 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. 2 C.F.R. § 200.344(a) states, in part, a subrecipient must submit to the pass-through entity, no later than 90 calendar days (or an earlier date as agreed upon by the pass-through entity and subrecipient) after the end date of the period of performance, all financial, performance, and other reports as required by the terms and conditions of the Federal award. Ohio Department of Education Grants Manual requires a final expenditure report (FER) to be submitted to show how grant funds were expended during the grant period for each project immediately after all financial obligations have been liquidated. FERs are to be submitted by September 30. Condition: The Academy did not start and submit the FER until October 3, 2022, three days after the deadline of September 30, 2022. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Context: Auditor reviewed the FER via CCIP and noted the Academy did not start and submit the FER until October 3, 2022, which was three days after the deadline of September 30, 2022. Cause and Effect: The Academy did not have procedures in place to review and submit the Final Expenditure Report timely. As a result, the Academy filed the Final Expenditure Report after the required due date. Recommendation: We recommend that the Academy implement a process to ensure that the Final Expenditure Report is filed by the required due date. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Criteria or specific requirement (including statutory, regulatory, or other citation): The compliance requirements for "L.Reporting", requires the District to maintain accurate accounting records for grant expenditures. In addition, per subpart D (Post Federal Award Requirements), § 200.302, the underlying accounting records must be adequately documented and consistent with the terms and conditions of the grant. Condition: During compliance testing of the District's accounting records to the expenditure report filed with the Illinois State Board of Education, we noted the District overclaimed $516 of expenditures at 6/30/23. Questioned Costs: $516. Context: The District claimed expenditures on their 6/30/23 expenditure report but should have been reported as OS Obligations at 6/30/23 and claimed as allowable expenses at 8/31/23. (1000-100 $480; 1000-200 $36). Effect: Upon review of the general ledger at 6/30/23 and quarterly expenditure report at 6/30/23, it was determined that the District claimed $480 under 1000-100 and $36 under 1000-200 that were expenditures paid in July 2023 and allowable on the 8/31/23 report but not the 6/30/23 and they should have been reported as OS Obligations at 6/30/23. After reviewing the 8/31/23 general ledger, these expenditures were considered allowable. Cause: Policies and procedures are in place that provide reasonable assurance that reports of federal awards submitted to ISBE are supported by the underlying accounting records and are fairly presented in accordance with program requirements. These policies and procedures were not followed when the expenditure report was prepared and filed. Recommendation: We recommend that management review its policies and procedures and implement changes to strengthen internal control over federal reporting. Furthermore, we recommend the District to adequately document claimed expenditures that are consistent with the terms and conditions of each grant agreement. Management's response: The District has agreed with the findings and recommendations as presented. See Corrective Action Plan provided by the School District.
Criteria or specific requirement (including statutory, regulatory, or other citation): The compliance requirements for "L.Reporting", requires the District to maintain accurate accounting records for grant expenditures. In addition, per subpart D (Post Federal Award Requirements), § 200.302, the underlying accounts records must be adequately documented and consistent with the terms and conditions of the grant. Condition: During compliance testing of the District's accounting records to the expenditure report filed with the Illinois State Board of Education, we noted the District overclaimed $4,000 of expenditures at 6/30/23. Questioned Costs: $4,000. Context: The Districts expenditures for 2210-300 at 6/30/23 were overclaimed by $4,000 due to a journal entry being made after expenditure report was submitted. Effect: The District has been in contact with ISBE and was approved to roll over the $4,000 as a prepayment to FY24 grant. Cause: Policies and procedures are in place that provide reasonable assurance that reports of federal awards submitted to ISBE are supported by the underlying accounting records and are fairly presented in accordance with program requirements. These policies and procedures were not followed when the expenditure report was prepared and filed. Recommendation: We recommend that management review its policies and procedures and implement changes to strengthen internal control over federal reporting. Furthermore, we recommend the District to adequately document claimed expenditures that are consistent with the terms and conditions of each grant agreement. Management's response: The District has agreed with the findings and recommendations as presented. See Corrective Action Plan provided by the School District.
Assistance Listing Number, Federal Agency, and Program Name - ALN 14.241, Department of Department of Housing and Urban Development, Housing Opportunities for Persons With AIDS (HOPWA) and COVID-19 HOPWA Federal Award Identification Number and Year - MIH20-FHW001, MIH20-F001, MIH21- F001, MIH22-F001 Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Under 0MB Number 2506-40110-C, on an annual basis, HOPWA formula grantees are required to submit a Consolidated Annual Performance and Evaluation Report (CAPER) demonstrating essential information on grant activities, project sponsors, housing sites, units and households, and beneficiaries. Per 2 CFR 200.302(b), the nonfederal entity must maintain a financial management system that provides records that identify adequately the source and application of funds for federally funded activities. Per 2 CFR 200.303(a), the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal 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 the 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). Condition - The controls in place were not adequate to ensure that amounts reported within the CAPER were accurate and complete in relation to activity reported in the general ledger and underlying records of the City. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Management has a process in place to compile beneficiary headcounts, rental assistance, and other costs for reporting within the CAPER; however, management did not maintain the underlying records to support the amounts and expenditures reported in the CAPER submitted for program year ended June 30, 2023. Where we were able to perform procedures to reconcile to the beneficiary headcount, we identified approximately $3.9 million of expenditures reported within the CAPER was understated by approximately $300,000 in relation to the amounts reported in the general ledger. Cause and Effect - Not maintaining the underlying records and supporting documentation may lead to inaccurate information being reported to the funder and could perhaps inappropriately influence subsequent decisions. Recommendation - We recommend the City implement a system of internal controls to ensure that records used in reporting information to the funding agency are retained in support of the amounts and that supervisory review over those inputs are in place. Additionally, we recommend the City reconcile the books and records timely to ensure accurate and complete reporting of program activity. Views of Responsible Officials and Planned Corrective Actions - The City will review its current process and implement additional reporting controls, including verification of expenditures, retention of supporting documentation, and a timely final reconciliation of the CAPER to the general ledger.
Assistance Listing Number, Federal Agency, and Program Name - ALN 14.241, Department of Department of Housing and Urban Development, Housing Opportunities for Persons With AIDS (HOPWA) and COVID-19 HOPWA Federal Award Identification Number and Year - MIH20-FHW001, MIH20-F001, MIH21- F001, MIH22-F001 Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Under 0MB Number 2506-40110-C, on an annual basis, HOPWA formula grantees are required to submit a Consolidated Annual Performance and Evaluation Report (CAPER) demonstrating essential information on grant activities, project sponsors, housing sites, units and households, and beneficiaries. Per 2 CFR 200.302(b), the nonfederal entity must maintain a financial management system that provides records that identify adequately the source and application of funds for federally funded activities. Per 2 CFR 200.303(a), the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal 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 the 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). Condition - The controls in place were not adequate to ensure that amounts reported within the CAPER were accurate and complete in relation to activity reported in the general ledger and underlying records of the City. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Management has a process in place to compile beneficiary headcounts, rental assistance, and other costs for reporting within the CAPER; however, management did not maintain the underlying records to support the amounts and expenditures reported in the CAPER submitted for program year ended June 30, 2023. Where we were able to perform procedures to reconcile to the beneficiary headcount, we identified approximately $3.9 million of expenditures reported within the CAPER was understated by approximately $300,000 in relation to the amounts reported in the general ledger. Cause and Effect - Not maintaining the underlying records and supporting documentation may lead to inaccurate information being reported to the funder and could perhaps inappropriately influence subsequent decisions. Recommendation - We recommend the City implement a system of internal controls to ensure that records used in reporting information to the funding agency are retained in support of the amounts and that supervisory review over those inputs are in place. Additionally, we recommend the City reconcile the books and records timely to ensure accurate and complete reporting of program activity. Views of Responsible Officials and Planned Corrective Actions - The City will review its current process and implement additional reporting controls, including verification of expenditures, retention of supporting documentation, and a timely final reconciliation of the CAPER to the general ledger.
Assistance Listing Number, Federal Agency, and Program Name - ALN 14.241, Department of Department of Housing and Urban Development, Housing Opportunities for Persons With AIDS (HOPWA) and COVID-19 HOPWA Federal Award Identification Number and Year - MIH20-FHW001, MIH20-F001, MIH21- F001, MIH22-F001 Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Under 0MB Number 2506-40110-C, on an annual basis, HOPWA formula grantees are required to submit a Consolidated Annual Performance and Evaluation Report (CAPER) demonstrating essential information on grant activities, project sponsors, housing sites, units and households, and beneficiaries. Per 2 CFR 200.302(b), the nonfederal entity must maintain a financial management system that provides records that identify adequately the source and application of funds for federally funded activities. Per 2 CFR 200.303(a), the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal 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 the 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). Condition - The controls in place were not adequate to ensure that amounts reported within the CAPER were accurate and complete in relation to activity reported in the general ledger and underlying records of the City. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Management has a process in place to compile beneficiary headcounts, rental assistance, and other costs for reporting within the CAPER; however, management did not maintain the underlying records to support the amounts and expenditures reported in the CAPER submitted for program year ended June 30, 2023. Where we were able to perform procedures to reconcile to the beneficiary headcount, we identified approximately $3.9 million of expenditures reported within the CAPER was understated by approximately $300,000 in relation to the amounts reported in the general ledger. Cause and Effect - Not maintaining the underlying records and supporting documentation may lead to inaccurate information being reported to the funder and could perhaps inappropriately influence subsequent decisions. Recommendation - We recommend the City implement a system of internal controls to ensure that records used in reporting information to the funding agency are retained in support of the amounts and that supervisory review over those inputs are in place. Additionally, we recommend the City reconcile the books and records timely to ensure accurate and complete reporting of program activity. Views of Responsible Officials and Planned Corrective Actions - The City will review its current process and implement additional reporting controls, including verification of expenditures, retention of supporting documentation, and a timely final reconciliation of the CAPER to the general ledger.
Assistance Listing Number, Federal Agency, and Program Name - ALN 14.241, Department of Department of Housing and Urban Development, Housing Opportunities for Persons With AIDS (HOPWA) and COVID-19 HOPWA Federal Award Identification Number and Year - MIH20-FHW001, MIH20-F001, MIH21- F001, MIH22-F001 Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Under 0MB Number 2506-40110-C, on an annual basis, HOPWA formula grantees are required to submit a Consolidated Annual Performance and Evaluation Report (CAPER) demonstrating essential information on grant activities, project sponsors, housing sites, units and households, and beneficiaries. Per 2 CFR 200.302(b), the nonfederal entity must maintain a financial management system that provides records that identify adequately the source and application of funds for federally funded activities. Per 2 CFR 200.303(a), the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal 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 the 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). Condition - The controls in place were not adequate to ensure that amounts reported within the CAPER were accurate and complete in relation to activity reported in the general ledger and underlying records of the City. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Management has a process in place to compile beneficiary headcounts, rental assistance, and other costs for reporting within the CAPER; however, management did not maintain the underlying records to support the amounts and expenditures reported in the CAPER submitted for program year ended June 30, 2023. Where we were able to perform procedures to reconcile to the beneficiary headcount, we identified approximately $3.9 million of expenditures reported within the CAPER was understated by approximately $300,000 in relation to the amounts reported in the general ledger. Cause and Effect - Not maintaining the underlying records and supporting documentation may lead to inaccurate information being reported to the funder and could perhaps inappropriately influence subsequent decisions. Recommendation - We recommend the City implement a system of internal controls to ensure that records used in reporting information to the funding agency are retained in support of the amounts and that supervisory review over those inputs are in place. Additionally, we recommend the City reconcile the books and records timely to ensure accurate and complete reporting of program activity. Views of Responsible Officials and Planned Corrective Actions - The City will review its current process and implement additional reporting controls, including verification of expenditures, retention of supporting documentation, and a timely final reconciliation of the CAPER to the general ledger.
Assistance Listing Number(s): 10.553 and 10.555 Name of Federal Program or Cluster: Child Nutrition Cluster Name of Federal Agency: Department of Agriculture Name of Pass-through Entity: Wisconsin Department of Public Instruction Pass-through Entity Identifying Number(s): 2023-138142-DPI-SB-546, 2023-138005-DPI-SB-546, 2023-138005-DPI-NSL-547, and 2023-138005-DPI-SK_NSLAE-566 Award Period: July 1, 2022 through June 30, 2023 Criteria: According to 2 CFR, Part 200.300 of the Uniform Guidance, a non-federal entity must have the following policies over compliance: cash management (section 200.302(b)(6)), allowability of costs (section 200.302(b)(7)), procurement (section 200.318-.326, reporting (section 200.303), special tests (section 200.303), travel (section 200.475(b)), compensation (section 200.430(a)(1)), and fringe benefits (section 200.431). Condition: Written policies and procedures are not in accordance with the Uniform Guidance. Cause: Sufficient training has not been provided to individuals responsible for the development of written policies and procedures in accordance with the Uniform Guidance. Effect or Potential Effect: Lack of policies and procedures in accordance with the Uniform Guidance could result in noncompliance, disallowed costs, or discontinuance of federal funding. Repeat Finding: No Recommendation: Additional training should be provided to individuals responsible for the development of written policies and procedures in accordance with the Uniform Guidance. Views of Responsible Officials: One City Schools, Inc. agrees with the finding and are working on creating written policies and procedures in accordance with the Uniform Guidance.
Assistance Listing Number(s): 10.553 and 10.555 Name of Federal Program or Cluster: Child Nutrition Cluster Name of Federal Agency: Department of Agriculture Name of Pass-through Entity: Wisconsin Department of Public Instruction Pass-through Entity Identifying Number(s): 2023-138142-DPI-SB-546, 2023-138005-DPI-SB-546, 2023-138005-DPI-NSL-547, and 2023-138005-DPI-SK_NSLAE-566 Award Period: July 1, 2022 through June 30, 2023 Criteria: According to 2 CFR, Part 200.300 of the Uniform Guidance, a non-federal entity must have the following policies over compliance: cash management (section 200.302(b)(6)), allowability of costs (section 200.302(b)(7)), procurement (section 200.318-.326, reporting (section 200.303), special tests (section 200.303), travel (section 200.475(b)), compensation (section 200.430(a)(1)), and fringe benefits (section 200.431). Condition: Written policies and procedures are not in accordance with the Uniform Guidance. Cause: Sufficient training has not been provided to individuals responsible for the development of written policies and procedures in accordance with the Uniform Guidance. Effect or Potential Effect: Lack of policies and procedures in accordance with the Uniform Guidance could result in noncompliance, disallowed costs, or discontinuance of federal funding. Repeat Finding: No Recommendation: Additional training should be provided to individuals responsible for the development of written policies and procedures in accordance with the Uniform Guidance. Views of Responsible Officials: One City Schools, Inc. agrees with the finding and are working on creating written policies and procedures in accordance with the Uniform Guidance.
Assistance Listing Number(s): 10.553 and 10.555 Name of Federal Program or Cluster: Child Nutrition Cluster Name of Federal Agency: Department of Agriculture Name of Pass-through Entity: Wisconsin Department of Public Instruction Pass-through Entity Identifying Number(s): 2023-138142-DPI-SB-546, 2023-138005-DPI-SB-546, 2023-138005-DPI-NSL-547, and 2023-138005-DPI-SK_NSLAE-566 Award Period: July 1, 2022 through June 30, 2023 Criteria: According to 2 CFR, Part 200.300 of the Uniform Guidance, a non-federal entity must have the following policies over compliance: cash management (section 200.302(b)(6)), allowability of costs (section 200.302(b)(7)), procurement (section 200.318-.326, reporting (section 200.303), special tests (section 200.303), travel (section 200.475(b)), compensation (section 200.430(a)(1)), and fringe benefits (section 200.431). Condition: Written policies and procedures are not in accordance with the Uniform Guidance. Cause: Sufficient training has not been provided to individuals responsible for the development of written policies and procedures in accordance with the Uniform Guidance. Effect or Potential Effect: Lack of policies and procedures in accordance with the Uniform Guidance could result in noncompliance, disallowed costs, or discontinuance of federal funding. Repeat Finding: No Recommendation: Additional training should be provided to individuals responsible for the development of written policies and procedures in accordance with the Uniform Guidance. Views of Responsible Officials: One City Schools, Inc. agrees with the finding and are working on creating written policies and procedures in accordance with the Uniform Guidance.
Assistance Listing Number(s): 10.553 and 10.555 Name of Federal Program or Cluster: Child Nutrition Cluster Name of Federal Agency: Department of Agriculture Name of Pass-through Entity: Wisconsin Department of Public Instruction Pass-through Entity Identifying Number(s): 2023-138142-DPI-SB-546, 2023-138005-DPI-SB-546, 2023-138005-DPI-NSL-547, and 2023-138005-DPI-SK_NSLAE-566 Award Period: July 1, 2022 through June 30, 2023 Criteria: According to 2 CFR, Part 200.300 of the Uniform Guidance, a non-federal entity must have the following policies over compliance: cash management (section 200.302(b)(6)), allowability of costs (section 200.302(b)(7)), procurement (section 200.318-.326, reporting (section 200.303), special tests (section 200.303), travel (section 200.475(b)), compensation (section 200.430(a)(1)), and fringe benefits (section 200.431). Condition: Written policies and procedures are not in accordance with the Uniform Guidance. Cause: Sufficient training has not been provided to individuals responsible for the development of written policies and procedures in accordance with the Uniform Guidance. Effect or Potential Effect: Lack of policies and procedures in accordance with the Uniform Guidance could result in noncompliance, disallowed costs, or discontinuance of federal funding. Repeat Finding: No Recommendation: Additional training should be provided to individuals responsible for the development of written policies and procedures in accordance with the Uniform Guidance. Views of Responsible Officials: One City Schools, Inc. agrees with the finding and are working on creating written policies and procedures in accordance with the Uniform Guidance.
Assistance Listing Number(s): 10.553 and 10.555 Name of Federal Program or Cluster: Child Nutrition Cluster Name of Federal Agency: Department of Agriculture Name of Pass-through Entity: Wisconsin Department of Public Instruction Pass-through Entity Identifying Number(s): 2023-138142-DPI-SB-546, 2023-138005-DPI-SB-546, 2023-138005-DPI-NSL-547, and 2023-138005-DPI-SK_NSLAE-566 Award Period: July 1, 2022 through June 30, 2023 Criteria: According to 2 CFR, Part 200.334 of the Uniform Guidance, supporting documentation pertinent to a federal award must be retained for a period of three years from the date of submission of the expenditure. According to 2 CFR, Part 200.302(3) of the Uniform Guidance, records must be supported by source documentation. Condition: Supporting documentation for claims were not retained. Cause: Internal controls for funding claims have not been designed appropriately. Currently, there are no internal controls to ensure support for claims are retained in accordance with federal requirements. Questioned Costs: $344,674 Effect or Potential Effect: Incomplete or inaccurate information could be reported on funding claims. Context: A sample of 8 claims reports were selected from a population of 39. The testing found that supporting documentation for claims was not retained for any of the claims in the sample. Repeat Finding: No Recommendation: One City Schools, Inc. should design and implement appropriate internal controls for retaining support for claims in accordance with federal requirements. Views of Responsible Officials: One City Schools, Inc. agrees with the finding and are working on implementing internal controls for maintaining supporting documentation.
Assistance Listing Number(s): 10.553 and 10.555 Name of Federal Program or Cluster: Child Nutrition Cluster Name of Federal Agency: Department of Agriculture Name of Pass-through Entity: Wisconsin Department of Public Instruction Pass-through Entity Identifying Number(s): 2023-138142-DPI-SB-546, 2023-138005-DPI-SB-546, 2023-138005-DPI-NSL-547, and 2023-138005-DPI-SK_NSLAE-566 Award Period: July 1, 2022 through June 30, 2023 Criteria: According to 2 CFR, Part 200.334 of the Uniform Guidance, supporting documentation pertinent to a federal award must be retained for a period of three years from the date of submission of the expenditure. According to 2 CFR, Part 200.302(3) of the Uniform Guidance, records must be supported by source documentation. Condition: Supporting documentation for claims were not retained. Cause: Internal controls for funding claims have not been designed appropriately. Currently, there are no internal controls to ensure support for claims are retained in accordance with federal requirements. Questioned Costs: $344,674 Effect or Potential Effect: Incomplete or inaccurate information could be reported on funding claims. Context: A sample of 8 claims reports were selected from a population of 39. The testing found that supporting documentation for claims was not retained for any of the claims in the sample. Repeat Finding: No Recommendation: One City Schools, Inc. should design and implement appropriate internal controls for retaining support for claims in accordance with federal requirements. Views of Responsible Officials: One City Schools, Inc. agrees with the finding and are working on implementing internal controls for maintaining supporting documentation.
Assistance Listing Number(s): 10.553 and 10.555 Name of Federal Program or Cluster: Child Nutrition Cluster Name of Federal Agency: Department of Agriculture Name of Pass-through Entity: Wisconsin Department of Public Instruction Pass-through Entity Identifying Number(s): 2023-138142-DPI-SB-546, 2023-138005-DPI-SB-546, 2023-138005-DPI-NSL-547, and 2023-138005-DPI-SK_NSLAE-566 Award Period: July 1, 2022 through June 30, 2023 Criteria: According to 2 CFR, Part 200.334 of the Uniform Guidance, supporting documentation pertinent to a federal award must be retained for a period of three years from the date of submission of the expenditure. According to 2 CFR, Part 200.302(3) of the Uniform Guidance, records must be supported by source documentation. Condition: Supporting documentation for claims were not retained. Cause: Internal controls for funding claims have not been designed appropriately. Currently, there are no internal controls to ensure support for claims are retained in accordance with federal requirements. Questioned Costs: $344,674 Effect or Potential Effect: Incomplete or inaccurate information could be reported on funding claims. Context: A sample of 8 claims reports were selected from a population of 39. The testing found that supporting documentation for claims was not retained for any of the claims in the sample. Repeat Finding: No Recommendation: One City Schools, Inc. should design and implement appropriate internal controls for retaining support for claims in accordance with federal requirements. Views of Responsible Officials: One City Schools, Inc. agrees with the finding and are working on implementing internal controls for maintaining supporting documentation.
Assistance Listing Number(s): 10.553 and 10.555 Name of Federal Program or Cluster: Child Nutrition Cluster Name of Federal Agency: Department of Agriculture Name of Pass-through Entity: Wisconsin Department of Public Instruction Pass-through Entity Identifying Number(s): 2023-138142-DPI-SB-546, 2023-138005-DPI-SB-546, 2023-138005-DPI-NSL-547, and 2023-138005-DPI-SK_NSLAE-566 Award Period: July 1, 2022 through June 30, 2023 Criteria: According to 2 CFR, Part 200.334 of the Uniform Guidance, supporting documentation pertinent to a federal award must be retained for a period of three years from the date of submission of the expenditure. According to 2 CFR, Part 200.302(3) of the Uniform Guidance, records must be supported by source documentation. Condition: Supporting documentation for claims were not retained. Cause: Internal controls for funding claims have not been designed appropriately. Currently, there are no internal controls to ensure support for claims are retained in accordance with federal requirements. Questioned Costs: $344,674 Effect or Potential Effect: Incomplete or inaccurate information could be reported on funding claims. Context: A sample of 8 claims reports were selected from a population of 39. The testing found that supporting documentation for claims was not retained for any of the claims in the sample. Repeat Finding: No Recommendation: One City Schools, Inc. should design and implement appropriate internal controls for retaining support for claims in accordance with federal requirements. Views of Responsible Officials: One City Schools, Inc. agrees with the finding and are working on implementing internal controls for maintaining supporting documentation.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425D Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were complied, prepared, and submitted by the Assistant Superintendent of Schools without an oversight or review process in place to prevent, or detect and correct, errors. Furthermore, the reported data on two of the reports, as noted below, could not be traced back to records that accumulate or summarize the data; therefore, the accuracy and completeness of the reports could not be verified. ESSER I, Year 3 Report The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) Uses - Personnel Services - Salaries," was not able to be verified to the School Corporation's records. Additionally, the key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) Uses - Personnel Services - Benefits," was understated by $16. ESSER II, Year 2 Report The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) Uses - Personnel Services - Salaries," was understated by $288,199. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 17 MILL CREEK COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 200.302(b) 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." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, some data could not be traced back to the underlying records. INDIANA STATE BOARD OF ACCOUNTS 18 MILL CREEK COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure all reports submitted on behalf of the COVID-19 - Education Stabilization Fund program funds are accurate and complete. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425D Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were complied, prepared, and submitted by the Assistant Superintendent of Schools without an oversight or review process in place to prevent, or detect and correct, errors. Furthermore, the reported data on two of the reports, as noted below, could not be traced back to records that accumulate or summarize the data; therefore, the accuracy and completeness of the reports could not be verified. ESSER I, Year 3 Report The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) Uses - Personnel Services - Salaries," was not able to be verified to the School Corporation's records. Additionally, the key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) Uses - Personnel Services - Benefits," was understated by $16. ESSER II, Year 2 Report The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) Uses - Personnel Services - Salaries," was understated by $288,199. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 17 MILL CREEK COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 200.302(b) 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." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, some data could not be traced back to the underlying records. INDIANA STATE BOARD OF ACCOUNTS 18 MILL CREEK COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure all reports submitted on behalf of the COVID-19 - Education Stabilization Fund program funds are accurate and complete. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425D Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were complied, prepared, and submitted by the Assistant Superintendent of Schools without an oversight or review process in place to prevent, or detect and correct, errors. Furthermore, the reported data on two of the reports, as noted below, could not be traced back to records that accumulate or summarize the data; therefore, the accuracy and completeness of the reports could not be verified. ESSER I, Year 3 Report The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) Uses - Personnel Services - Salaries," was not able to be verified to the School Corporation's records. Additionally, the key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) Uses - Personnel Services - Benefits," was understated by $16. ESSER II, Year 2 Report The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) Uses - Personnel Services - Salaries," was understated by $288,199. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 17 MILL CREEK COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 200.302(b) 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." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, some data could not be traced back to the underlying records. INDIANA STATE BOARD OF ACCOUNTS 18 MILL CREEK COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure all reports submitted on behalf of the COVID-19 - Education Stabilization Fund program funds are accurate and complete. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425D Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were complied, prepared, and submitted by the Assistant Superintendent of Schools without an oversight or review process in place to prevent, or detect and correct, errors. Furthermore, the reported data on two of the reports, as noted below, could not be traced back to records that accumulate or summarize the data; therefore, the accuracy and completeness of the reports could not be verified. ESSER I, Year 3 Report The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) Uses - Personnel Services - Salaries," was not able to be verified to the School Corporation's records. Additionally, the key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) Uses - Personnel Services - Benefits," was understated by $16. ESSER II, Year 2 Report The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) Uses - Personnel Services - Salaries," was understated by $288,199. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 17 MILL CREEK COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 200.302(b) 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." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, some data could not be traced back to the underlying records. INDIANA STATE BOARD OF ACCOUNTS 18 MILL CREEK COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure all reports submitted on behalf of the COVID-19 - Education Stabilization Fund program funds are accurate and complete. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. INDIANA STATE BOARD OF ACCOUNTS 18 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. The reports were prepared by one employee without an oversight, review, or approval process in place to prevent, or detect and correct, errors. Data for four of the six reports tested during the audit period could not be traced to the records that accumulated and summarized the data. The following errors were identified when tracing key line items to supporting documentation: ESSER I - Year II Report 'Addressing Physical Health and Safety - Supplies' was understated by $12,522, and 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies' was overstated $19. ESSER II - Year I Report 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Personnel Services - Salaries' was understated by $20,536, and 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies' was understated by $1,321. ESSER II - Year II Report 'Addressing Physical Health and Safety Uses - Supplies' was understated by $5,764, and 'Meeting Students' Academic, Social, Emotional, and Other Needs Uses (Excluding Mental Health Supports) - Personnel Services - Salaries' was overstated $264. ESSER III - Year II Report 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Personnel Services - Salaries' was overstated $141, and 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies' was understated by $75,303. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to four of the six reports filed. 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 19 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.302(b) 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. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 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 A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, reports were not supported by the School Corporation's underlying accounting records and key line items were misstated. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure reports are supported by the records and key line items are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. INDIANA STATE BOARD OF ACCOUNTS 18 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. The reports were prepared by one employee without an oversight, review, or approval process in place to prevent, or detect and correct, errors. Data for four of the six reports tested during the audit period could not be traced to the records that accumulated and summarized the data. The following errors were identified when tracing key line items to supporting documentation: ESSER I - Year II Report 'Addressing Physical Health and Safety - Supplies' was understated by $12,522, and 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies' was overstated $19. ESSER II - Year I Report 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Personnel Services - Salaries' was understated by $20,536, and 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies' was understated by $1,321. ESSER II - Year II Report 'Addressing Physical Health and Safety Uses - Supplies' was understated by $5,764, and 'Meeting Students' Academic, Social, Emotional, and Other Needs Uses (Excluding Mental Health Supports) - Personnel Services - Salaries' was overstated $264. ESSER III - Year II Report 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Personnel Services - Salaries' was overstated $141, and 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies' was understated by $75,303. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to four of the six reports filed. 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 19 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.302(b) 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. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 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 A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, reports were not supported by the School Corporation's underlying accounting records and key line items were misstated. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure reports are supported by the records and key line items are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. INDIANA STATE BOARD OF ACCOUNTS 18 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. The reports were prepared by one employee without an oversight, review, or approval process in place to prevent, or detect and correct, errors. Data for four of the six reports tested during the audit period could not be traced to the records that accumulated and summarized the data. The following errors were identified when tracing key line items to supporting documentation: ESSER I - Year II Report 'Addressing Physical Health and Safety - Supplies' was understated by $12,522, and 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies' was overstated $19. ESSER II - Year I Report 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Personnel Services - Salaries' was understated by $20,536, and 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies' was understated by $1,321. ESSER II - Year II Report 'Addressing Physical Health and Safety Uses - Supplies' was understated by $5,764, and 'Meeting Students' Academic, Social, Emotional, and Other Needs Uses (Excluding Mental Health Supports) - Personnel Services - Salaries' was overstated $264. ESSER III - Year II Report 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Personnel Services - Salaries' was overstated $141, and 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies' was understated by $75,303. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to four of the six reports filed. 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 19 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.302(b) 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. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 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 A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, reports were not supported by the School Corporation's underlying accounting records and key line items were misstated. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure reports are supported by the records and key line items are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. INDIANA STATE BOARD OF ACCOUNTS 18 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. The reports were prepared by one employee without an oversight, review, or approval process in place to prevent, or detect and correct, errors. Data for four of the six reports tested during the audit period could not be traced to the records that accumulated and summarized the data. The following errors were identified when tracing key line items to supporting documentation: ESSER I - Year II Report 'Addressing Physical Health and Safety - Supplies' was understated by $12,522, and 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies' was overstated $19. ESSER II - Year I Report 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Personnel Services - Salaries' was understated by $20,536, and 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies' was understated by $1,321. ESSER II - Year II Report 'Addressing Physical Health and Safety Uses - Supplies' was understated by $5,764, and 'Meeting Students' Academic, Social, Emotional, and Other Needs Uses (Excluding Mental Health Supports) - Personnel Services - Salaries' was overstated $264. ESSER III - Year II Report 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Personnel Services - Salaries' was overstated $141, and 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies' was understated by $75,303. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to four of the six reports filed. 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 19 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.302(b) 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. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 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 A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, reports were not supported by the School Corporation's underlying accounting records and key line items were misstated. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure reports are supported by the records and key line items are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. INDIANA STATE BOARD OF ACCOUNTS 18 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. The reports were prepared by one employee without an oversight, review, or approval process in place to prevent, or detect and correct, errors. Data for four of the six reports tested during the audit period could not be traced to the records that accumulated and summarized the data. The following errors were identified when tracing key line items to supporting documentation: ESSER I - Year II Report 'Addressing Physical Health and Safety - Supplies' was understated by $12,522, and 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies' was overstated $19. ESSER II - Year I Report 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Personnel Services - Salaries' was understated by $20,536, and 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies' was understated by $1,321. ESSER II - Year II Report 'Addressing Physical Health and Safety Uses - Supplies' was understated by $5,764, and 'Meeting Students' Academic, Social, Emotional, and Other Needs Uses (Excluding Mental Health Supports) - Personnel Services - Salaries' was overstated $264. ESSER III - Year II Report 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Personnel Services - Salaries' was overstated $141, and 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies' was understated by $75,303. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to four of the six reports filed. 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 19 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.302(b) 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. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 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 A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, reports were not supported by the School Corporation's underlying accounting records and key line items were misstated. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure reports are supported by the records and key line items are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. INDIANA STATE BOARD OF ACCOUNTS 18 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. The reports were prepared by one employee without an oversight, review, or approval process in place to prevent, or detect and correct, errors. Data for four of the six reports tested during the audit period could not be traced to the records that accumulated and summarized the data. The following errors were identified when tracing key line items to supporting documentation: ESSER I - Year II Report 'Addressing Physical Health and Safety - Supplies' was understated by $12,522, and 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies' was overstated $19. ESSER II - Year I Report 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Personnel Services - Salaries' was understated by $20,536, and 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies' was understated by $1,321. ESSER II - Year II Report 'Addressing Physical Health and Safety Uses - Supplies' was understated by $5,764, and 'Meeting Students' Academic, Social, Emotional, and Other Needs Uses (Excluding Mental Health Supports) - Personnel Services - Salaries' was overstated $264. ESSER III - Year II Report 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Personnel Services - Salaries' was overstated $141, and 'Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies' was understated by $75,303. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to four of the six reports filed. 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 19 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.302(b) 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. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 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 A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, reports were not supported by the School Corporation's underlying accounting records and key line items were misstated. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure reports are supported by the records and key line items are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-006 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding related to Annual Data Reports from the immediately prior audit report. The prior audit finding number was 2021-004. Condition and Context Annual Data Report The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit an annual data report to the Indiana Department of Education (IDOE) via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. The annual data reports were prepared by the Treasurer and reviewed by a second knowledgeable individual; however, this process did not allow for the prevention, or detection and correction of errors. The School Corporation was required to submit six Annual Data Reports during the audit period. The three Annual Data Reports for the period of July 1, 2020 to June 30, 2021, were not submitted in a timely manner. The reports were to be submitted to the IDOE by May 13, 2022, but the School Corporation did not submit the reports until March 16, 2023. Reimbursement Requests The School Corporation completes reimbursement requests on a periodic basis. The reimbursement requests are prepared by the Treasurer utilizing various ledger reports and are reviewed by a second knowledgeable employee; however, this process did not allow for the prevention, or detection and correction, of errors. INDIANA STATE BOARD OF ACCOUNTS 26 CULVER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) While gaining an understanding of how the School Corporation spent its COVID-19 - Education Stabilization Fund award, various issues with reimbursement requests were noted. The issues identified at that time revealed that the School Corporation submitted reimbursement requests for and received reimbursements for four invoices, twice which resulted an extra $50,000 in grant funds being claimed. Additionally, three reimbursement requests tested did not agree with supporting documentation which resulted in $6,071 being reimbursed that was not supported by the School Corporation's records. The $56,071 is considered a questioned cost. As a result of these errors, we determined that reimbursement requests should be tested. Therefore, a sample of 8 reimbursement requests were selected from the population of 49 for testing. No additional errors were noted in the 8 reimbursement requests tested. The lack of internal controls was a systemic issue that occurred throughout the audit period; the noncompliance was limited to the reports noted above. 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 200.302(b) 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." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 27 CULVER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, reports were not timely submitted to the IDOE, and reimbursement requests were not supported by the School Corporation's underlying accounting records. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs Known questioned of $56,071 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure reports are submitted timely and supporting documentation is used and retained for reimbursement requests. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.