FINDING 2023-002 Subject: Special Education Cluster (IDEA) - Reporting Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 21611-058-PN01; 22611-058-PN01 21619-056-PN01; 22619-056-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation utilized separate funds to account for the financial activity of the special education programs. The ledger activity for these funds was used as the basis for the expenditures claimed for reimbursement on the reimbursement requests submitted to the Indiana Department of Education (IDOE). The School Corporation failed to properly review the reimbursement requests submitted to the IDOE. Although the Assistant Accounting Manager prepared the reimbursement requests, and the Accounting Manager reviewed the requests prior to submission through the IDOE information portal, the internal control was not effective and did not prevent, or detect and correct, material noncompliance. Testing of the reimbursement requests submitted during the audit period identified the following issues: Award 21611-058-PN01 - Seven reimbursement requests were filed during the audit period; all of which were selected for testing. For five of the seven reimbursement requests tested, the expenditures did not agree to the ledger. For four of the five reimbursement requests in which the expenditures did not agree to the ledger, the errors were due to timing issues as expenses were claimed for reimbursement prior to being incurred. As such, the expenditures claimed for reimbursement on two of the requests exceeded the amount per the ledger, with the amount per the ledger then exceeding the expenditures requested for reimbursement by the same amount on the subsequent request. The expenditures included in the fifth reimbursement request exceeded the ledger amount, resulting in a $17 excess reimbursement over what the School Corporation was entitled to receive. Award 22611-058-PN01 - Three reimbursement requests were filed during the audit period; all of which were selected for testing. For two of the three reimbursement requests tested, the amount per the ledger exceeded the expenditures claimed by a total of $416,468. Upon inquiry of the School Corporation to understand why this happened, the officials indicated that total expenditures exceeded the budgeted allocations per the awards. Therefore, the net difference was subtracted from the reimbursement request to determine the amount to request. As such, there was no supporting documentation that detailed the expenditures requested for or excluded from the reimbursement request. Award 21619-056-PN01 - Two reimbursement requests were filed during the audit period; all of which were selected for testing. For one of two reimbursement requests tested, the expenditures included on the reimbursement request exceeded the ledger amount, resulting in a $72 excess reimbursement. Award 22619-056-PN01 - Four reimbursement requests were filed during the audit period; all of which were selected for testing. For one of four reimbursement requests tested, the amount per the ledger exceeded the expenditures claimed by a total of $7,538. Upon inquiry of the School Corporation to understand why this happened, the officials indicated that total expenditures exceeded the budgeted allocations per the awards. Therefore, the net difference was subtracted from the reimbursement request to determine the amount to request. As such, there was no supporting documentation that detailed the expenditures requested for or excluded from the reimbursement request. The lack of internal controls and noncompliance were isolated to the 21611-058-PN01, 22611-058-PN01, 21619-056-PN01, and 22619-056-PN01 grant awards. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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 Financial reporting. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed, . . ." 2 CFR 200.328 states: "Unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMBapproved governmentwide data elements for collection of financial information (at time of publication the Federal Financial Report or such future, OMB-approved, governmentwide data elements available from the OMB-designated standards lead. 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. The Federal awarding agency must use OMB-approved common information collections, as applicable, when providing financial and performance reporting information." 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, requests for reimbursement were not supported by the ledgers. 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 requests for reimbursement are supported by the ledgers. 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: Special Education Cluster (IDEA) - Reporting Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 21611-058-PN01; 22611-058-PN01 21619-056-PN01; 22619-056-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation utilized separate funds to account for the financial activity of the special education programs. The ledger activity for these funds was used as the basis for the expenditures claimed for reimbursement on the reimbursement requests submitted to the Indiana Department of Education (IDOE). The School Corporation failed to properly review the reimbursement requests submitted to the IDOE. Although the Assistant Accounting Manager prepared the reimbursement requests, and the Accounting Manager reviewed the requests prior to submission through the IDOE information portal, the internal control was not effective and did not prevent, or detect and correct, material noncompliance. Testing of the reimbursement requests submitted during the audit period identified the following issues: Award 21611-058-PN01 - Seven reimbursement requests were filed during the audit period; all of which were selected for testing. For five of the seven reimbursement requests tested, the expenditures did not agree to the ledger. For four of the five reimbursement requests in which the expenditures did not agree to the ledger, the errors were due to timing issues as expenses were claimed for reimbursement prior to being incurred. As such, the expenditures claimed for reimbursement on two of the requests exceeded the amount per the ledger, with the amount per the ledger then exceeding the expenditures requested for reimbursement by the same amount on the subsequent request. The expenditures included in the fifth reimbursement request exceeded the ledger amount, resulting in a $17 excess reimbursement over what the School Corporation was entitled to receive. Award 22611-058-PN01 - Three reimbursement requests were filed during the audit period; all of which were selected for testing. For two of the three reimbursement requests tested, the amount per the ledger exceeded the expenditures claimed by a total of $416,468. Upon inquiry of the School Corporation to understand why this happened, the officials indicated that total expenditures exceeded the budgeted allocations per the awards. Therefore, the net difference was subtracted from the reimbursement request to determine the amount to request. As such, there was no supporting documentation that detailed the expenditures requested for or excluded from the reimbursement request. Award 21619-056-PN01 - Two reimbursement requests were filed during the audit period; all of which were selected for testing. For one of two reimbursement requests tested, the expenditures included on the reimbursement request exceeded the ledger amount, resulting in a $72 excess reimbursement. Award 22619-056-PN01 - Four reimbursement requests were filed during the audit period; all of which were selected for testing. For one of four reimbursement requests tested, the amount per the ledger exceeded the expenditures claimed by a total of $7,538. Upon inquiry of the School Corporation to understand why this happened, the officials indicated that total expenditures exceeded the budgeted allocations per the awards. Therefore, the net difference was subtracted from the reimbursement request to determine the amount to request. As such, there was no supporting documentation that detailed the expenditures requested for or excluded from the reimbursement request. The lack of internal controls and noncompliance were isolated to the 21611-058-PN01, 22611-058-PN01, 21619-056-PN01, and 22619-056-PN01 grant awards. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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 Financial reporting. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed, . . ." 2 CFR 200.328 states: "Unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMBapproved governmentwide data elements for collection of financial information (at time of publication the Federal Financial Report or such future, OMB-approved, governmentwide data elements available from the OMB-designated standards lead. 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. The Federal awarding agency must use OMB-approved common information collections, as applicable, when providing financial and performance reporting information." 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, requests for reimbursement were not supported by the ledgers. 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 requests for reimbursement are supported by the ledgers. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2023-001: Overspent Grant Federal Departments: Department of Health and Human Services Assistance Listing #: 93.243 Compliance and Internal Controls Material Weakness Category of Finding – Cash Management Criteria – 2 CFR § 200.302(b), requires entities to have written policies and procedures to accurately track grant accounting. Per the grant agreement, the grant must be earned on a reimbursement basis, which requires eligible expenditures to be incurred in order to earn the grant revenue. Condition – During fiscal year 2023, IPTF recorded $5,821 more revenue on the SAMSHA grant than the related eligible expenditures. Cause – IPTF had turnover in the contract accounting function/position. Multiple adjustments were made in the accounting software by the former contract accounting prior to the transition, which were difficult to trace back to and ultimately, actual costs incurred under the grant were miscalculated and overstated. Effect – As a result of this condition, IPTF was noncompliant with the grant and recognized more revenue than allowed based on eligible costs. Questioned Costs – $5,821 Recommendation – We recommend that management ensure internal financials are reviewed on a monthly basis to ensure completeness and accuracy, which includes having grant specific financials reviewed by the program managers. Also, we recommend contacting the grantor to discuss the need to repay the $5,821. Auditee’s comments and response – IPTF hired a new contract accountant in October 2022 and have since implemented processes to ensure accurate internal financial statements are prepared and reviewed by program managers on a monthly basis as required by their written financial policies. Responsible party for corrective action – Sharon Day, Executive Director Repeat finding – No
FINDING 2023-005 Subject: Title I Grants to Local Educational Agencies - Reporting Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A190014, S010A200014, S010A210014, S010A220014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 28 SCHOOL CITY OF EAST CHICAGO SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 to ensure that reimbursement requests or final expenditure reports were properly supported. Reimbursement Requests A sample of five reimbursement requests were selected for testing. Of the five reimbursement requests tested, one reimbursement request was determined to be a duplicate of a previous reimbursement request. This resulted in the School Corporation being over reimbursed $268,855. On February 7, 2023, the School Corporation returned $7,027 of the amount reimbursed twice to the Indiana Department of Education (IDOE); however, the School Corporation failed to return the remaining $261,828, which is considered questioned costs. Due to the error noted above, an additional six reimbursement requests were selected for testing. No errors were identified with the additional reimbursement requests. Final Expenditure Reports Two final expenditure reports were due during the audit period. Both reports were selected for testing. For one of the two final expenditure reports submitted, the School Corporation did not report the parental involvement and nonpublic set asides, which should have been reported based on the Title I Application for FY2021. The lack of internal controls and noncompliance were isolated to the one reimbursement request and one final expenditure report identified 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 200.334 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. . . ." INDIANA STATE BOARD OF ACCOUNTS 29 SCHOOL CITY OF EAST CHICAGO 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, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. 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, there was one reimbursement request in which the School Corporation was over reimbursed and one final expenditure that was not reported accurately. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $261,828 were identified as noted in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure expenditures are only requested once for reimbursement, that overpayments are promptly returned to the IDOE, and that reports include all required information. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: Title I Grants to Local Educational Agencies - Reporting Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A190014, S010A200014, S010A210014, S010A220014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 28 SCHOOL CITY OF EAST CHICAGO SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 to ensure that reimbursement requests or final expenditure reports were properly supported. Reimbursement Requests A sample of five reimbursement requests were selected for testing. Of the five reimbursement requests tested, one reimbursement request was determined to be a duplicate of a previous reimbursement request. This resulted in the School Corporation being over reimbursed $268,855. On February 7, 2023, the School Corporation returned $7,027 of the amount reimbursed twice to the Indiana Department of Education (IDOE); however, the School Corporation failed to return the remaining $261,828, which is considered questioned costs. Due to the error noted above, an additional six reimbursement requests were selected for testing. No errors were identified with the additional reimbursement requests. Final Expenditure Reports Two final expenditure reports were due during the audit period. Both reports were selected for testing. For one of the two final expenditure reports submitted, the School Corporation did not report the parental involvement and nonpublic set asides, which should have been reported based on the Title I Application for FY2021. The lack of internal controls and noncompliance were isolated to the one reimbursement request and one final expenditure report identified 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 200.334 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. . . ." INDIANA STATE BOARD OF ACCOUNTS 29 SCHOOL CITY OF EAST CHICAGO 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, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. 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, there was one reimbursement request in which the School Corporation was over reimbursed and one final expenditure that was not reported accurately. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $261,828 were identified as noted in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure expenditures are only requested once for reimbursement, that overpayments are promptly returned to the IDOE, and that reports include all required information. 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 Number: 84.425U Federal Award Number and Year (or Other Identifying Number): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context 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. 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. After the annual data reports were prepared, they were reviewed by a second knowledgeable individual; however, this process did not allow for the prevention, or detection and correction, of errors prior to submission. Due to the lack of effective internal controls, two of the six annual data reports were not supported by the School Corporation's records. The issues identified are noted below: 1. For the ESSER III, Year 1 report, which covered the period of July 1, 2020 to June 30, 2021, total expenses, per the report, were $2,187,386; however, the School Corporation's ledger had total expenses for the award, for that time period, of $0. 2. For the ESSER III, Year 2 report, which covered the period of July 1, 2021 to June 30, 2022, total expenses, per the report, were $0; however, the School Corporation's ledger had total expenses for the award, for that time period, of $438,684. The lack of internal controls and noncompliance were isolated to the ESSER III, Year 1 and Year 2 reports. INDIANA STATE BOARD OF ACCOUNTS 23 RUSH COUNTY SCHOOLS 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 200.302(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, the ESSER III, Year 1 and Year 2 reports were not supported by the School Corporation's 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 There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 24 RUSH COUNTY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that all reports are supported by the ledgers or report used to complete the reports. 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 Number: 84.425U Federal Award Number and Year (or Other Identifying Number): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context 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. 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. After the annual data reports were prepared, they were reviewed by a second knowledgeable individual; however, this process did not allow for the prevention, or detection and correction, of errors prior to submission. Due to the lack of effective internal controls, two of the six annual data reports were not supported by the School Corporation's records. The issues identified are noted below: 1. For the ESSER III, Year 1 report, which covered the period of July 1, 2020 to June 30, 2021, total expenses, per the report, were $2,187,386; however, the School Corporation's ledger had total expenses for the award, for that time period, of $0. 2. For the ESSER III, Year 2 report, which covered the period of July 1, 2021 to June 30, 2022, total expenses, per the report, were $0; however, the School Corporation's ledger had total expenses for the award, for that time period, of $438,684. The lack of internal controls and noncompliance were isolated to the ESSER III, Year 1 and Year 2 reports. INDIANA STATE BOARD OF ACCOUNTS 23 RUSH COUNTY SCHOOLS 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 200.302(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, the ESSER III, Year 1 and Year 2 reports were not supported by the School Corporation's 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 There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 24 RUSH COUNTY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that all reports are supported by the ledgers or report used to complete the reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 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, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation was required to submit annual data reports 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. 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 reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Due to the lack of internal controls, the ESSER III, Year 1 Report had the following errors: The key line items "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports)(exclusive of amount expended toward required setaside to address learning loss) - Supplies" and "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports)(amount expended toward required set-aside to address learning loss) - Supplies" reported an expended amount of $285,111; however, the amount was only encumbered in the ledger, not actually expended. INDIANA STATE BOARD OF ACCOUNTS 22 LINTON-STOCKTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls was a systemic issue throughout the audit period. The lack of noncompliance was isolated to the ESSER III, Year 1 report. 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, which would include segregation of key functions, 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 23 LINTON-STOCKTON 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, the amount expended for two key line items was not supported by the ledger. 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 2023-004 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, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation was required to submit annual data reports 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. 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 reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Due to the lack of internal controls, the ESSER III, Year 1 Report had the following errors: The key line items "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports)(exclusive of amount expended toward required setaside to address learning loss) - Supplies" and "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports)(amount expended toward required set-aside to address learning loss) - Supplies" reported an expended amount of $285,111; however, the amount was only encumbered in the ledger, not actually expended. INDIANA STATE BOARD OF ACCOUNTS 22 LINTON-STOCKTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls was a systemic issue throughout the audit period. The lack of noncompliance was isolated to the ESSER III, Year 1 report. 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, which would include segregation of key functions, 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 23 LINTON-STOCKTON 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, the amount expended for two key line items was not supported by the ledger. 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 2023-004 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, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation was required to submit annual data reports 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. 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 reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Due to the lack of internal controls, the ESSER III, Year 1 Report had the following errors: The key line items "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports)(exclusive of amount expended toward required setaside to address learning loss) - Supplies" and "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports)(amount expended toward required set-aside to address learning loss) - Supplies" reported an expended amount of $285,111; however, the amount was only encumbered in the ledger, not actually expended. INDIANA STATE BOARD OF ACCOUNTS 22 LINTON-STOCKTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls was a systemic issue throughout the audit period. The lack of noncompliance was isolated to the ESSER III, Year 1 report. 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, which would include segregation of key functions, 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 23 LINTON-STOCKTON 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, the amount expended for two key line items was not supported by the ledger. 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 2023-004 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, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation was required to submit annual data reports 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. 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 reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Due to the lack of internal controls, the ESSER III, Year 1 Report had the following errors: The key line items "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports)(exclusive of amount expended toward required setaside to address learning loss) - Supplies" and "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports)(amount expended toward required set-aside to address learning loss) - Supplies" reported an expended amount of $285,111; however, the amount was only encumbered in the ledger, not actually expended. INDIANA STATE BOARD OF ACCOUNTS 22 LINTON-STOCKTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls was a systemic issue throughout the audit period. The lack of noncompliance was isolated to the ESSER III, Year 1 report. 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, which would include segregation of key functions, 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 23 LINTON-STOCKTON 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, the amount expended for two key line items was not supported by the ledger. 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 2023-004 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, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation was required to submit annual data reports 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. 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 reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Due to the lack of internal controls, the ESSER III, Year 1 Report had the following errors: The key line items "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports)(exclusive of amount expended toward required setaside to address learning loss) - Supplies" and "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports)(amount expended toward required set-aside to address learning loss) - Supplies" reported an expended amount of $285,111; however, the amount was only encumbered in the ledger, not actually expended. INDIANA STATE BOARD OF ACCOUNTS 22 LINTON-STOCKTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls was a systemic issue throughout the audit period. The lack of noncompliance was isolated to the ESSER III, Year 1 report. 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, which would include segregation of key functions, 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 23 LINTON-STOCKTON 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, the amount expended for two key line items was not supported by the ledger. 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 2023-004 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, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation was required to submit annual data reports 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. 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 reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Due to the lack of internal controls, the ESSER III, Year 1 Report had the following errors: The key line items "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports)(exclusive of amount expended toward required setaside to address learning loss) - Supplies" and "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports)(amount expended toward required set-aside to address learning loss) - Supplies" reported an expended amount of $285,111; however, the amount was only encumbered in the ledger, not actually expended. INDIANA STATE BOARD OF ACCOUNTS 22 LINTON-STOCKTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls was a systemic issue throughout the audit period. The lack of noncompliance was isolated to the ESSER III, Year 1 report. 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, which would include segregation of key functions, 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 23 LINTON-STOCKTON 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, the amount expended for two key line items was not supported by the ledger. 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 2023-004 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, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation was required to submit annual data reports 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. 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 reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Furthermore, the data reported for three of the six reports could not be traced back to underlying records; therefore, the accuracy and completeness of the reports could not be verified. The following errors were identified: 1. ESSER I, Year 2 Report No activity was reported to the IDOE, per the report; however, the School Corporation's records indicate expenditures for the period of $81,312. The key line item, "Addressing Physical Health and Safety - Supplies," was understated by $1,829. The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Property," was understated by $16,915. 2. ESSER II, Year 1 Report No activity was reported to the IDOE, per the report; however, the School Corporation's records indicated expenditures for the period of $275,399. The key line item, "Addressing Physical Health and Safety - Purchased Professional and Technical Services," was understated by $6,041. The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies," was understated by $104,829. 3. ESSER II, Year 2 Report Expenditures reported to the IDOE, per the report, were $361,627; however, the School Corporation's records indicated expenditures for the period of $438,739. INDIANA STATE BOARD OF ACCOUNTS 23 SALEM COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) Uses - Supplies," was understated $77,112. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states int 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 24 SALEM COMMUNITY SCHOOLS 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, some data could not be traced back to the underlying 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 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 2023-004 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, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation was required to submit annual data reports 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. 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 reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Furthermore, the data reported for three of the six reports could not be traced back to underlying records; therefore, the accuracy and completeness of the reports could not be verified. The following errors were identified: 1. ESSER I, Year 2 Report No activity was reported to the IDOE, per the report; however, the School Corporation's records indicate expenditures for the period of $81,312. The key line item, "Addressing Physical Health and Safety - Supplies," was understated by $1,829. The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Property," was understated by $16,915. 2. ESSER II, Year 1 Report No activity was reported to the IDOE, per the report; however, the School Corporation's records indicated expenditures for the period of $275,399. The key line item, "Addressing Physical Health and Safety - Purchased Professional and Technical Services," was understated by $6,041. The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies," was understated by $104,829. 3. ESSER II, Year 2 Report Expenditures reported to the IDOE, per the report, were $361,627; however, the School Corporation's records indicated expenditures for the period of $438,739. INDIANA STATE BOARD OF ACCOUNTS 23 SALEM COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) Uses - Supplies," was understated $77,112. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states int 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 24 SALEM COMMUNITY SCHOOLS 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, some data could not be traced back to the underlying 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 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 2023-004 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, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation was required to submit annual data reports 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. 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 reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Furthermore, the data reported for three of the six reports could not be traced back to underlying records; therefore, the accuracy and completeness of the reports could not be verified. The following errors were identified: 1. ESSER I, Year 2 Report No activity was reported to the IDOE, per the report; however, the School Corporation's records indicate expenditures for the period of $81,312. The key line item, "Addressing Physical Health and Safety - Supplies," was understated by $1,829. The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Property," was understated by $16,915. 2. ESSER II, Year 1 Report No activity was reported to the IDOE, per the report; however, the School Corporation's records indicated expenditures for the period of $275,399. The key line item, "Addressing Physical Health and Safety - Purchased Professional and Technical Services," was understated by $6,041. The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies," was understated by $104,829. 3. ESSER II, Year 2 Report Expenditures reported to the IDOE, per the report, were $361,627; however, the School Corporation's records indicated expenditures for the period of $438,739. INDIANA STATE BOARD OF ACCOUNTS 23 SALEM COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) Uses - Supplies," was understated $77,112. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states int 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 24 SALEM COMMUNITY SCHOOLS 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, some data could not be traced back to the underlying 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 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 2023-004 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, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation was required to submit annual data reports 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. 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 reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Furthermore, the data reported for three of the six reports could not be traced back to underlying records; therefore, the accuracy and completeness of the reports could not be verified. The following errors were identified: 1. ESSER I, Year 2 Report No activity was reported to the IDOE, per the report; however, the School Corporation's records indicate expenditures for the period of $81,312. The key line item, "Addressing Physical Health and Safety - Supplies," was understated by $1,829. The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Property," was understated by $16,915. 2. ESSER II, Year 1 Report No activity was reported to the IDOE, per the report; however, the School Corporation's records indicated expenditures for the period of $275,399. The key line item, "Addressing Physical Health and Safety - Purchased Professional and Technical Services," was understated by $6,041. The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies," was understated by $104,829. 3. ESSER II, Year 2 Report Expenditures reported to the IDOE, per the report, were $361,627; however, the School Corporation's records indicated expenditures for the period of $438,739. INDIANA STATE BOARD OF ACCOUNTS 23 SALEM COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) Uses - Supplies," was understated $77,112. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states int 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 24 SALEM COMMUNITY SCHOOLS 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, some data could not be traced back to the underlying 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 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 2023-004 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, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation was required to submit annual data reports 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. 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 reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Furthermore, the data reported for three of the six reports could not be traced back to underlying records; therefore, the accuracy and completeness of the reports could not be verified. The following errors were identified: 1. ESSER I, Year 2 Report No activity was reported to the IDOE, per the report; however, the School Corporation's records indicate expenditures for the period of $81,312. The key line item, "Addressing Physical Health and Safety - Supplies," was understated by $1,829. The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Property," was understated by $16,915. 2. ESSER II, Year 1 Report No activity was reported to the IDOE, per the report; however, the School Corporation's records indicated expenditures for the period of $275,399. The key line item, "Addressing Physical Health and Safety - Purchased Professional and Technical Services," was understated by $6,041. The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies," was understated by $104,829. 3. ESSER II, Year 2 Report Expenditures reported to the IDOE, per the report, were $361,627; however, the School Corporation's records indicated expenditures for the period of $438,739. INDIANA STATE BOARD OF ACCOUNTS 23 SALEM COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) Uses - Supplies," was understated $77,112. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states int 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 24 SALEM COMMUNITY SCHOOLS 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, some data could not be traced back to the underlying 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 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 2023-004 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, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation was required to submit annual data reports 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. 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 reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Furthermore, the data reported for three of the six reports could not be traced back to underlying records; therefore, the accuracy and completeness of the reports could not be verified. The following errors were identified: 1. ESSER I, Year 2 Report No activity was reported to the IDOE, per the report; however, the School Corporation's records indicate expenditures for the period of $81,312. The key line item, "Addressing Physical Health and Safety - Supplies," was understated by $1,829. The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Property," was understated by $16,915. 2. ESSER II, Year 1 Report No activity was reported to the IDOE, per the report; however, the School Corporation's records indicated expenditures for the period of $275,399. The key line item, "Addressing Physical Health and Safety - Purchased Professional and Technical Services," was understated by $6,041. The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Supplies," was understated by $104,829. 3. ESSER II, Year 2 Report Expenditures reported to the IDOE, per the report, were $361,627; however, the School Corporation's records indicated expenditures for the period of $438,739. INDIANA STATE BOARD OF ACCOUNTS 23 SALEM COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) Uses - Supplies," was understated $77,112. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states int 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 24 SALEM COMMUNITY SCHOOLS 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, some data could not be traced back to the underlying 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 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 2023-003 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): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion 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 School Corporation was required to submit six annual data reports during the audit period. None of the annual data reports were submitted. Upon inquiry of the School Corporation to determine why the reports were not submitted, the School Corporation explained they had interpreted the reports to be final reports submitted upon completion of the grant not annual reports of expenditures. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Reimbursement Requests To gain an understanding of how the School Corporation spent the COVID-19 - Education Stabilization Fund award, all reimbursement requests submitted to the IDOE were requested. Five of the ten reimbursement requests submitted to the IDOE could not be located. As such, we determined reimbursement requests for the audit period should be further tested. The School Corporation's process was to complete reimbursement requests on a periodic basis to obtain reimbursement for expenditures paid. Although the reimbursement requests were prepared by the Treasurer utilizing various ledger reports and were reviewed by a second knowledgeable employee, the process did not prevent, or detect and correct, errors. Of the ten reimbursement requests received, as noted above, five could not be provided for audit. Therefore, we were unable to substantiate the expenses reimbursed by those requests or if the requests were mathematically accurate or fairly presented. The remaining five reimbursement requests were tested without issue. The lack of internal controls was a systemic issue throughout the audit period. The lack of documentation was isolated to the five reimbursement requests that could not be provided for audit. INDIANA STATE BOARD OF ACCOUNTS 18 SOUTH CENTRAL 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 200.302(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." 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. . . ." 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, annual data reports were noted submitted to the IDOE, and reimbursement requests were not retained for audit. INDIANA STATE BOARD OF ACCOUNTS 19 SOUTH CENTRAL 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 reports are submitted and supporting documentation is 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.
FINDING 2023-003 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): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion 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 School Corporation was required to submit six annual data reports during the audit period. None of the annual data reports were submitted. Upon inquiry of the School Corporation to determine why the reports were not submitted, the School Corporation explained they had interpreted the reports to be final reports submitted upon completion of the grant not annual reports of expenditures. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Reimbursement Requests To gain an understanding of how the School Corporation spent the COVID-19 - Education Stabilization Fund award, all reimbursement requests submitted to the IDOE were requested. Five of the ten reimbursement requests submitted to the IDOE could not be located. As such, we determined reimbursement requests for the audit period should be further tested. The School Corporation's process was to complete reimbursement requests on a periodic basis to obtain reimbursement for expenditures paid. Although the reimbursement requests were prepared by the Treasurer utilizing various ledger reports and were reviewed by a second knowledgeable employee, the process did not prevent, or detect and correct, errors. Of the ten reimbursement requests received, as noted above, five could not be provided for audit. Therefore, we were unable to substantiate the expenses reimbursed by those requests or if the requests were mathematically accurate or fairly presented. The remaining five reimbursement requests were tested without issue. The lack of internal controls was a systemic issue throughout the audit period. The lack of documentation was isolated to the five reimbursement requests that could not be provided for audit. INDIANA STATE BOARD OF ACCOUNTS 18 SOUTH CENTRAL 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 200.302(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." 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. . . ." 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, annual data reports were noted submitted to the IDOE, and reimbursement requests were not retained for audit. INDIANA STATE BOARD OF ACCOUNTS 19 SOUTH CENTRAL 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 reports are submitted and supporting documentation is 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.
FINDING 2023-003 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): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion 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 School Corporation was required to submit six annual data reports during the audit period. None of the annual data reports were submitted. Upon inquiry of the School Corporation to determine why the reports were not submitted, the School Corporation explained they had interpreted the reports to be final reports submitted upon completion of the grant not annual reports of expenditures. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Reimbursement Requests To gain an understanding of how the School Corporation spent the COVID-19 - Education Stabilization Fund award, all reimbursement requests submitted to the IDOE were requested. Five of the ten reimbursement requests submitted to the IDOE could not be located. As such, we determined reimbursement requests for the audit period should be further tested. The School Corporation's process was to complete reimbursement requests on a periodic basis to obtain reimbursement for expenditures paid. Although the reimbursement requests were prepared by the Treasurer utilizing various ledger reports and were reviewed by a second knowledgeable employee, the process did not prevent, or detect and correct, errors. Of the ten reimbursement requests received, as noted above, five could not be provided for audit. Therefore, we were unable to substantiate the expenses reimbursed by those requests or if the requests were mathematically accurate or fairly presented. The remaining five reimbursement requests were tested without issue. The lack of internal controls was a systemic issue throughout the audit period. The lack of documentation was isolated to the five reimbursement requests that could not be provided for audit. INDIANA STATE BOARD OF ACCOUNTS 18 SOUTH CENTRAL 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 200.302(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." 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. . . ." 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, annual data reports were noted submitted to the IDOE, and reimbursement requests were not retained for audit. INDIANA STATE BOARD OF ACCOUNTS 19 SOUTH CENTRAL 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 reports are submitted and supporting documentation is 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.
FINDING 2023-003 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): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion 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 School Corporation was required to submit six annual data reports during the audit period. None of the annual data reports were submitted. Upon inquiry of the School Corporation to determine why the reports were not submitted, the School Corporation explained they had interpreted the reports to be final reports submitted upon completion of the grant not annual reports of expenditures. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Reimbursement Requests To gain an understanding of how the School Corporation spent the COVID-19 - Education Stabilization Fund award, all reimbursement requests submitted to the IDOE were requested. Five of the ten reimbursement requests submitted to the IDOE could not be located. As such, we determined reimbursement requests for the audit period should be further tested. The School Corporation's process was to complete reimbursement requests on a periodic basis to obtain reimbursement for expenditures paid. Although the reimbursement requests were prepared by the Treasurer utilizing various ledger reports and were reviewed by a second knowledgeable employee, the process did not prevent, or detect and correct, errors. Of the ten reimbursement requests received, as noted above, five could not be provided for audit. Therefore, we were unable to substantiate the expenses reimbursed by those requests or if the requests were mathematically accurate or fairly presented. The remaining five reimbursement requests were tested without issue. The lack of internal controls was a systemic issue throughout the audit period. The lack of documentation was isolated to the five reimbursement requests that could not be provided for audit. INDIANA STATE BOARD OF ACCOUNTS 18 SOUTH CENTRAL 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 200.302(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." 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. . . ." 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, annual data reports were noted submitted to the IDOE, and reimbursement requests were not retained for audit. INDIANA STATE BOARD OF ACCOUNTS 19 SOUTH CENTRAL 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 reports are submitted and supporting documentation is 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.
2023-003 – UNIFORM GUIDANCE WRITTEN POLICIES AND PROCEDURES Type of Finding: (F) Significant Deficiency in Internal Control Over Compliance of Federal Awards, (G) Instance of Non-compliance related to Federal Awards, and (H) Other Non-compliance Required to be Reported per Section 12-6-5 NMSA 1978 Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition During the audit, we noted the Authority’s policies and procedures required updates to conform with Uniform Guidance. Criteria Uniform Guidance requires that procedures are documented related to cash management, cost allowability, procurement, and conflict of interest provisions. Cash Management 2 C.F.R. Part 200, §200.302(b)(6) “Written procedures to implement the requirements of §200.305 Payment.” • Written procedures should answer questions such as: who determines that the cash management procedures are being followed; how the procedures are followed; when the steps are performed; what is being verified. A subrecipient’s Cash Management written procedures must address both advance payments and cost reimbursement. The written procedures should include steps involved in the obligating, liquidating, and claiming of federal funds. Allowable Costs 2 C.F.R. Part 200, §200.302(b)(7) “Written procedures for determining the allowability of costs in accordance with Subpart E—Cost Principles of this part and the terms and conditions of the Federal award.” • Written procedures on Allowable Costs must address how the subrecipient is ensuring that costs on the federal grant, and ultimately claimed, are allowed under the individual Federal program and in accordance with the cost principles established in the Uniform Grant Guidance. Conflict of Interest 2 C.F.R. Part 200, §200.318(c)(1) “The non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts.” • Written procedures such as required per 2 C.F.R. Part 200, §200.318 should not be a reiteration of the federal requirements or the policies or goals. Rather, procedures are the step-by-step process that is used to obtain the goal or the steps that are necessary to be in compliance with the federal requirement. Written procedures should answer questions like: what is considered a conflict of interest; how is it determined that an employee has a conflict of interest, how it is determined the procedures are followed; when the steps are performed; what is being verified. Procurement CFR 2, § 200.318(a) The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part. Cause The Authority has not previously required a single audit under Uniform Guidance. As a result, the Authority’s policies and procedures have not been updated to include the required language. Effect The Authority is noncompliant with the requirements of Uniform Guidance, which could result in future findings. Recommendation We recommend that the Authority review their current policies and procedures and bring them up to date with the appropriate language as required per Uniform Guidance. Adding the language will ensure that the Authority is always in compliance when single audits are required. Management Response CRRUA has not previously required a single audit under Uniform Guidance, CRRUA will work with DAC Grant and Accounting team, who assist in oversight per contract agreement, to develop written procedures and policies per Uniform Guidance requirements. In addition, CRRUA will enlist external assistance for additional review and recommendations regarding the drafted policies and procedures. Finding resolved timeline: Implemented by June 30, 2024. In the next 3 months CRRUA will implement policies and procedures required to conform with Uniform Guidance. Designation of employee position responsible for meeting this deadline: Office Manager
2023-003 – UNIFORM GUIDANCE WRITTEN POLICIES AND PROCEDURES Type of Finding: (F) Significant Deficiency in Internal Control Over Compliance of Federal Awards, (G) Instance of Non-compliance related to Federal Awards, and (H) Other Non-compliance Required to be Reported per Section 12-6-5 NMSA 1978 Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition During the audit, we noted the Authority’s policies and procedures required updates to conform with Uniform Guidance. Criteria Uniform Guidance requires that procedures are documented related to cash management, cost allowability, procurement, and conflict of interest provisions. Cash Management 2 C.F.R. Part 200, §200.302(b)(6) “Written procedures to implement the requirements of §200.305 Payment.” • Written procedures should answer questions such as: who determines that the cash management procedures are being followed; how the procedures are followed; when the steps are performed; what is being verified. A subrecipient’s Cash Management written procedures must address both advance payments and cost reimbursement. The written procedures should include steps involved in the obligating, liquidating, and claiming of federal funds. Allowable Costs 2 C.F.R. Part 200, §200.302(b)(7) “Written procedures for determining the allowability of costs in accordance with Subpart E—Cost Principles of this part and the terms and conditions of the Federal award.” • Written procedures on Allowable Costs must address how the subrecipient is ensuring that costs on the federal grant, and ultimately claimed, are allowed under the individual Federal program and in accordance with the cost principles established in the Uniform Grant Guidance. Conflict of Interest 2 C.F.R. Part 200, §200.318(c)(1) “The non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts.” • Written procedures such as required per 2 C.F.R. Part 200, §200.318 should not be a reiteration of the federal requirements or the policies or goals. Rather, procedures are the step-by-step process that is used to obtain the goal or the steps that are necessary to be in compliance with the federal requirement. Written procedures should answer questions like: what is considered a conflict of interest; how is it determined that an employee has a conflict of interest, how it is determined the procedures are followed; when the steps are performed; what is being verified. Procurement CFR 2, § 200.318(a) The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part. Cause The Authority has not previously required a single audit under Uniform Guidance. As a result, the Authority’s policies and procedures have not been updated to include the required language. Effect The Authority is noncompliant with the requirements of Uniform Guidance, which could result in future findings. Recommendation We recommend that the Authority review their current policies and procedures and bring them up to date with the appropriate language as required per Uniform Guidance. Adding the language will ensure that the Authority is always in compliance when single audits are required. Management Response CRRUA has not previously required a single audit under Uniform Guidance, CRRUA will work with DAC Grant and Accounting team, who assist in oversight per contract agreement, to develop written procedures and policies per Uniform Guidance requirements. In addition, CRRUA will enlist external assistance for additional review and recommendations regarding the drafted policies and procedures. Finding resolved timeline: Implemented by June 30, 2024. In the next 3 months CRRUA will implement policies and procedures required to conform with Uniform Guidance. Designation of employee position responsible for meeting this deadline: Office Manager
2023-003 – UNIFORM GUIDANCE WRITTEN POLICIES AND PROCEDURES Type of Finding: (F) Significant Deficiency in Internal Control Over Compliance of Federal Awards, (G) Instance of Non-compliance related to Federal Awards, and (H) Other Non-compliance Required to be Reported per Section 12-6-5 NMSA 1978 Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition During the audit, we noted the Authority’s policies and procedures required updates to conform with Uniform Guidance. Criteria Uniform Guidance requires that procedures are documented related to cash management, cost allowability, procurement, and conflict of interest provisions. Cash Management 2 C.F.R. Part 200, §200.302(b)(6) “Written procedures to implement the requirements of §200.305 Payment.” • Written procedures should answer questions such as: who determines that the cash management procedures are being followed; how the procedures are followed; when the steps are performed; what is being verified. A subrecipient’s Cash Management written procedures must address both advance payments and cost reimbursement. The written procedures should include steps involved in the obligating, liquidating, and claiming of federal funds. Allowable Costs 2 C.F.R. Part 200, §200.302(b)(7) “Written procedures for determining the allowability of costs in accordance with Subpart E—Cost Principles of this part and the terms and conditions of the Federal award.” • Written procedures on Allowable Costs must address how the subrecipient is ensuring that costs on the federal grant, and ultimately claimed, are allowed under the individual Federal program and in accordance with the cost principles established in the Uniform Grant Guidance. Conflict of Interest 2 C.F.R. Part 200, §200.318(c)(1) “The non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts.” • Written procedures such as required per 2 C.F.R. Part 200, §200.318 should not be a reiteration of the federal requirements or the policies or goals. Rather, procedures are the step-by-step process that is used to obtain the goal or the steps that are necessary to be in compliance with the federal requirement. Written procedures should answer questions like: what is considered a conflict of interest; how is it determined that an employee has a conflict of interest, how it is determined the procedures are followed; when the steps are performed; what is being verified. Procurement CFR 2, § 200.318(a) The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part. Cause The Authority has not previously required a single audit under Uniform Guidance. As a result, the Authority’s policies and procedures have not been updated to include the required language. Effect The Authority is noncompliant with the requirements of Uniform Guidance, which could result in future findings. Recommendation We recommend that the Authority review their current policies and procedures and bring them up to date with the appropriate language as required per Uniform Guidance. Adding the language will ensure that the Authority is always in compliance when single audits are required. Management Response CRRUA has not previously required a single audit under Uniform Guidance, CRRUA will work with DAC Grant and Accounting team, who assist in oversight per contract agreement, to develop written procedures and policies per Uniform Guidance requirements. In addition, CRRUA will enlist external assistance for additional review and recommendations regarding the drafted policies and procedures. Finding resolved timeline: Implemented by June 30, 2024. In the next 3 months CRRUA will implement policies and procedures required to conform with Uniform Guidance. Designation of employee position responsible for meeting this deadline: Office Manager
2023-003 – UNIFORM GUIDANCE WRITTEN POLICIES AND PROCEDURES Type of Finding: (F) Significant Deficiency in Internal Control Over Compliance of Federal Awards, (G) Instance of Non-compliance related to Federal Awards, and (H) Other Non-compliance Required to be Reported per Section 12-6-5 NMSA 1978 Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition During the audit, we noted the Authority’s policies and procedures required updates to conform with Uniform Guidance. Criteria Uniform Guidance requires that procedures are documented related to cash management, cost allowability, procurement, and conflict of interest provisions. Cash Management 2 C.F.R. Part 200, §200.302(b)(6) “Written procedures to implement the requirements of §200.305 Payment.” • Written procedures should answer questions such as: who determines that the cash management procedures are being followed; how the procedures are followed; when the steps are performed; what is being verified. A subrecipient’s Cash Management written procedures must address both advance payments and cost reimbursement. The written procedures should include steps involved in the obligating, liquidating, and claiming of federal funds. Allowable Costs 2 C.F.R. Part 200, §200.302(b)(7) “Written procedures for determining the allowability of costs in accordance with Subpart E—Cost Principles of this part and the terms and conditions of the Federal award.” • Written procedures on Allowable Costs must address how the subrecipient is ensuring that costs on the federal grant, and ultimately claimed, are allowed under the individual Federal program and in accordance with the cost principles established in the Uniform Grant Guidance. Conflict of Interest 2 C.F.R. Part 200, §200.318(c)(1) “The non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts.” • Written procedures such as required per 2 C.F.R. Part 200, §200.318 should not be a reiteration of the federal requirements or the policies or goals. Rather, procedures are the step-by-step process that is used to obtain the goal or the steps that are necessary to be in compliance with the federal requirement. Written procedures should answer questions like: what is considered a conflict of interest; how is it determined that an employee has a conflict of interest, how it is determined the procedures are followed; when the steps are performed; what is being verified. Procurement CFR 2, § 200.318(a) The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part. Cause The Authority has not previously required a single audit under Uniform Guidance. As a result, the Authority’s policies and procedures have not been updated to include the required language. Effect The Authority is noncompliant with the requirements of Uniform Guidance, which could result in future findings. Recommendation We recommend that the Authority review their current policies and procedures and bring them up to date with the appropriate language as required per Uniform Guidance. Adding the language will ensure that the Authority is always in compliance when single audits are required. Management Response CRRUA has not previously required a single audit under Uniform Guidance, CRRUA will work with DAC Grant and Accounting team, who assist in oversight per contract agreement, to develop written procedures and policies per Uniform Guidance requirements. In addition, CRRUA will enlist external assistance for additional review and recommendations regarding the drafted policies and procedures. Finding resolved timeline: Implemented by June 30, 2024. In the next 3 months CRRUA will implement policies and procedures required to conform with Uniform Guidance. Designation of employee position responsible for meeting this deadline: Office Manager
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, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls 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. INDIANA STATE BOARD OF ACCOUNTS 18 NORTH PUTNAM COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 compiled, prepared, and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Additionally, two of the six reports tested contained errors. The errors were as follows: For the ESSER I, Year 3 report, the School Corporation could not provide supporting documentation for the key line items "Total Mandatory Subgrant Amount Expended in Current Reporting Period" and "Amount Expended on Operational Continuity and Other Allowed Uses." For the ESSER III, Year 2 report, it was determined that the report was incomplete. The report indicated no expenditures during the applicable reporting period, July 1, 2021 to June 30, 2022; however, expenditures per the School Corporation's records totaled $568,459. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 3 and ESSER III, Year 2 reports. 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. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." INDIANA STATE BOARD OF ACCOUNTS 19 NORTH PUTNAM COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. . . ." 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, two reports had errors and were not supported by the School Corporation's 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 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 ledgers. 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, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls 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. INDIANA STATE BOARD OF ACCOUNTS 18 NORTH PUTNAM COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 compiled, prepared, and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Additionally, two of the six reports tested contained errors. The errors were as follows: For the ESSER I, Year 3 report, the School Corporation could not provide supporting documentation for the key line items "Total Mandatory Subgrant Amount Expended in Current Reporting Period" and "Amount Expended on Operational Continuity and Other Allowed Uses." For the ESSER III, Year 2 report, it was determined that the report was incomplete. The report indicated no expenditures during the applicable reporting period, July 1, 2021 to June 30, 2022; however, expenditures per the School Corporation's records totaled $568,459. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 3 and ESSER III, Year 2 reports. 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. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." INDIANA STATE BOARD OF ACCOUNTS 19 NORTH PUTNAM COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. . . ." 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, two reports had errors and were not supported by the School Corporation's 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 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 ledgers. 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, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls 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. INDIANA STATE BOARD OF ACCOUNTS 18 NORTH PUTNAM COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 compiled, prepared, and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Additionally, two of the six reports tested contained errors. The errors were as follows: For the ESSER I, Year 3 report, the School Corporation could not provide supporting documentation for the key line items "Total Mandatory Subgrant Amount Expended in Current Reporting Period" and "Amount Expended on Operational Continuity and Other Allowed Uses." For the ESSER III, Year 2 report, it was determined that the report was incomplete. The report indicated no expenditures during the applicable reporting period, July 1, 2021 to June 30, 2022; however, expenditures per the School Corporation's records totaled $568,459. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 3 and ESSER III, Year 2 reports. 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. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." INDIANA STATE BOARD OF ACCOUNTS 19 NORTH PUTNAM COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. . . ." 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, two reports had errors and were not supported by the School Corporation's 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 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 ledgers. 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, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls 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. INDIANA STATE BOARD OF ACCOUNTS 18 NORTH PUTNAM COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 compiled, prepared, and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Additionally, two of the six reports tested contained errors. The errors were as follows: For the ESSER I, Year 3 report, the School Corporation could not provide supporting documentation for the key line items "Total Mandatory Subgrant Amount Expended in Current Reporting Period" and "Amount Expended on Operational Continuity and Other Allowed Uses." For the ESSER III, Year 2 report, it was determined that the report was incomplete. The report indicated no expenditures during the applicable reporting period, July 1, 2021 to June 30, 2022; however, expenditures per the School Corporation's records totaled $568,459. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 3 and ESSER III, Year 2 reports. 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. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." INDIANA STATE BOARD OF ACCOUNTS 19 NORTH PUTNAM COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. . . ." 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, two reports had errors and were not supported by the School Corporation's 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 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 ledgers. 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, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls 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. INDIANA STATE BOARD OF ACCOUNTS 18 NORTH PUTNAM COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 compiled, prepared, and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Additionally, two of the six reports tested contained errors. The errors were as follows: For the ESSER I, Year 3 report, the School Corporation could not provide supporting documentation for the key line items "Total Mandatory Subgrant Amount Expended in Current Reporting Period" and "Amount Expended on Operational Continuity and Other Allowed Uses." For the ESSER III, Year 2 report, it was determined that the report was incomplete. The report indicated no expenditures during the applicable reporting period, July 1, 2021 to June 30, 2022; however, expenditures per the School Corporation's records totaled $568,459. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 3 and ESSER III, Year 2 reports. 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. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." INDIANA STATE BOARD OF ACCOUNTS 19 NORTH PUTNAM COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. . . ." 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, two reports had errors and were not supported by the School Corporation's 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 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 ledgers. 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, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls 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. INDIANA STATE BOARD OF ACCOUNTS 18 NORTH PUTNAM COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 compiled, prepared, and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Additionally, two of the six reports tested contained errors. The errors were as follows: For the ESSER I, Year 3 report, the School Corporation could not provide supporting documentation for the key line items "Total Mandatory Subgrant Amount Expended in Current Reporting Period" and "Amount Expended on Operational Continuity and Other Allowed Uses." For the ESSER III, Year 2 report, it was determined that the report was incomplete. The report indicated no expenditures during the applicable reporting period, July 1, 2021 to June 30, 2022; however, expenditures per the School Corporation's records totaled $568,459. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 3 and ESSER III, Year 2 reports. 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. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." INDIANA STATE BOARD OF ACCOUNTS 19 NORTH PUTNAM COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. . . ." 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, two reports had errors and were not supported by the School Corporation's 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 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 ledgers. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2023-024 Improve Controls over Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Justice Pass-Through Entity: None AL Number and Title: 16.575 – Crime Victim Assistance Federal Award Numbers: 2018-V2-GX-0066 (Year: 2018), 2019-V2-GX-0019 (Year: 2019), 2020-V2-GX-0014 (Year: 2020), 15POVC-21-GG-00619-ASSI (Year: 2021), 15POVC-22-GG-00691-ASSI (Year: 2022) Questioned Costs: None Identified Description: The Criminal Justice Coordinating Council, an attached agency of the Georgia Bureau of Investigation, should improve internal controls over required financial, performance, and Federal Funding Accountability and Transparency Act reporting to ensure that information is reported appropriately. Background Information: The Crime Victim Assistance (CVA) Program, created under the 1984 Victims of Crime Act, provides federal funding to support victim assistance and compensation programs, to provide training for diverse professionals who work with victims, to develop projects to enhance victims’ rights and services, and to undertake public education and awareness activities on behalf of crime victims. The Georgia Criminal Justice Coordinating Council (CJCC) was designated as the custodian of the CVA funds for the State of Georgia. In that capacity, the CJCC was required to report details associated with CVA expenditures to the U.S. Department of Justice (USDOJ). This expenditure information is submitted through the JustGrants portal and is reflected on the quarterly SF-425 Federal Financial Report (FFR). In addition, the CJCC was required to report information relevant to the performance and activities of the CVA program to the USDOJ on the quarterly Performance Management Tool (PMT). Lastly, Funds associated with the Crime Victim Assistance program are provided to the CJCC for allocation to eligible subrecipients. Because the CJCC subgrants program funds to various entities, the CJCC must comply with the Federal Funding Accountability and Transparency Act of 2006 (FFATA). The FFATA requirements were signed into law on September 26, 2006 in an effort to give the American public access to information on how their tax dollars are being spent. Criteria: As a recipient of federal awards, the CJCC is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. In addition, the CJCC is required to report cumulative expenditures on a quarterly basis in accordance with the USDOJ Grants Financial Guide and provisions included in the Uniform Guidance, Section 200.328 – Financial Reporting, which state, in part, that “the non-Federal entity’s financial management systems must… be sufficient to permit the preparation of reports required by general and program-specific terms and conditions.” In addition, provisions included in the Uniform Guidance, Section 200.302(b)(2) state, in part, that the non-Federal entity’s financial management systems must provide for “accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements.” Condition: Our audit of the CVA program revealed there was no evidence of internal controls over the FFR, PMT, and FFATA reporting requirements. Additionally, a sample of four grants associated with the CVA program were randomly selected for testing using a non-statistical sampling method. This testing revealed that the cumulative expenses reported on the third quarter submission of the FFR for the FY2021 grant were overstated by $916,176.95. Subsequent submissions reflected the correct cumulative total. Cause: Though formal internal controls processes have been documented for the FFR reports, the controls were not implemented due in part to a lack of sufficient staffing at the agency. Additionally, control processes have not been documented for the PMT and FFATA reporting requirements. Effect: The deficiencies noted in the FFR reporting process resulted in noncompliance with federal regulations as required by the USDOJ. Overstated expenditures could impact the decision-making process at the federal level due to the FFR being used for general management of awards made under federal financial assistance programs. Furthermore, though it does not appear that inappropriate information was transmitted on the PMT or FFATA reports, this could occur if appropriate controls are not documented and functioning properly. Recommendation: The CJCC should review their current FFR control policy and make updates if needed. The CJCC should, then, implement and maintain documentation of the control noted in their policy. Additionally, the CJCC should design and implement controls over their PMT and FFATA reporting and ensure evidence of each control is maintained on-file. Views of Responsible Officials: CJCC concurs with the finding. The reports which contained errors were the result of insufficient staffing and capacity during the audit period, allowing insufficient time and capacity for review. CJCC is compelled to reinforce however that no errors were noted in the PMT and FFATA reports, and that errors in FFR reports were submitted for correction, based upon the guidance of the US Department of Justice Office of Justice Programs. In regard to materiality, CJCC notes that these awards are appropriated as part of a multi-billion dollar program, on a formula basis that does not account for performance or quarterly spend. As such, temporary misstatements do not have any significant impact on federal reporting. It is additionally important to note, the federal systems in which these reports are submitted do not facilitate secondary reviewers or control processes without account sharing, which is expressly forbidden.
2023-026 Improve Controls over Financial Reporting Compliance Requirement: Reporting Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Labor Pass-Through Entity: None AL Numbers and Titles: 17.207 – Employment Service/Wagner-Peyser Funded Activities 17.225 – Unemployment Insurance 17.225 – COVID-19 – Unemployment Insurance Federal Award Numbers: UI347102055A13 (Year:2020), UI370592155A13 (Year:2021), UI322182255A13 (Year:2022), ES353382055A13 (Year:2020), ES367492155A13 (Year:2021) Questioned Costs: None Identified Repeat of Prior Year Finding: 2021-037 Description: The Georgia Department of Labor submitted inaccurate financial reports for the Unemployment Insurance and Employment Service/Wagner-Peyser Funded Activities Programs to the U.S. Department of Labor. Background Information: The Unemployment Insurance (UI) program, created by the Social Security Act (Pub. L. No. 74-271), provides Unemployment Compensation (UC) benefits to workers who are unemployed through no fault of their own and are seeking reemployment. To receive benefits, claimants must be able to work, available for work, and actively seeking work. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional UI provisions. Title II, Subtitle A of the CARES Act, authorizes the following temporary UI programs: • Federal Pandemic Unemployment Compensation (FPUC) – The FPUC program provides eligible individuals with $600 per week in addition to the weekly benefit amount they receive from certain other UC programs. • Pandemic Emergency Unemployment Compensation (PEUC) – The PEUC program provides up to 13 weeks of benefits to individuals who have exhausted all rights to regular compensation under State law or Federal law with respect to a benefit year that ended on or after July 1, 2019, have no rights to regular compensation with respect to a week under any other State or Federal UC law, are not receiving compensation with respect to such week under the UC law of Canada, and are able to work, available to work, and actively seeking work. • Pandemic Unemployment Assistance (PUA) – The PUA program provides up to 39 weeks of benefits to those individuals who are not eligible for regular UC or extended benefits under State or Federal law or PEUC, including those who have exhausted all rights to such benefits. In addition, the State Extended Benefits (SEB) program, which is an extension of UC benefits, becomes available for payment when the State’s 13-week insured unemployment rate (IUR) exceeds 5% and pays claimants up to an additional 13 weeks of compensation. Under the SEB program, the State is required to provide 50% of the amounts paid to the majority of eligible SEB claimants, which are those not covered by Federal law or special provisions of State law. However, under the CARES Act, the U.S. Department of Labor will reimburse the State at 100% of eligible costs for the SEB program. The State of Georgia became eligible to pay SEB May 10, 2020. However, the first payable weekending date (WED) was on July 4, 2020, as the first payable WED of PEUC was April 4, 2020. Further, the last payable WED for SEB was February 6, 2021. Additionally, The Georgia Department of Labor (DOL) is responsible for the administration and monitoring of Georgia's Employment Services Cluster programs, including carrying out the Employment Services/Wagner-Peyser (ES) funded activities. The main purpose of the ES program is to improve the functioning of the nation’s labor markets by bringing together individuals seeking employment and employers seeking workers. The DOL is responsible for reporting expenditures related to these programs to the U.S. Department of Labor’s Employment and Training Administration (ETA). Every grant awarded by the ETA requires accurate quarterly and annual reporting as a part of sound financial and management responsibilities. This reporting supports the ETA’s ability to measure fund utilization for performance accountability and assess compliance with statutory expenditure requirements. This information also helps measure successful outcomes for participants, ensure sound service delivery and reporting practices, and determine whether the federal funds achieved maximum benefit. The ETA-9130, Financial Status Report is used to report program and administrative expenditures. The DOL is required to submit quarterly financial reports for each UI and ESC program that they operate within 45 days after the end of reporting quarter. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. Criteria: As a recipient of federal awards, the DOL is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.302(a) state, in part, that “the non-Federal entity’s financial management systems must… be sufficient to permit the preparation of reports required by general and program-specific terms and conditions.” In addition, provisions included in the Uniform Guidance, Section 200.302(b)(2) state, in part, that the non-Federal entity’s financial management systems must provide for “accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements.” Condition: Unemployment Insurance - The ETA-9130 reports for the quarters ending September 2022 and June 2023 were reviewed to ensure that program and administrative expenditures were reported in a timely and accurate manner. For six of the 40 reports tested, the amounts reported did not agree with the amounts reflected in the accounting records. Four reports have more expenditures on their general ledger than obligated funds, one report was incorrectly entered in the reporting system, and one report could not be traced to the accounting records. Employment Service/Wagner-Peyser Funded Activities - The ETA-9130 reports for the quarters ending September 2022 and December 2022 were reviewed. For two of the 11 reports tested, the amounts reported did not agree with the amounts reflected in the accounting records. In both instances, the DOL reported more expenditures than what was reflected in their accounting records. Variances identified on each report are as follows: Cause: Unemployment Insurance - Separate ETA-9130 reports must be completed for each program and each fund source (subaccount) awarded to the DOL. While the DOL utilizes one general ledger report to prepare some ETA-9130 reports, the DOL uses multiple general ledger reports to prepare other ETA-9130 reports. In the instances of over obligated grant awards, the reporting system does not allow the preparer to enter more expenditures than funds authorized. Employment Service/Wagner-Peyser Funded Activities – The program moved to the Technical College System of Georgia (TCSG) in January 2023, and the final ETA-9130 reports for the grants transferring to the TCSG were to be submitted by February 14, 2023. The reports submitted to the ETA by the DOL included expenditures that were not incurred until after the program and program staff had moved to the TCSG, who assumed operation of grant activities. According to a communication between the DOL and U.S. Department of Labor, the expenditure amount to be reported on the final ETA-9130 report for quarter ending December 31, 2022, was to agree to draw down amount in the Payment Management System (PMS). However, the DOL drew down funds for expenditures that had yet to be incurred and reported that amount on the final ETA-9130 report. Effect: The submitting of inaccurate ETA-9130 reports resulted in noncompliance with federal regulations and the Uniform Guidance for both programs as noted above. Additionally, submitting incorrect reports diminishes the U.S. Department of Labor’s ability to effectively monitor the UI program. Recommendation: We recommend that the DOL review existing policies and procedures to ensure that it has established and is maintaining internal controls related to compliance with federal laws, regulations, and program compliance reports. This review should specifically address requirements for preparing the ETA-9130 reports. The DOL should ensure that personnel responsible for the ETA-9130 reports are appropriately trained and are familiar with these compliance requirements. In addition, we recommend that the DOL create queries and general ledger reports that only report the expenditures charged to each individual program as reflected on the grant award. Furthermore, spreadsheets and tools should be developed to balance report totals and identify errors before entering amounts into the federal reporting website. Views of Responsible Officials: GDOL concurs with this finding: Regarding the pandemic Grants noted that were all under #UI34710-20-55-A-13: • The UI Regular Grant typically provides the amount of available grant funds in advance based on 1.) and estimated number of claims to be processed int eh current year (based on the average of two years prior activity) and 2.) the average processing times (based pm the average of two years prior processing times). • In contrast, many of the pandemic grants are based on actual claims activity with monies being awarded “after the fact” with no consideration given to the aforementioned criteria as no prior- year basis exists. • GDOL experienced delays in some pandemic allocations due to delays in programing and the submission of the new reports for pandemic activities (FRUC, PEUC and PUA). All late reports have ben submitted and we are reconciling grants as deemed appropriate. • With reimbursement based on pandemic claims activity, there was no clear mechanism for GDOL to be able to “forecast” the amount of time and effort needed to process the cyclical and unpredictable number of pandemic claims. As such, best efforts were made to estimate in this regard. • The 3073 FPUC grant is the only grant for which we have been reimbursed at 100%. However, due to the most recent implementation of stop/gain loss, we are no longer being reimbursed at the full amount. Regarding the Employment Service/ Wagner-Peyser Funded Grants noted, the program period of performance was July 1, 2022 thru September 30, 2025. GDOL received instructions from USDOL on January 19, 2023 requesting a final ETA-9130 report be submitted by February 15th for grants that were being transferred to TCSG and offered technical assistance in completing the reports. The National office was designated to de-obligate the funds remaining and issue new grant numbers to obligate these funds at TCSG; however, several things occurred that caused the process to be delayed: • The required action was to check box 6 as yes (for the final 9130 reports) and 10g (Federal Share of Unliquidated Obligation) had to be zero although there were Unliquidated Obligations in the system. • Although the Wagner Peyer program was transferred to TCSG in January 2023, eligible costs continued. • The need for expenditure reconciliations was discussed with USDOL Regional Office and anticipated funds were drawn in lieu of billing TCSG. • Associated eligible costs were reconciled to the Wagner Peyser Ledger via manual journal entries in lieu of billing TCSG. • In addition, USDOL implemented a new GrantSolutions to replace its legacy grant processing system, E-Grants. USDOL replaced its legacy E-Grants Grantee Reporting System (GRS) by transitioning to PMS for grant recipients submission of the quarterly ETA-9130 financial reports on February 6,2023. • Although training was taken for this process, the overall reconciliation process was delated all reconciling items were resolved by the 9/30/23 reporting period.
2023-026 Improve Controls over Financial Reporting Compliance Requirement: Reporting Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Labor Pass-Through Entity: None AL Numbers and Titles: 17.207 – Employment Service/Wagner-Peyser Funded Activities 17.225 – Unemployment Insurance 17.225 – COVID-19 – Unemployment Insurance Federal Award Numbers: UI347102055A13 (Year:2020), UI370592155A13 (Year:2021), UI322182255A13 (Year:2022), ES353382055A13 (Year:2020), ES367492155A13 (Year:2021) Questioned Costs: None Identified Repeat of Prior Year Finding: 2021-037 Description: The Georgia Department of Labor submitted inaccurate financial reports for the Unemployment Insurance and Employment Service/Wagner-Peyser Funded Activities Programs to the U.S. Department of Labor. Background Information: The Unemployment Insurance (UI) program, created by the Social Security Act (Pub. L. No. 74-271), provides Unemployment Compensation (UC) benefits to workers who are unemployed through no fault of their own and are seeking reemployment. To receive benefits, claimants must be able to work, available for work, and actively seeking work. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional UI provisions. Title II, Subtitle A of the CARES Act, authorizes the following temporary UI programs: • Federal Pandemic Unemployment Compensation (FPUC) – The FPUC program provides eligible individuals with $600 per week in addition to the weekly benefit amount they receive from certain other UC programs. • Pandemic Emergency Unemployment Compensation (PEUC) – The PEUC program provides up to 13 weeks of benefits to individuals who have exhausted all rights to regular compensation under State law or Federal law with respect to a benefit year that ended on or after July 1, 2019, have no rights to regular compensation with respect to a week under any other State or Federal UC law, are not receiving compensation with respect to such week under the UC law of Canada, and are able to work, available to work, and actively seeking work. • Pandemic Unemployment Assistance (PUA) – The PUA program provides up to 39 weeks of benefits to those individuals who are not eligible for regular UC or extended benefits under State or Federal law or PEUC, including those who have exhausted all rights to such benefits. In addition, the State Extended Benefits (SEB) program, which is an extension of UC benefits, becomes available for payment when the State’s 13-week insured unemployment rate (IUR) exceeds 5% and pays claimants up to an additional 13 weeks of compensation. Under the SEB program, the State is required to provide 50% of the amounts paid to the majority of eligible SEB claimants, which are those not covered by Federal law or special provisions of State law. However, under the CARES Act, the U.S. Department of Labor will reimburse the State at 100% of eligible costs for the SEB program. The State of Georgia became eligible to pay SEB May 10, 2020. However, the first payable weekending date (WED) was on July 4, 2020, as the first payable WED of PEUC was April 4, 2020. Further, the last payable WED for SEB was February 6, 2021. Additionally, The Georgia Department of Labor (DOL) is responsible for the administration and monitoring of Georgia's Employment Services Cluster programs, including carrying out the Employment Services/Wagner-Peyser (ES) funded activities. The main purpose of the ES program is to improve the functioning of the nation’s labor markets by bringing together individuals seeking employment and employers seeking workers. The DOL is responsible for reporting expenditures related to these programs to the U.S. Department of Labor’s Employment and Training Administration (ETA). Every grant awarded by the ETA requires accurate quarterly and annual reporting as a part of sound financial and management responsibilities. This reporting supports the ETA’s ability to measure fund utilization for performance accountability and assess compliance with statutory expenditure requirements. This information also helps measure successful outcomes for participants, ensure sound service delivery and reporting practices, and determine whether the federal funds achieved maximum benefit. The ETA-9130, Financial Status Report is used to report program and administrative expenditures. The DOL is required to submit quarterly financial reports for each UI and ESC program that they operate within 45 days after the end of reporting quarter. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. Criteria: As a recipient of federal awards, the DOL is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.302(a) state, in part, that “the non-Federal entity’s financial management systems must… be sufficient to permit the preparation of reports required by general and program-specific terms and conditions.” In addition, provisions included in the Uniform Guidance, Section 200.302(b)(2) state, in part, that the non-Federal entity’s financial management systems must provide for “accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements.” Condition: Unemployment Insurance - The ETA-9130 reports for the quarters ending September 2022 and June 2023 were reviewed to ensure that program and administrative expenditures were reported in a timely and accurate manner. For six of the 40 reports tested, the amounts reported did not agree with the amounts reflected in the accounting records. Four reports have more expenditures on their general ledger than obligated funds, one report was incorrectly entered in the reporting system, and one report could not be traced to the accounting records. Employment Service/Wagner-Peyser Funded Activities - The ETA-9130 reports for the quarters ending September 2022 and December 2022 were reviewed. For two of the 11 reports tested, the amounts reported did not agree with the amounts reflected in the accounting records. In both instances, the DOL reported more expenditures than what was reflected in their accounting records. Variances identified on each report are as follows: Cause: Unemployment Insurance - Separate ETA-9130 reports must be completed for each program and each fund source (subaccount) awarded to the DOL. While the DOL utilizes one general ledger report to prepare some ETA-9130 reports, the DOL uses multiple general ledger reports to prepare other ETA-9130 reports. In the instances of over obligated grant awards, the reporting system does not allow the preparer to enter more expenditures than funds authorized. Employment Service/Wagner-Peyser Funded Activities – The program moved to the Technical College System of Georgia (TCSG) in January 2023, and the final ETA-9130 reports for the grants transferring to the TCSG were to be submitted by February 14, 2023. The reports submitted to the ETA by the DOL included expenditures that were not incurred until after the program and program staff had moved to the TCSG, who assumed operation of grant activities. According to a communication between the DOL and U.S. Department of Labor, the expenditure amount to be reported on the final ETA-9130 report for quarter ending December 31, 2022, was to agree to draw down amount in the Payment Management System (PMS). However, the DOL drew down funds for expenditures that had yet to be incurred and reported that amount on the final ETA-9130 report. Effect: The submitting of inaccurate ETA-9130 reports resulted in noncompliance with federal regulations and the Uniform Guidance for both programs as noted above. Additionally, submitting incorrect reports diminishes the U.S. Department of Labor’s ability to effectively monitor the UI program. Recommendation: We recommend that the DOL review existing policies and procedures to ensure that it has established and is maintaining internal controls related to compliance with federal laws, regulations, and program compliance reports. This review should specifically address requirements for preparing the ETA-9130 reports. The DOL should ensure that personnel responsible for the ETA-9130 reports are appropriately trained and are familiar with these compliance requirements. In addition, we recommend that the DOL create queries and general ledger reports that only report the expenditures charged to each individual program as reflected on the grant award. Furthermore, spreadsheets and tools should be developed to balance report totals and identify errors before entering amounts into the federal reporting website. Views of Responsible Officials: GDOL concurs with this finding: Regarding the pandemic Grants noted that were all under #UI34710-20-55-A-13: • The UI Regular Grant typically provides the amount of available grant funds in advance based on 1.) and estimated number of claims to be processed int eh current year (based on the average of two years prior activity) and 2.) the average processing times (based pm the average of two years prior processing times). • In contrast, many of the pandemic grants are based on actual claims activity with monies being awarded “after the fact” with no consideration given to the aforementioned criteria as no prior- year basis exists. • GDOL experienced delays in some pandemic allocations due to delays in programing and the submission of the new reports for pandemic activities (FRUC, PEUC and PUA). All late reports have ben submitted and we are reconciling grants as deemed appropriate. • With reimbursement based on pandemic claims activity, there was no clear mechanism for GDOL to be able to “forecast” the amount of time and effort needed to process the cyclical and unpredictable number of pandemic claims. As such, best efforts were made to estimate in this regard. • The 3073 FPUC grant is the only grant for which we have been reimbursed at 100%. However, due to the most recent implementation of stop/gain loss, we are no longer being reimbursed at the full amount. Regarding the Employment Service/ Wagner-Peyser Funded Grants noted, the program period of performance was July 1, 2022 thru September 30, 2025. GDOL received instructions from USDOL on January 19, 2023 requesting a final ETA-9130 report be submitted by February 15th for grants that were being transferred to TCSG and offered technical assistance in completing the reports. The National office was designated to de-obligate the funds remaining and issue new grant numbers to obligate these funds at TCSG; however, several things occurred that caused the process to be delayed: • The required action was to check box 6 as yes (for the final 9130 reports) and 10g (Federal Share of Unliquidated Obligation) had to be zero although there were Unliquidated Obligations in the system. • Although the Wagner Peyer program was transferred to TCSG in January 2023, eligible costs continued. • The need for expenditure reconciliations was discussed with USDOL Regional Office and anticipated funds were drawn in lieu of billing TCSG. • Associated eligible costs were reconciled to the Wagner Peyser Ledger via manual journal entries in lieu of billing TCSG. • In addition, USDOL implemented a new GrantSolutions to replace its legacy grant processing system, E-Grants. USDOL replaced its legacy E-Grants Grantee Reporting System (GRS) by transitioning to PMS for grant recipients submission of the quarterly ETA-9130 financial reports on February 6,2023. • Although training was taken for this process, the overall reconciliation process was delated all reconciling items were resolved by the 9/30/23 reporting period.
2023-026 Improve Controls over Financial Reporting Compliance Requirement: Reporting Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Labor Pass-Through Entity: None AL Numbers and Titles: 17.207 – Employment Service/Wagner-Peyser Funded Activities 17.225 – Unemployment Insurance 17.225 – COVID-19 – Unemployment Insurance Federal Award Numbers: UI347102055A13 (Year:2020), UI370592155A13 (Year:2021), UI322182255A13 (Year:2022), ES353382055A13 (Year:2020), ES367492155A13 (Year:2021) Questioned Costs: None Identified Repeat of Prior Year Finding: 2021-037 Description: The Georgia Department of Labor submitted inaccurate financial reports for the Unemployment Insurance and Employment Service/Wagner-Peyser Funded Activities Programs to the U.S. Department of Labor. Background Information: The Unemployment Insurance (UI) program, created by the Social Security Act (Pub. L. No. 74-271), provides Unemployment Compensation (UC) benefits to workers who are unemployed through no fault of their own and are seeking reemployment. To receive benefits, claimants must be able to work, available for work, and actively seeking work. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional UI provisions. Title II, Subtitle A of the CARES Act, authorizes the following temporary UI programs: • Federal Pandemic Unemployment Compensation (FPUC) – The FPUC program provides eligible individuals with $600 per week in addition to the weekly benefit amount they receive from certain other UC programs. • Pandemic Emergency Unemployment Compensation (PEUC) – The PEUC program provides up to 13 weeks of benefits to individuals who have exhausted all rights to regular compensation under State law or Federal law with respect to a benefit year that ended on or after July 1, 2019, have no rights to regular compensation with respect to a week under any other State or Federal UC law, are not receiving compensation with respect to such week under the UC law of Canada, and are able to work, available to work, and actively seeking work. • Pandemic Unemployment Assistance (PUA) – The PUA program provides up to 39 weeks of benefits to those individuals who are not eligible for regular UC or extended benefits under State or Federal law or PEUC, including those who have exhausted all rights to such benefits. In addition, the State Extended Benefits (SEB) program, which is an extension of UC benefits, becomes available for payment when the State’s 13-week insured unemployment rate (IUR) exceeds 5% and pays claimants up to an additional 13 weeks of compensation. Under the SEB program, the State is required to provide 50% of the amounts paid to the majority of eligible SEB claimants, which are those not covered by Federal law or special provisions of State law. However, under the CARES Act, the U.S. Department of Labor will reimburse the State at 100% of eligible costs for the SEB program. The State of Georgia became eligible to pay SEB May 10, 2020. However, the first payable weekending date (WED) was on July 4, 2020, as the first payable WED of PEUC was April 4, 2020. Further, the last payable WED for SEB was February 6, 2021. Additionally, The Georgia Department of Labor (DOL) is responsible for the administration and monitoring of Georgia's Employment Services Cluster programs, including carrying out the Employment Services/Wagner-Peyser (ES) funded activities. The main purpose of the ES program is to improve the functioning of the nation’s labor markets by bringing together individuals seeking employment and employers seeking workers. The DOL is responsible for reporting expenditures related to these programs to the U.S. Department of Labor’s Employment and Training Administration (ETA). Every grant awarded by the ETA requires accurate quarterly and annual reporting as a part of sound financial and management responsibilities. This reporting supports the ETA’s ability to measure fund utilization for performance accountability and assess compliance with statutory expenditure requirements. This information also helps measure successful outcomes for participants, ensure sound service delivery and reporting practices, and determine whether the federal funds achieved maximum benefit. The ETA-9130, Financial Status Report is used to report program and administrative expenditures. The DOL is required to submit quarterly financial reports for each UI and ESC program that they operate within 45 days after the end of reporting quarter. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. Criteria: As a recipient of federal awards, the DOL is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.302(a) state, in part, that “the non-Federal entity’s financial management systems must… be sufficient to permit the preparation of reports required by general and program-specific terms and conditions.” In addition, provisions included in the Uniform Guidance, Section 200.302(b)(2) state, in part, that the non-Federal entity’s financial management systems must provide for “accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements.” Condition: Unemployment Insurance - The ETA-9130 reports for the quarters ending September 2022 and June 2023 were reviewed to ensure that program and administrative expenditures were reported in a timely and accurate manner. For six of the 40 reports tested, the amounts reported did not agree with the amounts reflected in the accounting records. Four reports have more expenditures on their general ledger than obligated funds, one report was incorrectly entered in the reporting system, and one report could not be traced to the accounting records. Employment Service/Wagner-Peyser Funded Activities - The ETA-9130 reports for the quarters ending September 2022 and December 2022 were reviewed. For two of the 11 reports tested, the amounts reported did not agree with the amounts reflected in the accounting records. In both instances, the DOL reported more expenditures than what was reflected in their accounting records. Variances identified on each report are as follows: Cause: Unemployment Insurance - Separate ETA-9130 reports must be completed for each program and each fund source (subaccount) awarded to the DOL. While the DOL utilizes one general ledger report to prepare some ETA-9130 reports, the DOL uses multiple general ledger reports to prepare other ETA-9130 reports. In the instances of over obligated grant awards, the reporting system does not allow the preparer to enter more expenditures than funds authorized. Employment Service/Wagner-Peyser Funded Activities – The program moved to the Technical College System of Georgia (TCSG) in January 2023, and the final ETA-9130 reports for the grants transferring to the TCSG were to be submitted by February 14, 2023. The reports submitted to the ETA by the DOL included expenditures that were not incurred until after the program and program staff had moved to the TCSG, who assumed operation of grant activities. According to a communication between the DOL and U.S. Department of Labor, the expenditure amount to be reported on the final ETA-9130 report for quarter ending December 31, 2022, was to agree to draw down amount in the Payment Management System (PMS). However, the DOL drew down funds for expenditures that had yet to be incurred and reported that amount on the final ETA-9130 report. Effect: The submitting of inaccurate ETA-9130 reports resulted in noncompliance with federal regulations and the Uniform Guidance for both programs as noted above. Additionally, submitting incorrect reports diminishes the U.S. Department of Labor’s ability to effectively monitor the UI program. Recommendation: We recommend that the DOL review existing policies and procedures to ensure that it has established and is maintaining internal controls related to compliance with federal laws, regulations, and program compliance reports. This review should specifically address requirements for preparing the ETA-9130 reports. The DOL should ensure that personnel responsible for the ETA-9130 reports are appropriately trained and are familiar with these compliance requirements. In addition, we recommend that the DOL create queries and general ledger reports that only report the expenditures charged to each individual program as reflected on the grant award. Furthermore, spreadsheets and tools should be developed to balance report totals and identify errors before entering amounts into the federal reporting website. Views of Responsible Officials: GDOL concurs with this finding: Regarding the pandemic Grants noted that were all under #UI34710-20-55-A-13: • The UI Regular Grant typically provides the amount of available grant funds in advance based on 1.) and estimated number of claims to be processed int eh current year (based on the average of two years prior activity) and 2.) the average processing times (based pm the average of two years prior processing times). • In contrast, many of the pandemic grants are based on actual claims activity with monies being awarded “after the fact” with no consideration given to the aforementioned criteria as no prior- year basis exists. • GDOL experienced delays in some pandemic allocations due to delays in programing and the submission of the new reports for pandemic activities (FRUC, PEUC and PUA). All late reports have ben submitted and we are reconciling grants as deemed appropriate. • With reimbursement based on pandemic claims activity, there was no clear mechanism for GDOL to be able to “forecast” the amount of time and effort needed to process the cyclical and unpredictable number of pandemic claims. As such, best efforts were made to estimate in this regard. • The 3073 FPUC grant is the only grant for which we have been reimbursed at 100%. However, due to the most recent implementation of stop/gain loss, we are no longer being reimbursed at the full amount. Regarding the Employment Service/ Wagner-Peyser Funded Grants noted, the program period of performance was July 1, 2022 thru September 30, 2025. GDOL received instructions from USDOL on January 19, 2023 requesting a final ETA-9130 report be submitted by February 15th for grants that were being transferred to TCSG and offered technical assistance in completing the reports. The National office was designated to de-obligate the funds remaining and issue new grant numbers to obligate these funds at TCSG; however, several things occurred that caused the process to be delayed: • The required action was to check box 6 as yes (for the final 9130 reports) and 10g (Federal Share of Unliquidated Obligation) had to be zero although there were Unliquidated Obligations in the system. • Although the Wagner Peyer program was transferred to TCSG in January 2023, eligible costs continued. • The need for expenditure reconciliations was discussed with USDOL Regional Office and anticipated funds were drawn in lieu of billing TCSG. • Associated eligible costs were reconciled to the Wagner Peyser Ledger via manual journal entries in lieu of billing TCSG. • In addition, USDOL implemented a new GrantSolutions to replace its legacy grant processing system, E-Grants. USDOL replaced its legacy E-Grants Grantee Reporting System (GRS) by transitioning to PMS for grant recipients submission of the quarterly ETA-9130 financial reports on February 6,2023. • Although training was taken for this process, the overall reconciliation process was delated all reconciling items were resolved by the 9/30/23 reporting period.
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, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 20 METROPOLITAN SCHOOL DISTRICT OF SOUTHWEST ALLEN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation was required to submit annual data reports 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. During the audit period, the School Corporation submitted two ESSER I reports and two ESSER II reports, for a total of four reports. The annual data reports were compiled, prepared, and submitted by the Deputy Treasurer and the Director of Business/Treasurer without an oversight or review process in place to prevent, or detect and correct, errors. In addition, the four annual data reports were not supported by the School Corporation's records. The documentation used to prepare the reports was not retained by the School Corporation and the ledger activity for the time period of each report did not agree to the data submitted. As such, we could not verify the information submitted to the IDOE was accurate or complete. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(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." INDIANA STATE BOARD OF ACCOUNTS 21 METROPOLITAN SCHOOL DISTRICT OF SOUTHWEST ALLEN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls, which include segregation of key functions, 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 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 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 that documentation utilized in the preparation of the reports is maintained. 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, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 20 METROPOLITAN SCHOOL DISTRICT OF SOUTHWEST ALLEN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation was required to submit annual data reports 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. During the audit period, the School Corporation submitted two ESSER I reports and two ESSER II reports, for a total of four reports. The annual data reports were compiled, prepared, and submitted by the Deputy Treasurer and the Director of Business/Treasurer without an oversight or review process in place to prevent, or detect and correct, errors. In addition, the four annual data reports were not supported by the School Corporation's records. The documentation used to prepare the reports was not retained by the School Corporation and the ledger activity for the time period of each report did not agree to the data submitted. As such, we could not verify the information submitted to the IDOE was accurate or complete. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(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." INDIANA STATE BOARD OF ACCOUNTS 21 METROPOLITAN SCHOOL DISTRICT OF SOUTHWEST ALLEN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls, which include segregation of key functions, 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 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 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 that documentation utilized in the preparation of the reports is maintained. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-009 Subject: COVID-19 - Education Stabilization Fund - Cash Management 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: Cash Management Audit Findings: Material Weakness, Modified Opinion 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 related to the Cash Management compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 30 SILVER CREEK SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Reimbursement requests for the program were prepared by one employee and reviewed by another employee; however, no supporting documentation was provided to the reviewer. As documentation did not accompany the reimbursement request, and the reimbursement requests, as noted below, did not agree to the ledger, the reviewer could not have ensured expenses were paid prior to requesting reimbursement. Five reimbursement requests were submitted during the audit period. All five reimbursement requests were selected for testing. Of the five reimbursement requests tested, three were not traceable to the School Corporation's fund ledger. For those three reimbursement requests, the expenditures in the ledger exceeded the amount requested by $67,907, in total. However, as the expenditures could not be determined for each reimbursement requested, it could not be determined if the School Corporation paid for the expense prior to requesting reimbursement. The lack of internal controls and noncompliance were systemic issues throughout the audit period for ESSER I and ESSER II grant funds. 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 200.305(b) states in part: "For non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. . . . (3) Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per § 200.208, or when the non-Federal entity requests payment by reimbursement. . . ." 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. . . ." INDIANA STATE BOARD OF ACCOUNTS 31 SILVER CREEK SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, it could not be determined if all expenditures were paid by the School Corporation prior to requesting reimbursement. 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 design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place prior to filing the reimbursement requests. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-009 Subject: COVID-19 - Education Stabilization Fund - Cash Management 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: Cash Management Audit Findings: Material Weakness, Modified Opinion 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 related to the Cash Management compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 30 SILVER CREEK SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Reimbursement requests for the program were prepared by one employee and reviewed by another employee; however, no supporting documentation was provided to the reviewer. As documentation did not accompany the reimbursement request, and the reimbursement requests, as noted below, did not agree to the ledger, the reviewer could not have ensured expenses were paid prior to requesting reimbursement. Five reimbursement requests were submitted during the audit period. All five reimbursement requests were selected for testing. Of the five reimbursement requests tested, three were not traceable to the School Corporation's fund ledger. For those three reimbursement requests, the expenditures in the ledger exceeded the amount requested by $67,907, in total. However, as the expenditures could not be determined for each reimbursement requested, it could not be determined if the School Corporation paid for the expense prior to requesting reimbursement. The lack of internal controls and noncompliance were systemic issues throughout the audit period for ESSER I and ESSER II grant funds. 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 200.305(b) states in part: "For non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. . . . (3) Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per § 200.208, or when the non-Federal entity requests payment by reimbursement. . . ." 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. . . ." INDIANA STATE BOARD OF ACCOUNTS 31 SILVER CREEK SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, it could not be determined if all expenditures were paid by the School Corporation prior to requesting reimbursement. 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 design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place prior to filing the reimbursement requests. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-010 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, Modified Opinion 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 (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. INDIANA STATE BOARD OF ACCOUNTS 32 SILVER CREEK SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 compiled, prepared, and submitted by one person without oversight or review process in place to prevent, or detect and correct, errors. Additionally, all six reports were selected for testing. Of the six reports, five had errors as noted below: 1. The ESSER I, Year 2 report overstated expenditures for the reporting period, October 1, 2020 to June 30, 2021, by $163,492. In addition, the key line item "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Property" chosen for review was incorrectly reported. 2. The ESSER I, Year 3 report did not report any expenditures for the reporting period, July 1, 2021 to June 30, 2022; however, the ledger detail had expenditures of $120,855. As such, the key line items "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports - Personnel Services - Salaries" and "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports - Personnel Services - Benefits" chosen for review could not be verified. 3. The ESSER II, Year 1 report overstated expenditures for the reporting period, July 1, 2020 to June 30, 2021, by $227,740. In addition, the key line items "Addressing Physical Health and Safety - Personnel Services - Salaries" and "Operational Continuity and Other Allowed Uses - Purchased Professional and Technical Services" chosen for review were incorrectly reported. 4. The ESSER III, Year 1 report overstated expenditures for the reporting period, July 1, 2020 to June 30, 2021, by $30,643, as the report indicated expenditures of $30,643 but the ledger did not have any expenditures from ESSER III during that time period. In addition, the key line items "Addressing Physical Health and Safety (exclusive of amount expended toward required set-aside to address learning loss) - Personnel services - Salaries" and "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) (exclusive of amount expended toward required set-aside to address learning loss) - Personnel Services - Benefits" chosen for review were incorrectly reported. 5. The ESSER III, Year 2 report understated expenditures for the reporting period, July 1, 2021 to June 30, 2022, by $61,705. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 33 SILVER CREEK SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 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, which would include segregation of key functions. 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 design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, reports submitted to the IDOE 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 There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 34 SILVER CREEK SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place prior to filing required reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-010 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, Modified Opinion 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 (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. INDIANA STATE BOARD OF ACCOUNTS 32 SILVER CREEK SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 compiled, prepared, and submitted by one person without oversight or review process in place to prevent, or detect and correct, errors. Additionally, all six reports were selected for testing. Of the six reports, five had errors as noted below: 1. The ESSER I, Year 2 report overstated expenditures for the reporting period, October 1, 2020 to June 30, 2021, by $163,492. In addition, the key line item "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Property" chosen for review was incorrectly reported. 2. The ESSER I, Year 3 report did not report any expenditures for the reporting period, July 1, 2021 to June 30, 2022; however, the ledger detail had expenditures of $120,855. As such, the key line items "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports - Personnel Services - Salaries" and "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports - Personnel Services - Benefits" chosen for review could not be verified. 3. The ESSER II, Year 1 report overstated expenditures for the reporting period, July 1, 2020 to June 30, 2021, by $227,740. In addition, the key line items "Addressing Physical Health and Safety - Personnel Services - Salaries" and "Operational Continuity and Other Allowed Uses - Purchased Professional and Technical Services" chosen for review were incorrectly reported. 4. The ESSER III, Year 1 report overstated expenditures for the reporting period, July 1, 2020 to June 30, 2021, by $30,643, as the report indicated expenditures of $30,643 but the ledger did not have any expenditures from ESSER III during that time period. In addition, the key line items "Addressing Physical Health and Safety (exclusive of amount expended toward required set-aside to address learning loss) - Personnel services - Salaries" and "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) (exclusive of amount expended toward required set-aside to address learning loss) - Personnel Services - Benefits" chosen for review were incorrectly reported. 5. The ESSER III, Year 2 report understated expenditures for the reporting period, July 1, 2021 to June 30, 2022, by $61,705. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 33 SILVER CREEK SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 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, which would include segregation of key functions. 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 design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, reports submitted to the IDOE 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 There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 34 SILVER CREEK SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place prior to filing required reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-001 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): S425D210013, S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 15 SOUTH SPENCER COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, expenditures per activity, and full-time equivalency positions. During the audit period the School Corporation submitted two ESSER I reports and two ESSER II reports for a total of four reports. A single employee prepared and submitted each annual data report without a review or oversight process in place to prevent, or detect and correct, errors. All four reports were selected for testing. For two of the annual data reports, the reported amounts could not be traced to the records, nor could the accuracy and completeness of the reports be verified. The errors identified were as follows: The ESSER I, Year 2 report, which covered the period of October 1, 2020 to June 30, 2021, reported total expenses of $140,700. However, the School Corporation's ledger for the same period had total expenses of $83,866. The ESSER II, Year 2 report, which covered the period of July 1, 2021 to June 30, 2022, reported total expenses of $157,701. However, the School Corporation's ledger for the same period had total expenses of $218,117. The School Corporation failed to file the ESSER III, Year 2 report for the period of July 1, 2021 to June 30, 2022. The School Corporation's ledger for this period had total expenses of $565,028. In addition, the key line items of "Number of FTE positions;" "Number of Specific Positions Supported with ESSER Funds;" and "Allocation of ESSER funds to Schools and Criteria Used" could not be verified on any of the four reports as the School Corporation could not provide supporting documentation for non-financial data. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 SOUTH SPENCER COUNTY 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. . . ." 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 or implemented by management of the School Corporation, which would include segregation of key functions. 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 design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the reports were not supported by the School Corporation's underlying accounting records and one report was not submitted. 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 Education Stabilization Fund program funds are supported by the School Corporation's underlying accounting records and that required reports are submitted. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-001 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): S425D210013, S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 15 SOUTH SPENCER COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, expenditures per activity, and full-time equivalency positions. During the audit period the School Corporation submitted two ESSER I reports and two ESSER II reports for a total of four reports. A single employee prepared and submitted each annual data report without a review or oversight process in place to prevent, or detect and correct, errors. All four reports were selected for testing. For two of the annual data reports, the reported amounts could not be traced to the records, nor could the accuracy and completeness of the reports be verified. The errors identified were as follows: The ESSER I, Year 2 report, which covered the period of October 1, 2020 to June 30, 2021, reported total expenses of $140,700. However, the School Corporation's ledger for the same period had total expenses of $83,866. The ESSER II, Year 2 report, which covered the period of July 1, 2021 to June 30, 2022, reported total expenses of $157,701. However, the School Corporation's ledger for the same period had total expenses of $218,117. The School Corporation failed to file the ESSER III, Year 2 report for the period of July 1, 2021 to June 30, 2022. The School Corporation's ledger for this period had total expenses of $565,028. In addition, the key line items of "Number of FTE positions;" "Number of Specific Positions Supported with ESSER Funds;" and "Allocation of ESSER funds to Schools and Criteria Used" could not be verified on any of the four reports as the School Corporation could not provide supporting documentation for non-financial data. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 SOUTH SPENCER COUNTY 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. . . ." 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 or implemented by management of the School Corporation, which would include segregation of key functions. 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 design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the reports were not supported by the School Corporation's underlying accounting records and one report was not submitted. 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 Education Stabilization Fund program funds are supported by the School Corporation's underlying accounting records and that required reports are submitted. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-001 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): S425D210013, S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 15 SOUTH SPENCER COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, expenditures per activity, and full-time equivalency positions. During the audit period the School Corporation submitted two ESSER I reports and two ESSER II reports for a total of four reports. A single employee prepared and submitted each annual data report without a review or oversight process in place to prevent, or detect and correct, errors. All four reports were selected for testing. For two of the annual data reports, the reported amounts could not be traced to the records, nor could the accuracy and completeness of the reports be verified. The errors identified were as follows: The ESSER I, Year 2 report, which covered the period of October 1, 2020 to June 30, 2021, reported total expenses of $140,700. However, the School Corporation's ledger for the same period had total expenses of $83,866. The ESSER II, Year 2 report, which covered the period of July 1, 2021 to June 30, 2022, reported total expenses of $157,701. However, the School Corporation's ledger for the same period had total expenses of $218,117. The School Corporation failed to file the ESSER III, Year 2 report for the period of July 1, 2021 to June 30, 2022. The School Corporation's ledger for this period had total expenses of $565,028. In addition, the key line items of "Number of FTE positions;" "Number of Specific Positions Supported with ESSER Funds;" and "Allocation of ESSER funds to Schools and Criteria Used" could not be verified on any of the four reports as the School Corporation could not provide supporting documentation for non-financial data. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 SOUTH SPENCER COUNTY 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. . . ." 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 or implemented by management of the School Corporation, which would include segregation of key functions. 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 design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the reports were not supported by the School Corporation's underlying accounting records and one report was not submitted. 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 Education Stabilization Fund program funds are supported by the School Corporation's underlying accounting records and that required reports are submitted. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-001 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): S425D210013, S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 15 SOUTH SPENCER COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, expenditures per activity, and full-time equivalency positions. During the audit period the School Corporation submitted two ESSER I reports and two ESSER II reports for a total of four reports. A single employee prepared and submitted each annual data report without a review or oversight process in place to prevent, or detect and correct, errors. All four reports were selected for testing. For two of the annual data reports, the reported amounts could not be traced to the records, nor could the accuracy and completeness of the reports be verified. The errors identified were as follows: The ESSER I, Year 2 report, which covered the period of October 1, 2020 to June 30, 2021, reported total expenses of $140,700. However, the School Corporation's ledger for the same period had total expenses of $83,866. The ESSER II, Year 2 report, which covered the period of July 1, 2021 to June 30, 2022, reported total expenses of $157,701. However, the School Corporation's ledger for the same period had total expenses of $218,117. The School Corporation failed to file the ESSER III, Year 2 report for the period of July 1, 2021 to June 30, 2022. The School Corporation's ledger for this period had total expenses of $565,028. In addition, the key line items of "Number of FTE positions;" "Number of Specific Positions Supported with ESSER Funds;" and "Allocation of ESSER funds to Schools and Criteria Used" could not be verified on any of the four reports as the School Corporation could not provide supporting documentation for non-financial data. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 SOUTH SPENCER COUNTY 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. . . ." 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 or implemented by management of the School Corporation, which would include segregation of key functions. 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 design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the reports were not supported by the School Corporation's underlying accounting records and one report was not submitted. 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 Education Stabilization Fund program funds are supported by the School Corporation's underlying accounting records and that required reports are submitted. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-001 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): S425D210013, S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 15 SOUTH SPENCER COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, expenditures per activity, and full-time equivalency positions. During the audit period the School Corporation submitted two ESSER I reports and two ESSER II reports for a total of four reports. A single employee prepared and submitted each annual data report without a review or oversight process in place to prevent, or detect and correct, errors. All four reports were selected for testing. For two of the annual data reports, the reported amounts could not be traced to the records, nor could the accuracy and completeness of the reports be verified. The errors identified were as follows: The ESSER I, Year 2 report, which covered the period of October 1, 2020 to June 30, 2021, reported total expenses of $140,700. However, the School Corporation's ledger for the same period had total expenses of $83,866. The ESSER II, Year 2 report, which covered the period of July 1, 2021 to June 30, 2022, reported total expenses of $157,701. However, the School Corporation's ledger for the same period had total expenses of $218,117. The School Corporation failed to file the ESSER III, Year 2 report for the period of July 1, 2021 to June 30, 2022. The School Corporation's ledger for this period had total expenses of $565,028. In addition, the key line items of "Number of FTE positions;" "Number of Specific Positions Supported with ESSER Funds;" and "Allocation of ESSER funds to Schools and Criteria Used" could not be verified on any of the four reports as the School Corporation could not provide supporting documentation for non-financial data. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 SOUTH SPENCER COUNTY 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. . . ." 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 or implemented by management of the School Corporation, which would include segregation of key functions. 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 design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the reports were not supported by the School Corporation's underlying accounting records and one report was not submitted. 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 Education Stabilization Fund program funds are supported by the School Corporation's underlying accounting records and that required reports are submitted. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-001 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): S425D210013, S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 15 SOUTH SPENCER COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, expenditures per activity, and full-time equivalency positions. During the audit period the School Corporation submitted two ESSER I reports and two ESSER II reports for a total of four reports. A single employee prepared and submitted each annual data report without a review or oversight process in place to prevent, or detect and correct, errors. All four reports were selected for testing. For two of the annual data reports, the reported amounts could not be traced to the records, nor could the accuracy and completeness of the reports be verified. The errors identified were as follows: The ESSER I, Year 2 report, which covered the period of October 1, 2020 to June 30, 2021, reported total expenses of $140,700. However, the School Corporation's ledger for the same period had total expenses of $83,866. The ESSER II, Year 2 report, which covered the period of July 1, 2021 to June 30, 2022, reported total expenses of $157,701. However, the School Corporation's ledger for the same period had total expenses of $218,117. The School Corporation failed to file the ESSER III, Year 2 report for the period of July 1, 2021 to June 30, 2022. The School Corporation's ledger for this period had total expenses of $565,028. In addition, the key line items of "Number of FTE positions;" "Number of Specific Positions Supported with ESSER Funds;" and "Allocation of ESSER funds to Schools and Criteria Used" could not be verified on any of the four reports as the School Corporation could not provide supporting documentation for non-financial data. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 SOUTH SPENCER COUNTY 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. . . ." 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 or implemented by management of the School Corporation, which would include segregation of key functions. 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 design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the reports were not supported by the School Corporation's underlying accounting records and one report was not submitted. 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 Education Stabilization Fund program funds are supported by the School Corporation's underlying accounting records and that required reports are submitted. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 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, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation was required to submit annual data reports 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. 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 reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Furthermore, the data reported on four of the six reports could not be traced back to underlying records; therefore, the accuracy and completeness of the reports could not be verified. The following errors were identified: ESSER I, Year 2 Report The key line item, "Operational Continuity and Other Allowed Uses - Personnel Services - Salaries," was overstated by $20,648. ESSER I, Year 3 Report The key line item, "Addressing Physical Health and Safety Uses - Personnel Services - Salaries," was understated by $14,685. The key line item, "Addressing Physical Health and Safety Uses - Supplies," was understated by $31,510. ESSER II, Year 2 Report The key line item, "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) Uses - Purchased Professional and Technical Services," was understated by $35,967. ESSER III, Year 2 Report The key line item, "Addressing Physical Health and Safety (exclusive of amount expended toward required set-aside to address learning loss)," was understated $2,200. INDIANA STATE BOARD OF ACCOUNTS 20 PAOLI COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(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 which includes a segregation of key functions. 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, reported amounts could not be traced back to the underlying records. INDIANA STATE BOARD OF ACCOUNTS 21 PAOLI 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.