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.
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.
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.
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.
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.
Finding Number: 2023-007 State/Educational Agency(s): Arkansas Department of Commerce – Arkansas Economic Development Commission Pass-Through Entity: Not Applicable ALN Number(s) and Program Title(s): 21.027 – COVID 19: Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Awarding Agency: U.S. Department of Treasury Federal Award Number(s): SLFRP3627 Federal Award Year(s): 2022 Compliance Requirement(s) Affected: Procurement and Suspension and Debarment Type of Finding: Noncompliance and Material Weakness Repeat Finding: A similar issue was reported in prior-year finding 2022-017. Criteria: In accordance with 2 CFR § 200.302(b)(7), a non-federal entity must establish written procedures to implement and determine the allowability of costs in accordance with Uniform Administrative Requirements, Cost Principles, and Audit Requirements, as well as the terms and conditions of the federal award. In addition, 2 CFR § 200.303(a) states that a non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the award in compliance with federal statutes, regulations, and the terms and conditions of the award. Finally, 2 CFR § 200.214 holds entities subject to 2 CFR Part 180, which restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition and Context: For the second consecutive year, the Agency failed to establish documented control procedures for this compliance requirement area. The Agency is responsible for ensuring that entities receiving awards are registered in the System for Award Management (SAM) database and have not been suspended or debarred. Registration must occur prior to the issuance of a contract or grant agreement. ALA staff reviewed 11 contracts and grant agreements to determine if the Agency complied with the requirement. ALA review revealed that one entity, with an agreement dated January 27, 2022, failed to register on SAM until February 18, 2022. Statistically Valid Sample: Not a statistically valid sample Questioned Costs: Unknown Cause: The Agency failed to establish documented control procedures and did not have adequately trained staff to ensure compliance. Effect: Failure to develop, document, and implement procedures for internal control over compliance increases risk for issuance of contracts and grant agreements to excluded or ineligible entities. Recommendation: ALA staff recommend the Agency promptly develop, document, and establish policies to ensure contracts and grant agreements are only issued to eligible entities. Views of Responsible Officials and Planned Corrective Action: ASBO has made the registration at Sam.gov part of the application process that will be handled through the subgrant portal being developed with our new grants monitoring contractor. This will now be an electronic field that will be entered by the subgrantee. The 3rd party administrator will be responsible for verifying the subgrant applicant Sam.gov registration is valid and active. Anticipated Completion Date: System anticipated go live Date: April 26, 2024 Contact Person: Glen E. Howie Director Department of Commerce, Arkansas State Broadband Office 1 Commerce Way, Suite. 601 Little Rock, AR 72202 (501) 682-1123 Glen.Howie@ArkansasEDC.gov
Finding Number: 2023-011 State/Educational Agency(s): Arkansas Department of Education Pass-Through Entity: Not Applicable AL Number(s) and Program Title(s): 84.425D – COVID 19: Elementary and Secondary School Emergency Relief (ESSER) Fund Federal Awarding Agency: U.S. Department of Education Federal Award Number(s): S425D210039 Federal Award Year(s): 2021 Compliance Requirement(s) Affected: Reporting Type of Finding: Material Noncompliance and Material Weakness Repeat Finding: Not applicable Criteria: In accordance with 2 CFR § 200.302, the auditee must provide an accurate, current, and complete disclosure of the financial results of each federal award or program in accordance with the reporting requirements. In addition, the U.S. Department of Education’s Office of Elementary and Secondary Education requires ESSER grantees to submit an Annual Performance Report (APR) with data on expenditures, planned expenditures, subrecipients, and uses of funds. Condition and Context: To aid in the completion of year three’s ESSER APR, Agency staff obtained data from the Arkansas Public School Computer Network (APSCN), the accounting system utilized by Local Educational Agencies (LEAs), to monitor program expenditures. The data was compiled by Agency staff and was included on the templates provided by the U.S. Department of Education (ED). To ensure compliance with line item 3.b1 – LEA Expenditures by ESSER Subgrant Fund and Expenditure Category of the APR, which is identified in the Compliance Supplement as a key line item, ALA performed a review of the data included on the templates that was uploaded to the Annual Reporting Data Collection Tool on the ED website. The template includes data for the 255 participating LEAs. ALA’s review of the data template revealed a clerical error that reported LEAs’ grand totals as non-LEA expenditures. The clerical error resulted in overstated expenditures in the following categories: • Meeting students’ academic, social, emotional, and other needs - $89,966,926 overstatement; • Mental health supports for students and staff - $1,428,542 overstatement; • Operational continuity and other allowed uses - $62,756,767 overstatement Statistically Valid Sample: Not a statistically valid sample Questioned Costs: Overstated amount - $154,152,235 Cause: The Agency failed to ensure LEA expenditures reflected in the APSCN report were adequately represented on the ESSER II annual report. Effect: Inaccurate data was submitted to the federal awarding agency. Recommendation: ALA staff recommend the Agency implement additional procedures and controls over the reporting process to ensure reports are thoroughly reviewed prior to submission. Views of Responsible Officials and Planned Corrective Action: Arkansas Department of Education recognizes this finding. ADE Finance completed the named report which contained a subtotal error that overstated the totals when provided to Legislative Auditors. However, logic verifications built into the Federal System disallowed the items mentioned to be submitted. Therefore, the data reflected in Federal reporting for Arkansas was not overstated nor actual expenses and associated drawdowns completed erroneously. This information was confirmed with the U.S. Department of Education (ED) on February 21, 2024. ADE Finance assures that revisions to the FY23 ESSER data template will be made and uploaded to the Federal Reporting System during the allowable period of July 29, 2024, and August 15, 2024. Anticipated Completion Date: Data was effectively corrected at the time of reporting within the Federal System. ADE Finance will revise its uploaded FY23 ESSER data template during the allowable period of July 29, 2024, through August 15, 2024. Contact Person: Amy Thomas Accounting Operations Manager Arkansas Department of Education Four Capitol Mall, Room 204 Little Rock, AR 72201 501-682-3636 Amy.Thomas@ade.arkansas.gov
Finding Number: 2023-012 State/Educational Agency(s): Arkansas Department of Education Pass-Through Entity: Not Applicable AL Number(s) and Program Title(s): 84.425D – COVID 19: Elementary and Secondary School Emergency Relief (ESSER) Fund; 84.425U – COVID 19: American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER) Federal Awarding Agency: U.S. Department of Education Federal Award Number(s): S425D2000039; S425D210039; S425U210039 Federal Award Year(s): 2020 and 2021 Compliance Requirement(s) Affected: Reporting Type of Finding: Material Noncompliance and Material Weakness Repeat Finding: Not applicable Criteria: In accordance with 2 CFR § 200.302, the auditee must provide an accurate, current, and complete disclosure of the financial results of each federal award or program in accordance with the reporting requirements. In addition, the U.S. Department of Education’s Office of Elementary and Secondary Education requires ESSER grantees to submit an Annual Performance Report (APR) with data on expenditures, planned expenditures, subrecipients, and uses of funds. Condition and Context: To accurately complete the ESSER APR, the Agency prepared a survey to be completed by each of the Local Educational Agencies (LEAs) to capture data to complete specific lines of the APR. The completed surveys were compiled and included on the templates provided by the U.S. Department of Education (ED). The surveys contained the number of staff supported by ESSER funding and the total expenditure amount by position categories. Each LEA utilizes the Arkansas Public School Computer Network (APSCN) to process and track its expenditures. Agency staff also have access to APSCN. To ensure compliance with line item 3.b10 – LEA Hiring and Retention of Specific Positions of the APR, which is identified in the Compliance Supplement as a key line item, ALA performed a review of the data included on the template that was uploaded to the Annual Reporting Data Collection Tool on the ED website. The template includes data for the 263 participating LEAs. A sample of 25 LEAs was selected to determine if the data included in the template was supported by data submitted by the LEA on the survey. ALA review revealed that the data uploaded on the template is supported by the surveys completed and submitted by each LEA. However, the survey data does not represent the salary expenditures reflected in APSCN. As a result, ALA performed a comparison between the total salary and benefit expenditures reflected in APSCN to the total salary and benefit expenditures reported on the APR. ALA review revealed that the total amount reported as expended for staff supported by ESSER funds is understated by $98,192,610. (It should be noted that 22 of the 263 LEAs reported accurate salary expenditures supported by APSCN.) Statistically Valid Sample: Not a statistically valid sample Questioned Costs: Understated amount - $98,192,610 Cause: The survey provided by the Agency to capture the data necessary to complete the key line item on the APR did not contain sufficient instructions to ensure each LEA completed the survey accurately. As a result, multiple LEAs submitted inaccurate information and the Agency failed to perform additional procedures to corroborate the survey data provided. Effect: Inaccurate data was submitted on the APR. Recommendation: ALA staff recommend the Agency strengthen controls over reporting to ensure that amounts reported are accurate, complete, and properly supported by the appropriate records and documentation to ensure compliance with federal laws and regulations. Views of Responsible Officials and Planned Corrective Action: Arkansas Department of Education recognizes this finding. The ADE Finance unit utilized data extracted from the statewide Local Educational Agencies (LEAs) system, APSCN, for the majority of parameters reported. However, APSCN does not have the ability to cross-reference financial expenses with Local Educational Agency’s (LEAs) personnel data, which led to the creation of the survey. LEAs were expected to report data during a subsequent school year post COVID-19 Pandemic. ADE gathered state total expenses for requested categories from the system compiled with the requested breakdowns by position type obtained in the manual survey. The two data sets did not align, thus seen in Questioned Costs which reflects the difference between the two datasets. LEA actual expenses, associated drawdowns, and disbursements were not affected by the amounts reported in the annual ESSER data. ADE Finance is currently working with APSCN personnel to explore options for assembling data without manual input from LEAs. When implemented, discrepancies in the state data reported to federal systems and LEAs data should not exist. ADE has the goal of utilizing this method for FY23 reporting in May 2024. Anticipated Completion Date: ADE Finance will revise its uploaded FY22 ESSER data template during the allowable period of July 29, 2024, through August 15, 2024. Contact Person: Amy Thomas Accounting Operations Manager Arkansas Department of Education Four Capitol Mall, Room 204 Little Rock, AR 72201 501-682-3636 Amy.Thomas@ade.arkansas.gov
Finding Number: 2023-013 State/Educational Agency(s): Arkansas Department of Education Pass-Through Entity: Not Applicable AL Number(s) and Program Title(s): 84.425D – COVID 19: Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425U – COVID 19: American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER) Federal Awarding Agency: U.S. Department of Education Federal Award Number(s): S425D2000039; S425D210039; S425U210039 Federal Award Year(s): 2020 and 2021 Compliance Requirement(s) Affected: Reporting Type of Finding: Material Noncompliance and Material Weakness Repeat Finding: Not applicable Criteria: In accordance with 2 CFR § 200.302, the auditee must provide an accurate, current, and complete disclosure of the financial results of each federal award or program in accordance with the reporting requirements. In addition, 2 CFR § 200.303(a) requires a non-federal entity to establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the award in compliance with federal statutes, regulations, and the terms and conditions of the grant award. Condition and Context: To ensure compliance with year three’s ESSER Annual Performance Report (APR), ALA performed a review of line item 5.a – Full-Time Equivalent (FTE) Positions, which is identified in the Compliance Supplement as a key line item, to determine if the information reported was accurate and properly supported with accounting records for Local Educational Agencies (LEAs) and non-LEAs. Agency staff utilized the template provided by the U.S. Department of Education (ED) to upload data to the Annual Reporting Data Collection Tool. The template includes data for the 256 participating LEAs and 41 non-LEAs. The Agency estimated the FTE position data for non-LEAs based on websites and other available information but did not maintain supporting documentation for the information reported to the federal awarding agency. As a result, ALA staff were unable to verify that the data was accurate and complete. Statistically Valid Sample: Not a statistically valid sample Questioned Costs: Unknown Cause: The Agency did not maintain appropriate supporting documentation. Effect: The accuracy of data submitted to the federal awarding agency is unknown. Recommendation: ALA staff recommend the Agency strengthen internal controls over the review of special reports to ensure reported data is appropriately supported in accordance with federal laws and regulations. Views of Responsible Officials and Planned Corrective Action: Arkansas Department of Education recognizes this finding. ADE Finance understands the importance of supporting documentation for non-LEAs and has implemented a plan for FY23 communications. Furthermore, ADE Finance conducted follow-up communication with the U.S. Department of Education (ED) on March 1, 2024. It was concluded that FTE position data for non-LEAs were optional for Years 1 and 2 Annual Performance Reports per the ESSER Form Review Webinar Guidance. ADE was further instructed to omit non-LEA information from the template should it be unreasonable to provide for the FY22 reporting year in question. ADE will ensure non-LEA entities provide the requested 5.a – Full-Time Equivalent (FTE) Compliance Supplement information for supporting documentation with FY23 and subsequent Reporting Periods. Anticipated Completion Date: May 2024. ADE Finance is coordinating communication with non-Local Educational Agencies (non-LEAs) in effort to revise the data for FY22, however will omit the related data per U.S. Department of Education (ED) guidance provided on March 1, 2024, should non-LEAs be unable to provide quality data. Contact Person: Amy Thomas Accounting Operations Manager Arkansas Department of Education Four Capitol Mall, Room 204 Little Rock, AR 72201 501-682-3636 Amy.Thomas@ade.arkansas.gov
Finding Number: 2023-012 State/Educational Agency(s): Arkansas Department of Education Pass-Through Entity: Not Applicable AL Number(s) and Program Title(s): 84.425D – COVID 19: Elementary and Secondary School Emergency Relief (ESSER) Fund; 84.425U – COVID 19: American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER) Federal Awarding Agency: U.S. Department of Education Federal Award Number(s): S425D2000039; S425D210039; S425U210039 Federal Award Year(s): 2020 and 2021 Compliance Requirement(s) Affected: Reporting Type of Finding: Material Noncompliance and Material Weakness Repeat Finding: Not applicable Criteria: In accordance with 2 CFR § 200.302, the auditee must provide an accurate, current, and complete disclosure of the financial results of each federal award or program in accordance with the reporting requirements. In addition, the U.S. Department of Education’s Office of Elementary and Secondary Education requires ESSER grantees to submit an Annual Performance Report (APR) with data on expenditures, planned expenditures, subrecipients, and uses of funds. Condition and Context: To accurately complete the ESSER APR, the Agency prepared a survey to be completed by each of the Local Educational Agencies (LEAs) to capture data to complete specific lines of the APR. The completed surveys were compiled and included on the templates provided by the U.S. Department of Education (ED). The surveys contained the number of staff supported by ESSER funding and the total expenditure amount by position categories. Each LEA utilizes the Arkansas Public School Computer Network (APSCN) to process and track its expenditures. Agency staff also have access to APSCN. To ensure compliance with line item 3.b10 – LEA Hiring and Retention of Specific Positions of the APR, which is identified in the Compliance Supplement as a key line item, ALA performed a review of the data included on the template that was uploaded to the Annual Reporting Data Collection Tool on the ED website. The template includes data for the 263 participating LEAs. A sample of 25 LEAs was selected to determine if the data included in the template was supported by data submitted by the LEA on the survey. ALA review revealed that the data uploaded on the template is supported by the surveys completed and submitted by each LEA. However, the survey data does not represent the salary expenditures reflected in APSCN. As a result, ALA performed a comparison between the total salary and benefit expenditures reflected in APSCN to the total salary and benefit expenditures reported on the APR. ALA review revealed that the total amount reported as expended for staff supported by ESSER funds is understated by $98,192,610. (It should be noted that 22 of the 263 LEAs reported accurate salary expenditures supported by APSCN.) Statistically Valid Sample: Not a statistically valid sample Questioned Costs: Understated amount - $98,192,610 Cause: The survey provided by the Agency to capture the data necessary to complete the key line item on the APR did not contain sufficient instructions to ensure each LEA completed the survey accurately. As a result, multiple LEAs submitted inaccurate information and the Agency failed to perform additional procedures to corroborate the survey data provided. Effect: Inaccurate data was submitted on the APR. Recommendation: ALA staff recommend the Agency strengthen controls over reporting to ensure that amounts reported are accurate, complete, and properly supported by the appropriate records and documentation to ensure compliance with federal laws and regulations. Views of Responsible Officials and Planned Corrective Action: Arkansas Department of Education recognizes this finding. The ADE Finance unit utilized data extracted from the statewide Local Educational Agencies (LEAs) system, APSCN, for the majority of parameters reported. However, APSCN does not have the ability to cross-reference financial expenses with Local Educational Agency’s (LEAs) personnel data, which led to the creation of the survey. LEAs were expected to report data during a subsequent school year post COVID-19 Pandemic. ADE gathered state total expenses for requested categories from the system compiled with the requested breakdowns by position type obtained in the manual survey. The two data sets did not align, thus seen in Questioned Costs which reflects the difference between the two datasets. LEA actual expenses, associated drawdowns, and disbursements were not affected by the amounts reported in the annual ESSER data. ADE Finance is currently working with APSCN personnel to explore options for assembling data without manual input from LEAs. When implemented, discrepancies in the state data reported to federal systems and LEAs data should not exist. ADE has the goal of utilizing this method for FY23 reporting in May 2024. Anticipated Completion Date: ADE Finance will revise its uploaded FY22 ESSER data template during the allowable period of July 29, 2024, through August 15, 2024. Contact Person: Amy Thomas Accounting Operations Manager Arkansas Department of Education Four Capitol Mall, Room 204 Little Rock, AR 72201 501-682-3636 Amy.Thomas@ade.arkansas.gov
Finding Number: 2023-013 State/Educational Agency(s): Arkansas Department of Education Pass-Through Entity: Not Applicable AL Number(s) and Program Title(s): 84.425D – COVID 19: Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425U – COVID 19: American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER) Federal Awarding Agency: U.S. Department of Education Federal Award Number(s): S425D2000039; S425D210039; S425U210039 Federal Award Year(s): 2020 and 2021 Compliance Requirement(s) Affected: Reporting Type of Finding: Material Noncompliance and Material Weakness Repeat Finding: Not applicable Criteria: In accordance with 2 CFR § 200.302, the auditee must provide an accurate, current, and complete disclosure of the financial results of each federal award or program in accordance with the reporting requirements. In addition, 2 CFR § 200.303(a) requires a non-federal entity to establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the award in compliance with federal statutes, regulations, and the terms and conditions of the grant award. Condition and Context: To ensure compliance with year three’s ESSER Annual Performance Report (APR), ALA performed a review of line item 5.a – Full-Time Equivalent (FTE) Positions, which is identified in the Compliance Supplement as a key line item, to determine if the information reported was accurate and properly supported with accounting records for Local Educational Agencies (LEAs) and non-LEAs. Agency staff utilized the template provided by the U.S. Department of Education (ED) to upload data to the Annual Reporting Data Collection Tool. The template includes data for the 256 participating LEAs and 41 non-LEAs. The Agency estimated the FTE position data for non-LEAs based on websites and other available information but did not maintain supporting documentation for the information reported to the federal awarding agency. As a result, ALA staff were unable to verify that the data was accurate and complete. Statistically Valid Sample: Not a statistically valid sample Questioned Costs: Unknown Cause: The Agency did not maintain appropriate supporting documentation. Effect: The accuracy of data submitted to the federal awarding agency is unknown. Recommendation: ALA staff recommend the Agency strengthen internal controls over the review of special reports to ensure reported data is appropriately supported in accordance with federal laws and regulations. Views of Responsible Officials and Planned Corrective Action: Arkansas Department of Education recognizes this finding. ADE Finance understands the importance of supporting documentation for non-LEAs and has implemented a plan for FY23 communications. Furthermore, ADE Finance conducted follow-up communication with the U.S. Department of Education (ED) on March 1, 2024. It was concluded that FTE position data for non-LEAs were optional for Years 1 and 2 Annual Performance Reports per the ESSER Form Review Webinar Guidance. ADE was further instructed to omit non-LEA information from the template should it be unreasonable to provide for the FY22 reporting year in question. ADE will ensure non-LEA entities provide the requested 5.a – Full-Time Equivalent (FTE) Compliance Supplement information for supporting documentation with FY23 and subsequent Reporting Periods. Anticipated Completion Date: May 2024. ADE Finance is coordinating communication with non-Local Educational Agencies (non-LEAs) in effort to revise the data for FY22, however will omit the related data per U.S. Department of Education (ED) guidance provided on March 1, 2024, should non-LEAs be unable to provide quality data. Contact Person: Amy Thomas Accounting Operations Manager Arkansas Department of Education Four Capitol Mall, Room 204 Little Rock, AR 72201 501-682-3636 Amy.Thomas@ade.arkansas.gov
Finding 2023-006 Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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 . . . . 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." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the reporting compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Management misinterpreted the instructions for the reporting requirements and believed that they did not need to fill in the expense information as an LEA. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit one Annual Data Report for each year in the audit period to the Indiana Department of Education (IDOE) to meet federal reporting requirements for ESSER grant awards. Amounts reported on each ESSER I Annual Data Report did not agree to underlying detail for the ESSER I grant. ESSER I was overstated on the Year 3 report by $76,231. The finding is isolated to the S425D200013 award (ESSER I). Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan
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 Number and Year (or Other Identifying Number): 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 an annual data report to the Indiana Department of Education (IDOE). 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 a total of four reports: two ESSER I reports, one ESSER II report, and one ESSER III report. The annual data reports were prepared and submitted to the IDOE by the Chief Financial Officer without an oversight or review process to prevent, or detect and correct, errors. Due to the lack of controls the following errors occurred. The ESSER II, Year 2 report, which covered the period of July 2021 to June 30, 2022, was not supported by the School Corporation's records. $1,555,604 in Expenditures for personnel services - salaries was reported as $1,555,604; however, this amount should have been split between Personnel Services - salaries of $1,062,376, and Personnel Services - Benefits of $493,228 according to the School Corporation's records provided. The lack of internal controls was a systemic issue throughout the audit period and noncompliance was isolated to the ESSER II, Year 2 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 200.302(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." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, reports were not accurately submitted to the IDOE. 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, including policies and procedures, that would provide segregation of duties to ensure reviews, approvals, and oversight are taking place to ensure reports are submitted accurately. 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 Number and Year (or Other Identifying Number): 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 an annual data report to the Indiana Department of Education (IDOE). 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 a total of four reports: two ESSER I reports, one ESSER II report, and one ESSER III report. The annual data reports were prepared and submitted to the IDOE by the Chief Financial Officer without an oversight or review process to prevent, or detect and correct, errors. Due to the lack of controls the following errors occurred. The ESSER II, Year 2 report, which covered the period of July 2021 to June 30, 2022, was not supported by the School Corporation's records. $1,555,604 in Expenditures for personnel services - salaries was reported as $1,555,604; however, this amount should have been split between Personnel Services - salaries of $1,062,376, and Personnel Services - Benefits of $493,228 according to the School Corporation's records provided. The lack of internal controls was a systemic issue throughout the audit period and noncompliance was isolated to the ESSER II, Year 2 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 200.302(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." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, reports were not accurately submitted to the IDOE. 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, including policies and procedures, that would provide segregation of duties to ensure reviews, approvals, and oversight are taking place to ensure reports are submitted accurately. 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 Information on the federal program: Subject: Education Stabilization Fund – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Federal Award Numbers: S425C200018, S425D200013, S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness Criteria: 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 . . . ." 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." Condition: The School Corporation did not have a review control in place to ensure the annual data report was reviewed by someone other than the preparer and that the report was submitted timely. Original documents and related support were not maintained by the School Corporation. Cause: There were not sufficient internal controls in place to ensure the Annual Data Report was submitted by the Indiana Department of Education’s deadline and that the Annual Data Report agreed to the underlying fund ledger detail. Effect: The Annual Data Reports may not be submitted on time and could be submitted with incorrect information. Questioned Costs: There were no questioned costs identified. Context: The School Corporation did not have a formal review process in place to review the Annual Data Reports that were required to be submitted during the audit period. Original copies of the reports and submission receipts were not maintained and therefore, we were unable to verify the reports were submitted by the required due dates. The Annual Data Report for the period of October 1, 2020 through June 30, 2021 was overstated by $30,211 and the report for the period of July 1, 2021 through June 30, 2022, was understated by $549,488. Identification as a repeat finding, if applicable: No. Recommendation: We recommend management review internal controls around the preparation, review, and submission of the Annual Data Reports to verify reports are submitted timely. We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted and that the School Corporation maintain records to validate the reports were submitted timely. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-005 Information on the federal program: Subject: Education Stabilization Fund – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Federal Award Numbers: S425C200018, S425D200013, S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness Criteria: 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 . . . ." 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." Condition: The School Corporation did not have a review control in place to ensure the annual data report was reviewed by someone other than the preparer and that the report was submitted timely. Original documents and related support were not maintained by the School Corporation. Cause: There were not sufficient internal controls in place to ensure the Annual Data Report was submitted by the Indiana Department of Education’s deadline and that the Annual Data Report agreed to the underlying fund ledger detail. Effect: The Annual Data Reports may not be submitted on time and could be submitted with incorrect information. Questioned Costs: There were no questioned costs identified. Context: The School Corporation did not have a formal review process in place to review the Annual Data Reports that were required to be submitted during the audit period. Original copies of the reports and submission receipts were not maintained and therefore, we were unable to verify the reports were submitted by the required due dates. The Annual Data Report for the period of October 1, 2020 through June 30, 2021 was overstated by $30,211 and the report for the period of July 1, 2021 through June 30, 2022, was understated by $549,488. Identification as a repeat finding, if applicable: No. Recommendation: We recommend management review internal controls around the preparation, review, and submission of the Annual Data Reports to verify reports are submitted timely. We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted and that the School Corporation maintain records to validate the reports were submitted timely. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-005 Information on the federal program: Subject: Education Stabilization Fund – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Federal Award Numbers: S425C200018, S425D200013, S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness Criteria: 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 . . . ." 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." Condition: The School Corporation did not have a review control in place to ensure the annual data report was reviewed by someone other than the preparer and that the report was submitted timely. Original documents and related support were not maintained by the School Corporation. Cause: There were not sufficient internal controls in place to ensure the Annual Data Report was submitted by the Indiana Department of Education’s deadline and that the Annual Data Report agreed to the underlying fund ledger detail. Effect: The Annual Data Reports may not be submitted on time and could be submitted with incorrect information. Questioned Costs: There were no questioned costs identified. Context: The School Corporation did not have a formal review process in place to review the Annual Data Reports that were required to be submitted during the audit period. Original copies of the reports and submission receipts were not maintained and therefore, we were unable to verify the reports were submitted by the required due dates. The Annual Data Report for the period of October 1, 2020 through June 30, 2021 was overstated by $30,211 and the report for the period of July 1, 2021 through June 30, 2022, was understated by $549,488. Identification as a repeat finding, if applicable: No. Recommendation: We recommend management review internal controls around the preparation, review, and submission of the Annual Data Reports to verify reports are submitted timely. We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted and that the School Corporation maintain records to validate the reports were submitted timely. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-005 Information on the federal program: Subject: Education Stabilization Fund – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Federal Award Numbers: S425C200018, S425D200013, S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness Criteria: 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 . . . ." 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." Condition: The School Corporation did not have a review control in place to ensure the annual data report was reviewed by someone other than the preparer and that the report was submitted timely. Original documents and related support were not maintained by the School Corporation. Cause: There were not sufficient internal controls in place to ensure the Annual Data Report was submitted by the Indiana Department of Education’s deadline and that the Annual Data Report agreed to the underlying fund ledger detail. Effect: The Annual Data Reports may not be submitted on time and could be submitted with incorrect information. Questioned Costs: There were no questioned costs identified. Context: The School Corporation did not have a formal review process in place to review the Annual Data Reports that were required to be submitted during the audit period. Original copies of the reports and submission receipts were not maintained and therefore, we were unable to verify the reports were submitted by the required due dates. The Annual Data Report for the period of October 1, 2020 through June 30, 2021 was overstated by $30,211 and the report for the period of July 1, 2021 through June 30, 2022, was understated by $549,488. Identification as a repeat finding, if applicable: No. Recommendation: We recommend management review internal controls around the preparation, review, and submission of the Annual Data Reports to verify reports are submitted timely. We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted and that the School Corporation maintain records to validate the reports were submitted timely. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-008 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, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were compiled, prepared, and submitted by one employee without an oversight or review process in place to prevent, or detect and correct, errors. In addition, the six reports submitted during the audit period contained errors. The errors were as follows: The ESSER I, Year 2 and ESSER II, Year 1 reports did not contain any expenditures for the reporting period; however, according to the School Corporation's records, there were expenditures of $43,786 for ESSER I and $39,648 for ESSER II during this period. The ESSER I, Year 3; ESSER II, Year 2; ESSER III, Year 1; and ESSER III, Year 2 reports were not supported by the School Corporation's records, were not accurate and complete, and were not mathematically accurate. Reported amounts were greater than the amount shown in the ledger by $35,940, $97,761, and $25,763, respectively. 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." 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, ESSER reports were not supported by the School Corporation's records, were not accurate and complete, and were not mathematically accurate. 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 all reports are submitted accurately. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-008 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, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were compiled, prepared, and submitted by one employee without an oversight or review process in place to prevent, or detect and correct, errors. In addition, the six reports submitted during the audit period contained errors. The errors were as follows: The ESSER I, Year 2 and ESSER II, Year 1 reports did not contain any expenditures for the reporting period; however, according to the School Corporation's records, there were expenditures of $43,786 for ESSER I and $39,648 for ESSER II during this period. The ESSER I, Year 3; ESSER II, Year 2; ESSER III, Year 1; and ESSER III, Year 2 reports were not supported by the School Corporation's records, were not accurate and complete, and were not mathematically accurate. Reported amounts were greater than the amount shown in the ledger by $35,940, $97,761, and $25,763, respectively. 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." 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, ESSER reports were not supported by the School Corporation's records, were not accurate and complete, and were not mathematically accurate. 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 all reports are submitted accurately. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-008 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, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were compiled, prepared, and submitted by one employee without an oversight or review process in place to prevent, or detect and correct, errors. In addition, the six reports submitted during the audit period contained errors. The errors were as follows: The ESSER I, Year 2 and ESSER II, Year 1 reports did not contain any expenditures for the reporting period; however, according to the School Corporation's records, there were expenditures of $43,786 for ESSER I and $39,648 for ESSER II during this period. The ESSER I, Year 3; ESSER II, Year 2; ESSER III, Year 1; and ESSER III, Year 2 reports were not supported by the School Corporation's records, were not accurate and complete, and were not mathematically accurate. Reported amounts were greater than the amount shown in the ledger by $35,940, $97,761, and $25,763, respectively. 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." 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, ESSER reports were not supported by the School Corporation's records, were not accurate and complete, and were not mathematically accurate. 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 all reports are submitted accurately. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-008 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, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were compiled, prepared, and submitted by one employee without an oversight or review process in place to prevent, or detect and correct, errors. In addition, the six reports submitted during the audit period contained errors. The errors were as follows: The ESSER I, Year 2 and ESSER II, Year 1 reports did not contain any expenditures for the reporting period; however, according to the School Corporation's records, there were expenditures of $43,786 for ESSER I and $39,648 for ESSER II during this period. The ESSER I, Year 3; ESSER II, Year 2; ESSER III, Year 1; and ESSER III, Year 2 reports were not supported by the School Corporation's records, were not accurate and complete, and were not mathematically accurate. Reported amounts were greater than the amount shown in the ledger by $35,940, $97,761, and $25,763, respectively. 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." 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, ESSER reports were not supported by the School Corporation's records, were not accurate and complete, and were not mathematically accurate. 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 all reports are submitted accurately. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-008 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, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were compiled, prepared, and submitted by one employee without an oversight or review process in place to prevent, or detect and correct, errors. In addition, the six reports submitted during the audit period contained errors. The errors were as follows: The ESSER I, Year 2 and ESSER II, Year 1 reports did not contain any expenditures for the reporting period; however, according to the School Corporation's records, there were expenditures of $43,786 for ESSER I and $39,648 for ESSER II during this period. The ESSER I, Year 3; ESSER II, Year 2; ESSER III, Year 1; and ESSER III, Year 2 reports were not supported by the School Corporation's records, were not accurate and complete, and were not mathematically accurate. Reported amounts were greater than the amount shown in the ledger by $35,940, $97,761, and $25,763, respectively. 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." 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, ESSER reports were not supported by the School Corporation's records, were not accurate and complete, and were not mathematically accurate. 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 all reports are submitted accurately. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-008 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, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were compiled, prepared, and submitted by one employee without an oversight or review process in place to prevent, or detect and correct, errors. In addition, the six reports submitted during the audit period contained errors. The errors were as follows: The ESSER I, Year 2 and ESSER II, Year 1 reports did not contain any expenditures for the reporting period; however, according to the School Corporation's records, there were expenditures of $43,786 for ESSER I and $39,648 for ESSER II during this period. The ESSER I, Year 3; ESSER II, Year 2; ESSER III, Year 1; and ESSER III, Year 2 reports were not supported by the School Corporation's records, were not accurate and complete, and were not mathematically accurate. Reported amounts were greater than the amount shown in the ledger by $35,940, $97,761, and $25,763, respectively. 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." 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, ESSER reports were not supported by the School Corporation's records, were not accurate and complete, and were not mathematically accurate. 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 all reports are submitted accurately. 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, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (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 annual data reports were compiled, prepared, and submitted by the Treasurer without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, the ESSER I, Year 2 and ESSER I, Year 3 reports were not supported by the School Corporation's records. Errors noted were as follows: The ESSER I, Year 2 report did not report any expenditures for the reporting period, October 1, 2020 to June 30, 2021; however, the ledger detail had expenditures of $77,594. The key line item "Operational Continuity and other Allowed Uses - Supplies" chosen for review was incorrectly reported. The ESSER I, Year 3 report included Year 1, March 13, 2020 to September 30, 2020, expenditures and Year 3, July 1, 2021 to June 30, 2022, expenditures. The key line item "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Personnel Services - Salaries" chosen for review was incorrectly reported. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 2 and ESSER I, Year 3 reports. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 18 SEYMOUR COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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. . . . (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. INDIANA STATE BOARD OF ACCOUNTS 19 SEYMOUR COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 required reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 20
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, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (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 annual data reports were compiled, prepared, and submitted by the Treasurer without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, the ESSER I, Year 2 and ESSER I, Year 3 reports were not supported by the School Corporation's records. Errors noted were as follows: The ESSER I, Year 2 report did not report any expenditures for the reporting period, October 1, 2020 to June 30, 2021; however, the ledger detail had expenditures of $77,594. The key line item "Operational Continuity and other Allowed Uses - Supplies" chosen for review was incorrectly reported. The ESSER I, Year 3 report included Year 1, March 13, 2020 to September 30, 2020, expenditures and Year 3, July 1, 2021 to June 30, 2022, expenditures. The key line item "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Personnel Services - Salaries" chosen for review was incorrectly reported. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 2 and ESSER I, Year 3 reports. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 18 SEYMOUR COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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. . . . (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. INDIANA STATE BOARD OF ACCOUNTS 19 SEYMOUR COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 required reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 20
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, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (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 annual data reports were compiled, prepared, and submitted by the Treasurer without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, the ESSER I, Year 2 and ESSER I, Year 3 reports were not supported by the School Corporation's records. Errors noted were as follows: The ESSER I, Year 2 report did not report any expenditures for the reporting period, October 1, 2020 to June 30, 2021; however, the ledger detail had expenditures of $77,594. The key line item "Operational Continuity and other Allowed Uses - Supplies" chosen for review was incorrectly reported. The ESSER I, Year 3 report included Year 1, March 13, 2020 to September 30, 2020, expenditures and Year 3, July 1, 2021 to June 30, 2022, expenditures. The key line item "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Personnel Services - Salaries" chosen for review was incorrectly reported. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 2 and ESSER I, Year 3 reports. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 18 SEYMOUR COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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. . . . (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. INDIANA STATE BOARD OF ACCOUNTS 19 SEYMOUR COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 required reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 20
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, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (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 annual data reports were compiled, prepared, and submitted by the Treasurer without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, the ESSER I, Year 2 and ESSER I, Year 3 reports were not supported by the School Corporation's records. Errors noted were as follows: The ESSER I, Year 2 report did not report any expenditures for the reporting period, October 1, 2020 to June 30, 2021; however, the ledger detail had expenditures of $77,594. The key line item "Operational Continuity and other Allowed Uses - Supplies" chosen for review was incorrectly reported. The ESSER I, Year 3 report included Year 1, March 13, 2020 to September 30, 2020, expenditures and Year 3, July 1, 2021 to June 30, 2022, expenditures. The key line item "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Personnel Services - Salaries" chosen for review was incorrectly reported. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 2 and ESSER I, Year 3 reports. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 18 SEYMOUR COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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. . . . (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. INDIANA STATE BOARD OF ACCOUNTS 19 SEYMOUR COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 required reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 20
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, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (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 annual data reports were compiled, prepared, and submitted by the Treasurer without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, the ESSER I, Year 2 and ESSER I, Year 3 reports were not supported by the School Corporation's records. Errors noted were as follows: The ESSER I, Year 2 report did not report any expenditures for the reporting period, October 1, 2020 to June 30, 2021; however, the ledger detail had expenditures of $77,594. The key line item "Operational Continuity and other Allowed Uses - Supplies" chosen for review was incorrectly reported. The ESSER I, Year 3 report included Year 1, March 13, 2020 to September 30, 2020, expenditures and Year 3, July 1, 2021 to June 30, 2022, expenditures. The key line item "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Personnel Services - Salaries" chosen for review was incorrectly reported. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 2 and ESSER I, Year 3 reports. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 18 SEYMOUR COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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. . . . (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. INDIANA STATE BOARD OF ACCOUNTS 19 SEYMOUR COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 required reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 20
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, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (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 annual data reports were compiled, prepared, and submitted by the Treasurer without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, the ESSER I, Year 2 and ESSER I, Year 3 reports were not supported by the School Corporation's records. Errors noted were as follows: The ESSER I, Year 2 report did not report any expenditures for the reporting period, October 1, 2020 to June 30, 2021; however, the ledger detail had expenditures of $77,594. The key line item "Operational Continuity and other Allowed Uses - Supplies" chosen for review was incorrectly reported. The ESSER I, Year 3 report included Year 1, March 13, 2020 to September 30, 2020, expenditures and Year 3, July 1, 2021 to June 30, 2022, expenditures. The key line item "Meeting Students' Academic, Social, Emotional, and Other Needs (Excluding Mental Health Supports) - Personnel Services - Salaries" chosen for review was incorrectly reported. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 2 and ESSER I, Year 3 reports. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 18 SEYMOUR COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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. . . . (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. INDIANA STATE BOARD OF ACCOUNTS 19 SEYMOUR COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 required reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 20
(2023-045) Title: Internal control over WIC cash balances needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services Administrative and Financial Services State Bureau: Maine Center for Disease Control & Prevention Health and Human Services Service Center Federal Agency: U.S. Department of Agriculture Assistance Listing Title: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (COVID-19) Assistance Listing Number: 10.557 Federal Award Identification Number: See E-93 to E-94 Compliance Area: Cash management Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.302 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and terms and conditions of the awards. Financial records must adequately identify the source and application of funds and provide accountability for all funds, property, and other assets related to the Federally-funded activities. Condition: The Office of the State Auditor (OSA) issued finding 2019-021 as a result of procedures performed for the fiscal year 2019 audit. This finding identified that “Program personnel did not take the existing cash balance into consideration when requesting Federal funds for the Food portion of the WIC grant.” This resulted in an excess cash balance for the Food grant. The finding was repeated as finding 2020-021 for the fiscal year 2020 audit, finding 2021-018 for the fiscal year 2021 audit, and finding 2022-040 for the fiscal year 2022 audit. In response to these findings, the Department performed a reconciliation of all prior grant awards to determine the cause of the excess cash balance. This reconciliation identified a $1,059,186 discrepancy between the State’s accounting system, WIC reporting, and Federal draws from the 2013 and 2018 WIC Food grants. Context: The Department calculated a $1,055,088 residual cash balance from the 2013 WIC Food grant and a $4,098 residual cash balance from the 2018 WIC Food grant. Cause: Lack of adequate recordkeeping and account reconciliation in prior years Effect: The State may be required to return $1,059,186 to the Federal awarding agency. Recommendation: We recommend that the Department contact the Federal awarding agency to resolve this matter. Corrective Action Plan: See F-23 Management’s Response: The DHHS and DHHS Financial Service Center agree with this finding. The Department will work with the Federal Agency on steps needed to resolve the cash discrepancy. Contact: Sarah Gove, Director, DHHS Service Center, DAFS, 207-458-6626 (State Number: 23-1113-01)
(2023-045) Title: Internal control over WIC cash balances needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services Administrative and Financial Services State Bureau: Maine Center for Disease Control & Prevention Health and Human Services Service Center Federal Agency: U.S. Department of Agriculture Assistance Listing Title: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (COVID-19) Assistance Listing Number: 10.557 Federal Award Identification Number: See E-93 to E-94 Compliance Area: Cash management Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.302 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and terms and conditions of the awards. Financial records must adequately identify the source and application of funds and provide accountability for all funds, property, and other assets related to the Federally-funded activities. Condition: The Office of the State Auditor (OSA) issued finding 2019-021 as a result of procedures performed for the fiscal year 2019 audit. This finding identified that “Program personnel did not take the existing cash balance into consideration when requesting Federal funds for the Food portion of the WIC grant.” This resulted in an excess cash balance for the Food grant. The finding was repeated as finding 2020-021 for the fiscal year 2020 audit, finding 2021-018 for the fiscal year 2021 audit, and finding 2022-040 for the fiscal year 2022 audit. In response to these findings, the Department performed a reconciliation of all prior grant awards to determine the cause of the excess cash balance. This reconciliation identified a $1,059,186 discrepancy between the State’s accounting system, WIC reporting, and Federal draws from the 2013 and 2018 WIC Food grants. Context: The Department calculated a $1,055,088 residual cash balance from the 2013 WIC Food grant and a $4,098 residual cash balance from the 2018 WIC Food grant. Cause: Lack of adequate recordkeeping and account reconciliation in prior years Effect: The State may be required to return $1,059,186 to the Federal awarding agency. Recommendation: We recommend that the Department contact the Federal awarding agency to resolve this matter. Corrective Action Plan: See F-23 Management’s Response: The DHHS and DHHS Financial Service Center agree with this finding. The Department will work with the Federal Agency on steps needed to resolve the cash discrepancy. Contact: Sarah Gove, Director, DHHS Service Center, DAFS, 207-458-6626 (State Number: 23-1113-01)
(2023-058) Title: Internal control over CSLFRF expenditures needs improvement Prior Year Findings: None State Department: Economic and Community Development State Bureau: Commissioner’s Office Federal Agency: U.S. Department of the Treasury Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds (COVID-19) Assistance Listing Number: 21.027 Federal Award Identification Number: See E-93 to E-94 Compliance Area: Activities allowed or unallowed Allowable costs/cost principles Type of Finding: Significant deficiency Questioned costs Known Questioned Costs: $591,845 Likely Questioned Costs: $591,845 Criteria: 2 CFR 200.303; 2 CFR 200.302; 2 CFR 200.403; Coronavirus State and Local Fiscal Recovery Fund 2022 Final Rule The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Costs must be adequately documented. The State’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to determine that such funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) recipients may use funds “to respond to the public health emergency with respect to COVID-19 or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality.” The CSLFRF 2022 Final Rule states (U.S.) Treasury is maintaining the interim final rule definition of “small business,” which used the Small Business Administration’s (SBA) definition of fewer than 500 employees, or per the standard for that industry, as defined by SBA. Condition: As part of the American Rescue Plan Act, the State was advanced $997 million in Federal CSLFRF to support its response to and recovery from the COVID-19 public health emergency. In response, Public Law 2022, Chapter 168, L.D. 2010 authorized funding to establish an energy rebate program for certain electricity customers. The law required the Department of Economic and Community Development (DECD) to make payments to utility companies for energy rebate credits to the accounts of eligible customers. To support the allowability of energy rebates to small businesses, DECD prepared the “Energy Rate Relief for Small Organizations” business case. In the business case, DECD stated its intent to use CSLFRF funding to provide direct credits to qualifying Maine small businesses to help defray increased electricity costs. DECD noted the project would provide direct relief utilizing the framework established in LD 2010, Resolve, To Help Certain Businesses with Energy Costs. The Maine Jobs and Recovery Review Committee reviewed and approved the business case on behalf of the State under the assumption that energy rebates would be provided to small businesses. DECD relied on utility companies to identify customers eligible for the energy rebate based on energy usage. Utility companies provided detailed lists of the customers which they deemed eligible to receive the rebate, and DECD reviewed and approved the invoices for payment. The Office of the State Auditor (OSA) reviewed the invoices and related payments to utility companies and identified credits were issued to several commercial entities ineligible under the CSLFRF 2022 Final Rule definition of “small business.” The entities listed included large businesses, government entities, and school systems. In total, OSA identified 234 entities credited a total of $591,845 that were not approved as supported by the business case. Context: Energy Rate Relief payments totaled $7.1 million of the $207.8 million in CSLFRF expenditures during fiscal year 2023. Cause: Lack of supervisory oversight Effect: • Known questioned costs • Potential future questioned costs and disallowances • Noncompliance with Federal regulations Recommendation: We recommend that the Department review expenditures charged to CSLFRF, including the above-noted expenditures, to ensure that costs are allowable and align with the approved business case and Federal regulations. Corrective Action Plan: See F-26 Management’s Response: The Department agrees with this finding. Approved business cases are established under a single US Treasury expenditure category. Consistent with legislative direction, the scope of this business case was expanded during the original implementation to include additional allowable expenditure categories; however, the Department did not divide the original business case into multiple business cases to reflect the additional expenditure categories as required. The Department intends on dividing the approved business case into multiple business cases to align with the applicable US Treasury expenditure categories. Contact: Denise Garland, Deputy Commissioner, DECD, 207-624-7496 (State Number: 23-1699-01)
(2023-071) Title: Internal control over ICA program cash management needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Administrative and Financial Services State Bureau: Health and Human Services Service Center Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Immunization Cooperative Agreements (COVID-19) Assistance Listing Number: 93.268 Federal Award Identification Number: See E-93 to E-94 Compliance Area: Cash management Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.302; 31 CFR 205.33; State Administrative and Accounting Manual (SAAM) Section 50.40.80 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Financial records must adequately identify the source and application of funds and provide accountability for all funds, property, and other assets related to the Federally funded activities. The Department must minimize the time between the drawdown of Federal funds and the disbursement of these funds for Federal program purposes. The timing and amount of fund transfers must be as close as administratively feasible to the Department’s actual cash outlay for program costs. Section 50.40.80 of the SAAM has defined administratively feasible as no more than seven business days. Condition: The Department of Health and Human Services’ Service Center (DHHS SC) is responsible for the drawdown of funds for the Immunization Cooperative Agreements (ICA) program. The DHHS SC requests Federal funds to pay for ICA program expenditures utilizing a system report of expenditures. This report includes both expenditures that have been paid and expenditures that are pending payment. Expenditures that are pending payment can take additional time to process. In the Office of the State Auditor’s (OSA) testing of 40 Federal drawdowns, three drawdowns of Federal funds for the ICA program were beyond the administratively feasible requirement for disbursement, ranging from 10 to 12 days after the receipt of Federal funds. OSA selected a judgmental and a non-statistical random sample. In addition, DHHS SC personnel did not take the existing cash balance into consideration when requesting Federal funds for the ICA program for the first two months of fiscal year 2023, resulting in an excess cash balance. Context: In fiscal year 2023, there were 177 Federal grant drawdowns totaling approximately $10 million for the ICA program. The three drawdowns beyond the administratively feasible requirement for disbursement totaled $215,595. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: • Noncompliance with Federal regulations • The Federal government may impose more stringent program-specific cash management requirements based on noncompliance. Recommendation: We recommend that the DHHS SC develop and implement policies and procedures to ensure that Federal cash is requested based on immediate cash needs which includes consideration of existing cash balances. We also recommend that the DHHS SC review and revise current policies and include guidance for drawing Federal funds to exclude pending expenditures to ensure that Federal cash is requested based on immediate cash needs. Corrective Action Plan: See F-30 Management’s Response: The Department and its Financial Service Center agree with this finding. Policies and procedures will be reviewed for CMIA, draw procedures and reconciliations. The DHHS Financial Service Center will work to obtain and/or increase estimated revenue within the ICA appropriations. With an approval of estimated revenue, expenses will process first, and federal cash will be drawn after, reducing the risk of CMIA noncompliance as Federal cash will be instantly replenishing the account rather than waiting for invoices to process. Contact: Sarah Gove, Director, DHHS Service Center, DAFS, 207-458-6626 (State Number: 23-1118-01)
(2023-071) Title: Internal control over ICA program cash management needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Administrative and Financial Services State Bureau: Health and Human Services Service Center Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Immunization Cooperative Agreements (COVID-19) Assistance Listing Number: 93.268 Federal Award Identification Number: See E-93 to E-94 Compliance Area: Cash management Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.302; 31 CFR 205.33; State Administrative and Accounting Manual (SAAM) Section 50.40.80 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Financial records must adequately identify the source and application of funds and provide accountability for all funds, property, and other assets related to the Federally funded activities. The Department must minimize the time between the drawdown of Federal funds and the disbursement of these funds for Federal program purposes. The timing and amount of fund transfers must be as close as administratively feasible to the Department’s actual cash outlay for program costs. Section 50.40.80 of the SAAM has defined administratively feasible as no more than seven business days. Condition: The Department of Health and Human Services’ Service Center (DHHS SC) is responsible for the drawdown of funds for the Immunization Cooperative Agreements (ICA) program. The DHHS SC requests Federal funds to pay for ICA program expenditures utilizing a system report of expenditures. This report includes both expenditures that have been paid and expenditures that are pending payment. Expenditures that are pending payment can take additional time to process. In the Office of the State Auditor’s (OSA) testing of 40 Federal drawdowns, three drawdowns of Federal funds for the ICA program were beyond the administratively feasible requirement for disbursement, ranging from 10 to 12 days after the receipt of Federal funds. OSA selected a judgmental and a non-statistical random sample. In addition, DHHS SC personnel did not take the existing cash balance into consideration when requesting Federal funds for the ICA program for the first two months of fiscal year 2023, resulting in an excess cash balance. Context: In fiscal year 2023, there were 177 Federal grant drawdowns totaling approximately $10 million for the ICA program. The three drawdowns beyond the administratively feasible requirement for disbursement totaled $215,595. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: • Noncompliance with Federal regulations • The Federal government may impose more stringent program-specific cash management requirements based on noncompliance. Recommendation: We recommend that the DHHS SC develop and implement policies and procedures to ensure that Federal cash is requested based on immediate cash needs which includes consideration of existing cash balances. We also recommend that the DHHS SC review and revise current policies and include guidance for drawing Federal funds to exclude pending expenditures to ensure that Federal cash is requested based on immediate cash needs. Corrective Action Plan: See F-30 Management’s Response: The Department and its Financial Service Center agree with this finding. Policies and procedures will be reviewed for CMIA, draw procedures and reconciliations. The DHHS Financial Service Center will work to obtain and/or increase estimated revenue within the ICA appropriations. With an approval of estimated revenue, expenses will process first, and federal cash will be drawn after, reducing the risk of CMIA noncompliance as Federal cash will be instantly replenishing the account rather than waiting for invoices to process. Contact: Sarah Gove, Director, DHHS Service Center, DAFS, 207-458-6626 (State Number: 23-1118-01)
(2023-073) Title: Internal control over ELC program reporting needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Maine Center for Disease Control & Prevention Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (COVID-19) Assistance Listing Number: 93.323 Federal Award Identification Number: See E-93 to E-94 Compliance Area: Reporting Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.302; 2 CFR 200.329 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department must maintain accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with reporting requirements. The Department must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Condition: The purpose of the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program is to protect public health and safety by enhancing the capacity of public health agencies to effectively detect, respond to, prevent, and control known and emerging infectious diseases. The Maine Center for Disease Control & Prevention (MeCDC) administers the ELC program and is responsible for the preparation, accuracy, and submission of financial and performance reports to the Federal awarding agency. Financial Reports The Office of the State Auditor (OSA) reviewed seven of the 33 financial reports due in fiscal year 2023 and found that adequate documentation to support that four of the reports had been reviewed prior to submission could not be provided. OSA selected a non-statistical random sample. Performance Reports The Department was required to submit performance reports for three grants during fiscal year 2023. MeCDC provided the submitted reports; however, adequate supporting documentation could not be provided. Context: During fiscal year 2023, 33 financial reports and performance reports for three grants were required to be filed for the ELC program. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: Without documentation in support of ELC program reporting requirements, the timeliness and veracity of procedures to ensure compliance cannot be verified; therefore, incorrect or incomplete data may be reported to the Federal government Recommendation: We recommend that MeCDC enhance policies and procedures to ensure that documentation to support the accuracy and completeness of performance and financial reports is retained to demonstrate compliance with Federal reporting requirements. Corrective Action Plan: See F-31 Management’s Response: The Department agrees with this finding. With each quarterly financial reporting due on the 20th of each subsequent month (November, February, May, and August), the Maine CDC will submit quarterly financial reports for internal review by the 10th of the pertinent month. The internal reviewer will have until the 18th to review and submit corrections, for reporting to be inputted into CAMP. A confirmatory email for the process will be issued to record the examination of financial reporting. For performance reporting, quantitative data is pulled for each report, however data cleaning of the quantitative data is ongoing and a requirement from the Federal CDC. Data pulled for each report will only be accurate at the point in time when the data is pulled. Each year's data is not finalized until six plus months after the year ends. The Federal CDC does not require past reports to be reposted and updated as data cleaning occurs after the initial report is filed. For performance reporting of qualitative data, each team holds a quarterly meeting to review the milestones and provide updates. These meetings will now be recorded and will be available to audit upon request. For any qualitative milestone where progress is made on any given period, the Maine CDC will ensure there is a documented note associated with the percentage completeness selected to further document the recorded value. Contact: Sara Robinson, Infectious Disease Program Manager, DHHS, 207-287-4610 (State Number: 23-1156-02)
(2023-073) Title: Internal control over ELC program reporting needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Maine Center for Disease Control & Prevention Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) (COVID-19) Assistance Listing Number: 93.323 Federal Award Identification Number: See E-93 to E-94 Compliance Area: Reporting Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.302; 2 CFR 200.329 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department must maintain accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with reporting requirements. The Department must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Condition: The purpose of the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program is to protect public health and safety by enhancing the capacity of public health agencies to effectively detect, respond to, prevent, and control known and emerging infectious diseases. The Maine Center for Disease Control & Prevention (MeCDC) administers the ELC program and is responsible for the preparation, accuracy, and submission of financial and performance reports to the Federal awarding agency. Financial Reports The Office of the State Auditor (OSA) reviewed seven of the 33 financial reports due in fiscal year 2023 and found that adequate documentation to support that four of the reports had been reviewed prior to submission could not be provided. OSA selected a non-statistical random sample. Performance Reports The Department was required to submit performance reports for three grants during fiscal year 2023. MeCDC provided the submitted reports; however, adequate supporting documentation could not be provided. Context: During fiscal year 2023, 33 financial reports and performance reports for three grants were required to be filed for the ELC program. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: Without documentation in support of ELC program reporting requirements, the timeliness and veracity of procedures to ensure compliance cannot be verified; therefore, incorrect or incomplete data may be reported to the Federal government Recommendation: We recommend that MeCDC enhance policies and procedures to ensure that documentation to support the accuracy and completeness of performance and financial reports is retained to demonstrate compliance with Federal reporting requirements. Corrective Action Plan: See F-31 Management’s Response: The Department agrees with this finding. With each quarterly financial reporting due on the 20th of each subsequent month (November, February, May, and August), the Maine CDC will submit quarterly financial reports for internal review by the 10th of the pertinent month. The internal reviewer will have until the 18th to review and submit corrections, for reporting to be inputted into CAMP. A confirmatory email for the process will be issued to record the examination of financial reporting. For performance reporting, quantitative data is pulled for each report, however data cleaning of the quantitative data is ongoing and a requirement from the Federal CDC. Data pulled for each report will only be accurate at the point in time when the data is pulled. Each year's data is not finalized until six plus months after the year ends. The Federal CDC does not require past reports to be reposted and updated as data cleaning occurs after the initial report is filed. For performance reporting of qualitative data, each team holds a quarterly meeting to review the milestones and provide updates. These meetings will now be recorded and will be available to audit upon request. For any qualitative milestone where progress is made on any given period, the Maine CDC will ensure there is a documented note associated with the percentage completeness selected to further document the recorded value. Contact: Sara Robinson, Infectious Disease Program Manager, DHHS, 207-287-4610 (State Number: 23-1156-02)
FINDING 2023-006 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, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit final expenditure reports to the Indiana Department of Education (IDOE) on or before December 31, after the September 30 deadline, for encumbering prior school year funds. INDIANA STATE BOARD OF ACCOUNTS 23 CROTHERSVILLE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) During the audit period, the School Corporation submitted three final expenditure reports. The final expenditure reports were completed and submitted by the Treasurer without an oversight or review process in place to prevent, or detect and correct, errors. In addition, the final expenditure report for the Title I School Improvement for program year 2021, due December 30, 2021, was submitted March 7, 2024. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the final expenditure report for the Title I School Improvement grant. 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, 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. INDIANA STATE BOARD OF ACCOUNTS 24 CROTHERSVILLE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, Title I reports submitted to the IDOE were not submitted in a timely manner. 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 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 2023-006 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, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit final expenditure reports to the Indiana Department of Education (IDOE) on or before December 31, after the September 30 deadline, for encumbering prior school year funds. INDIANA STATE BOARD OF ACCOUNTS 23 CROTHERSVILLE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) During the audit period, the School Corporation submitted three final expenditure reports. The final expenditure reports were completed and submitted by the Treasurer without an oversight or review process in place to prevent, or detect and correct, errors. In addition, the final expenditure report for the Title I School Improvement for program year 2021, due December 30, 2021, was submitted March 7, 2024. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the final expenditure report for the Title I School Improvement grant. 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, 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. INDIANA STATE BOARD OF ACCOUNTS 24 CROTHERSVILLE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, Title I reports submitted to the IDOE were not submitted in a timely manner. 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 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 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, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance with the Reporting compliance requirement. 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 one ESSER III report, for a total of five 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 five reports were selected for testing, two of which were not supported by the School Corporation's records. The errors identified were as follows: 1. The ESSER I, Year 2 report, which covered the period of October 1, 2020 to June 30, 2021, reported total expenses of $24,256; however, the School Corporation's ledger for the same period had total expenses of $35,344. INDIANA STATE BOARD OF ACCOUNTS 32 CROTHERSVILLE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2. The ESSER II, Year 1 report, which covered the period of July 1, 2020 to June 30, 2021, reported total expenditures of $25,264; however, the School Corporation's ledger for the same period had total expenses of $244,923. In addition, 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) - Purchased Property Services" were reported incorrectly. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 2 and ESSER II, Year 1 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. . . ." Cause A proper system of internal controls was not designed and 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, 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. INDIANA STATE BOARD OF ACCOUNTS 33 CROTHERSVILLE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 supported by the School Corporation's underlying accounting records. 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 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, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance with the Reporting compliance requirement. 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 one ESSER III report, for a total of five 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 five reports were selected for testing, two of which were not supported by the School Corporation's records. The errors identified were as follows: 1. The ESSER I, Year 2 report, which covered the period of October 1, 2020 to June 30, 2021, reported total expenses of $24,256; however, the School Corporation's ledger for the same period had total expenses of $35,344. INDIANA STATE BOARD OF ACCOUNTS 32 CROTHERSVILLE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2. The ESSER II, Year 1 report, which covered the period of July 1, 2020 to June 30, 2021, reported total expenditures of $25,264; however, the School Corporation's ledger for the same period had total expenses of $244,923. In addition, 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) - Purchased Property Services" were reported incorrectly. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 2 and ESSER II, Year 1 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. . . ." Cause A proper system of internal controls was not designed and 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, 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. INDIANA STATE BOARD OF ACCOUNTS 33 CROTHERSVILLE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 supported by the School Corporation's underlying accounting records. 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 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, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance with the Reporting compliance requirement. 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 one ESSER III report, for a total of five 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 five reports were selected for testing, two of which were not supported by the School Corporation's records. The errors identified were as follows: 1. The ESSER I, Year 2 report, which covered the period of October 1, 2020 to June 30, 2021, reported total expenses of $24,256; however, the School Corporation's ledger for the same period had total expenses of $35,344. INDIANA STATE BOARD OF ACCOUNTS 32 CROTHERSVILLE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2. The ESSER II, Year 1 report, which covered the period of July 1, 2020 to June 30, 2021, reported total expenditures of $25,264; however, the School Corporation's ledger for the same period had total expenses of $244,923. In addition, 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) - Purchased Property Services" were reported incorrectly. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 2 and ESSER II, Year 1 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. . . ." Cause A proper system of internal controls was not designed and 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, 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. INDIANA STATE BOARD OF ACCOUNTS 33 CROTHERSVILLE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 supported by the School Corporation's underlying accounting records. 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 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, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance with the Reporting compliance requirement. 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 one ESSER III report, for a total of five 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 five reports were selected for testing, two of which were not supported by the School Corporation's records. The errors identified were as follows: 1. The ESSER I, Year 2 report, which covered the period of October 1, 2020 to June 30, 2021, reported total expenses of $24,256; however, the School Corporation's ledger for the same period had total expenses of $35,344. INDIANA STATE BOARD OF ACCOUNTS 32 CROTHERSVILLE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2. The ESSER II, Year 1 report, which covered the period of July 1, 2020 to June 30, 2021, reported total expenditures of $25,264; however, the School Corporation's ledger for the same period had total expenses of $244,923. In addition, 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) - Purchased Property Services" were reported incorrectly. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 2 and ESSER II, Year 1 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. . . ." Cause A proper system of internal controls was not designed and 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, 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. INDIANA STATE BOARD OF ACCOUNTS 33 CROTHERSVILLE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 supported by the School Corporation's underlying accounting records. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Department of Education and Passed through State of Iowa Department of Education Federal Financial Assistance Listing #84.287, C14-SHIP, C15-SHIP, C16-SHIP, C17-SHIP, 7/1/2022 – 6/30/2023 Twenty-First Century Community Learning Centers Program Cash Management Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. In addition, 2 CFR 200.302(b)(6) establishes that the financial management system of the entity must provide written procedures to implement the requirements of 2 CFR 200.305 Payment. Condition: No support could be provided for the third quarter draw requests to substantiate a secondary level of review was completed prior to submission of the draws. Cause: Documentation to support the review of draw requests prior to submission was not retained during the transition period in the Finance Director role. Effect: Without retaining supporting documentation to substantiate the review of draw requests, demonstrating that the program complies with laws, regulations, and other compliance requirements is difficult. Questioned Costs: None reported. Context: A non-statistical sample of 2 of 4 quarters were selected for testing. All draws submitted within the selected quarters were tested. Repeat Finding from Prior Year: No Recommendation: We acknowledge the review process lapsed during a time of employee transition, however, we recommend that management retain documentation to support the review of grant draws is performed for all grant draw requests. Views of Responsible Officials: Management is in agreement.
Section III - Federal Award Findings and Questioned Costs Finding 2023-002 Significant Deficiency Assistance Listing: 84.351 C.A.R.E. Condition: Cleveland Play House does not have adequate documentation to support all charges to the federal program. Of the 40 payroll charges tested, 32 did not have adequate documentation. Of the 40 non-payroll charges tested, supporting documentation for 2 charges was unable to be located. In addition, management provided an Excel spreadsheet to support the charges that were made to the program rather than reporting from their financial management system that is compliant with Section 200.302. Criteria: 2 CFR 200.430(i) states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 2 CFR 200.403(g) states that for costs to be allowed under Federal awards, they must be adequately documented. In addition, Section 200.302 requires that the financial management system must provide for an identification, in its accounts, of all federal awards received and expended and the federal programs under which they were received; an accurate, current and complete disclosure of the financial results of each federal award or program; and a comparison of expenditures with budget amounts for each federal award. Cause: Due to significant organizational turnover in fiscal years 2022 and 2023, individuals were not completing timesheets to document level of effort for federal programs. Although management was verbally communicating with these individuals during the year and tracking the time they spent on the program within a spreadsheet, this is not considered adequate documentation. In addition, and also a result of the turnover, certain documentation to support non-payroll expenditures was unable to be located. Effect: Cleveland Play House did not have adequate documentation to support all costs charged to the federal program. In addition, an ineffective financial management system could lead to incorrect identification of costs charged to a federal program and an inability to substantiate that doublecharging did not occur. Repeat finding: This is a repeat finding, refer to 2022-002. Section III - Federal Award Findings and Questioned Costs (Continued) Questioned costs: Non-payroll: $267 Payroll: $49,059 Recommendation: We recommend that Cleveland Play House develop a policy and procedure to ensure that all hours submitted for federal reimbursement are supported with timesheets that are approved by a supervisor. In addition, staff should be made aware of the policy and procedures to ensure retention of documentation for non-payroll expenditures. Views of responsible officials: Management concurs with this recommendation. See also corrective action plan.
Assistance Listings number and name: 10.691 Good Neighbor Authority Award numbers and year: 22-GN-11030400-027, January 14, 2022 through January 14, 2027 Federal agency: U.S. Department of Agriculture Compliance requirements: Reporting Questioned costs: None Condition—Contrary to federal regulations and the County’s federal award terms, the Flood Control Department (Department) failed to submit the required annual financial and performance reports for calendar year 2022 that were due on January 30, 2023. Effect—The Department not submitting the required financial and performance reports could potentially affect future federal funding and put the federal grantor at risk of not being able to carry out its oversight responsibilities and effectively evaluate the program’s success, and prevent and detect fraud. Cause—County management reported that the Department was aware of the program’s reporting requirements but had forgotten to complete them because the Department was focused on handling several natural disasters that were governor-declared emergencies. Further, the Department did not track its submission of reports so it was unaware that it had not submitted the missing reports. Criteria—Federal regulations and the County’s federal award terms require it to submit annual federal financial and performance reports to the U.S. Department of Agriculture no later than 30 days after calendar year-end that contain accurate, current, and complete information (2 CFR §§200.301 and 200.302). Also, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The County should: 1. Require the Department to complete and submit all missing financial and performance reports to the federal agency as soon as possible. 2. Develop and implement revisions to its federal grant policies and procedures that require its departments to monitor and track when required reports are due and submitted to ensure they are completed and submitted on time. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
FINDING 2023-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context For the Child Nutrition Cluster, the reimbursement for meals served is not based on costs; it is determined solely by applying the applicable meals rates formula. However, the School Corporation can use its entire reimbursement payment for any combination of allowable operating and administrative costs. All expenditures from the reimbursement payment must also be reasonable and allocable. The purchase of capital expenditures, those expenditures which are over $5,000 or more for an item that is to be used for general purposes for multiple years, must have approval by the Indiana Department of Education (IDOE) prior to purchase. In fiscal year 2022-2023, the School Corporation purchased two pieces of equipment, each over $5,000, without approval from the IDOE. The first piece of equipment was a liftgate in the amount of $6,906, and the second piece of equipment was a vehicle in the amount of $7,500. The total amount of $14,406 was considered questioned costs. In addition, the School Corporation did not have an allowable costs policy outlining the School Corporation's processes and policies with regards to costs charged to federal grants. The lack of effective 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 20 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.439(b) states in part: "The following rule of allowability must apply to equipment and other capital expenditures: . . . (2) Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5,000 or more have the prior written approval of the Federal awarding agency or pass-through entity. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (7) Written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award." 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 such, equipment was purchased without prior approval from the IDOE. 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 Questioned costs in the amount of $14,406 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that equipment purchased over $5,000 is approved by the IDOE prior to purchase. 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: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context For the Child Nutrition Cluster, the reimbursement for meals served is not based on costs; it is determined solely by applying the applicable meals rates formula. However, the School Corporation can use its entire reimbursement payment for any combination of allowable operating and administrative costs. All expenditures from the reimbursement payment must also be reasonable and allocable. The purchase of capital expenditures, those expenditures which are over $5,000 or more for an item that is to be used for general purposes for multiple years, must have approval by the Indiana Department of Education (IDOE) prior to purchase. In fiscal year 2022-2023, the School Corporation purchased two pieces of equipment, each over $5,000, without approval from the IDOE. The first piece of equipment was a liftgate in the amount of $6,906, and the second piece of equipment was a vehicle in the amount of $7,500. The total amount of $14,406 was considered questioned costs. In addition, the School Corporation did not have an allowable costs policy outlining the School Corporation's processes and policies with regards to costs charged to federal grants. The lack of effective 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 20 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.439(b) states in part: "The following rule of allowability must apply to equipment and other capital expenditures: . . . (2) Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5,000 or more have the prior written approval of the Federal awarding agency or pass-through entity. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (7) Written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award." 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 such, equipment was purchased without prior approval from the IDOE. 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 Questioned costs in the amount of $14,406 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that equipment purchased over $5,000 is approved by the IDOE prior to purchase. 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: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context For the Child Nutrition Cluster, the reimbursement for meals served is not based on costs; it is determined solely by applying the applicable meals rates formula. However, the School Corporation can use its entire reimbursement payment for any combination of allowable operating and administrative costs. All expenditures from the reimbursement payment must also be reasonable and allocable. The purchase of capital expenditures, those expenditures which are over $5,000 or more for an item that is to be used for general purposes for multiple years, must have approval by the Indiana Department of Education (IDOE) prior to purchase. In fiscal year 2022-2023, the School Corporation purchased two pieces of equipment, each over $5,000, without approval from the IDOE. The first piece of equipment was a liftgate in the amount of $6,906, and the second piece of equipment was a vehicle in the amount of $7,500. The total amount of $14,406 was considered questioned costs. In addition, the School Corporation did not have an allowable costs policy outlining the School Corporation's processes and policies with regards to costs charged to federal grants. The lack of effective 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 20 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.439(b) states in part: "The following rule of allowability must apply to equipment and other capital expenditures: . . . (2) Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5,000 or more have the prior written approval of the Federal awarding agency or pass-through entity. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (7) Written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award." 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 such, equipment was purchased without prior approval from the IDOE. 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 Questioned costs in the amount of $14,406 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that equipment purchased over $5,000 is approved by the IDOE prior to purchase. 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: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context For the Child Nutrition Cluster, the reimbursement for meals served is not based on costs; it is determined solely by applying the applicable meals rates formula. However, the School Corporation can use its entire reimbursement payment for any combination of allowable operating and administrative costs. All expenditures from the reimbursement payment must also be reasonable and allocable. The purchase of capital expenditures, those expenditures which are over $5,000 or more for an item that is to be used for general purposes for multiple years, must have approval by the Indiana Department of Education (IDOE) prior to purchase. In fiscal year 2022-2023, the School Corporation purchased two pieces of equipment, each over $5,000, without approval from the IDOE. The first piece of equipment was a liftgate in the amount of $6,906, and the second piece of equipment was a vehicle in the amount of $7,500. The total amount of $14,406 was considered questioned costs. In addition, the School Corporation did not have an allowable costs policy outlining the School Corporation's processes and policies with regards to costs charged to federal grants. The lack of effective 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 20 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.439(b) states in part: "The following rule of allowability must apply to equipment and other capital expenditures: . . . (2) Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5,000 or more have the prior written approval of the Federal awarding agency or pass-through entity. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (7) Written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award." 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 such, equipment was purchased without prior approval from the IDOE. 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 Questioned costs in the amount of $14,406 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that equipment purchased over $5,000 is approved by the IDOE prior to purchase. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.