Finding 2022-04 ? Fiscal Management System (Material Weakness) Criteria: CFR Part 200.302.b Auditee Responsibilities includes the requirement that the financial manage-ment system of each non-Federal entity provide the following. Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Accurate, cur-rent, and complete disclosure of the financial results of each Federal award or program. Condition: During the audit of Umpqua Public Transportation District for Fiscal Year 2021-2022, the dis-trict provided auditor with Separate and Identifiable General Ledger reports that showed a clear division be-tween Federal, State and Local expenditures and revenues. However, the separation was done retroactivity and was not been completed for the entire fiscal year or life of grants. This deficiency was instrumental in causing the general ledger to be inadequate for financial and Federal Award Reporting. Cause: The District had originally relied on unskilled individuals for structuring and recording activities in their general ledger. District management did not have sufficient staff or monitoring policies to recognize and correct the deficiency. While trained staff have been hired at Umpqua Public Transportation District, and improvements made to the general ledger and recording of Federal grants, improvements are still nec-essary to meet the full requirements of CFR Part 200.302.b Auditee Responsibilities. Effect or Potential Effect: Potential for incorrect financial reporting, and untimely results, with the inabil-ity to rely on the general ledger for correct and timely information. Questioned Cost: No Context: While federal grant revenues and expenditures are now tracked using the general ledger ?jobs? indicators, additional recording is needed to track the matching portions of the costs and revenues of those federal grants. The lack of completed effort at separating revenues or expenditures by grant may lead to er-rors in reporting expenditures for Federal Awards. Repeat of a Prior-Year Finding: Yes, Findings and Questioned Costs 2021-11 Recommendation: We recommend that Umpqua Public Transportation District improve their general ledg-er structure to meet the requirement for separate accounts for Federal awards for program revenues and program expenditures. We also recommend that the district establish policies and procedures to ensure that all program revenues and expenditures are reported in the correct fiscal year. In addition, we recommend that the district establish a training program and policies and procedures for staff and management to re-ceive appropriate training for administering and recording Federal Grant revenues and expenditures. District's Response: The District concurs with the recommendation. General ledger accounts separating Federal, State, and Local revenues and related expenditures will be designed and implemented. Corrective Action Plan: The District has hired a Finance Manager to oversee the day-to-day financial operations of the district. The Finance Manager has developed an accounting system for separating Feder-al, State, and Local revenues and related expenditures. This will allow the activities of the district to be rec-orded in a manner that allows for reporting in compliance with federal requirements. Planned Implementation Date: July 1, 2022 Responsible Person: General Manager, Umpqua Public Transit District
Criteria: 2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs. Condition: Lakewood Theatre Company has not developed written procedures for determining the allowability of costs. Cause: Administration did not have written procedures for determining the allowability of costs. Effect: Unallowable costs could be charged to the program. Questioned Costs: None Recommendations: Management should develop written procedures as required by 2 CFR Part 200.302(b)(7). Views of Responsible Officials: Management notes that, as this is their first time receiving significant federal funding and this was one-time emergency funding rather than an ongoing award, they do not have these procedures in writing. However, they reviewed the award allowability guidelines, assigned costs directly in accordance with those guidelines, discussed any costs with uncertain allowability with the awarding agency, and submitted the cost report along with supporting documentation directly to the awarding agency. While they do not anticipate receiving federal funding in the future, if this does occur, they will develop written procedures at that point.
Finding 2022-003 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 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. Effect: The Annual Data Reports required to be submitted during the audit period could have incomplete or inaccurate without a secondary, documented review in place. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit two Annual Data Reports to the Indiana Department of Education (IDOE) to meet federal reporting requirements for ESSER grant awards and the GEER grant award. The first report was for the period of March 13, 2020 to September 30, 2020 and was due by January 21, 2021. The second report was for the period of October 1, 2020 to June 30, 2021 and was due by May 13, 2022. We noted for both reports that were submitted, there was no documented review by someone other than the preparer of the report to ensure the information submitted was complete and accurate. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented, secondary 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 2022-003 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 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. Effect: The Annual Data Reports required to be submitted during the audit period could have incomplete or inaccurate without a secondary, documented review in place. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit two Annual Data Reports to the Indiana Department of Education (IDOE) to meet federal reporting requirements for ESSER grant awards and the GEER grant award. The first report was for the period of March 13, 2020 to September 30, 2020 and was due by January 21, 2021. The second report was for the period of October 1, 2020 to June 30, 2021 and was due by May 13, 2022. We noted for both reports that were submitted, there was no documented review by someone other than the preparer of the report to ensure the information submitted was complete and accurate. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented, secondary 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 2022-003 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 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. Effect: The Annual Data Reports required to be submitted during the audit period could have incomplete or inaccurate without a secondary, documented review in place. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit two Annual Data Reports to the Indiana Department of Education (IDOE) to meet federal reporting requirements for ESSER grant awards and the GEER grant award. The first report was for the period of March 13, 2020 to September 30, 2020 and was due by January 21, 2021. The second report was for the period of October 1, 2020 to June 30, 2021 and was due by May 13, 2022. We noted for both reports that were submitted, there was no documented review by someone other than the preparer of the report to ensure the information submitted was complete and accurate. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented, secondary 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 2022-003 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 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. Effect: The Annual Data Reports required to be submitted during the audit period could have incomplete or inaccurate without a secondary, documented review in place. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit two Annual Data Reports to the Indiana Department of Education (IDOE) to meet federal reporting requirements for ESSER grant awards and the GEER grant award. The first report was for the period of March 13, 2020 to September 30, 2020 and was due by January 21, 2021. The second report was for the period of October 1, 2020 to June 30, 2021 and was due by May 13, 2022. We noted for both reports that were submitted, there was no documented review by someone other than the preparer of the report to ensure the information submitted was complete and accurate. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented, secondary 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.
SECTION III ? FEDERAL AWARD FINDINGS AND QUESTIONED COSTS _____________________________________________________________________________________________________________________ FINDING NUMBER 2022-006 FEDERAL PROGRAM CORONAVIRUS RELIEF FUND (ASSISTANCE LISTING NUMBER 21.019) PASS-THROUGH PUERTO RICO FISCAL AGENCY AND FINANCIAL ADVISORY AUTHORITY U.S. DEPARTMENT OF THE TREASURY AWARD NUMBER TRANSFER AGREEMENTS PHASES I/ II/ III TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIREMENT REPORTING CONDITION As part of the reporting test, the final accumulated expenditures report submitted to the pass-through entity was examined. I noted that the Municipality reported the amount of $2,069,123 in the final accumulated expenditures report, which is $147,992 less than the amount of expenditures recorded in the accounting records of the Municipality. CRITERIA As established in the Uniform Guidance, 2 CFR Section 200.302, Financial Management, (a) the non-Federal entity?s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Also, Clause 2.3, Recordkeeping, of the Coronavirus Relief Fund (CRF) Transfer Agreement for the Assistance Program to Municipalities, established that the Transferee will maintain its books and records in a manner that will provide Transferor with sufficient detail to review Transferee?s receipts and expenditures relating to the Transfer. Transferee will make such records available for review by Transferor or its agent or designee upon reasonable notice during the Transfer period and for five (5) years after the termination or expiration of this Agreement. Also, Clause 5.1, Compliance Reporting Requirements, of the Coronavirus Relief Fund (CRF) Transfer Agreement for the Assistance Program to Municipalities, established that the Transferee shall submit reports as the Transferor determines are needed to verify use of the funds and compliance with conditions that are imposed on the Transfer, and such reports shall be in such form, which such content, as specified by the Transferor in the Transfer Plan and future program instructions directed to all Recipients. CAUSE The Municipality?s internal controls and procedures failed to ensure the accuracy and correctness of the reports submitted to the pass-through entity. EFFECT Possible inaccurate financial information could have been submitted to the pass-through entity that can lead the Municipality to be in noncompliance with the reporting requirements established in the transfer agreements. RECOMMENDATION I recommend the Municipality to continue strengthening the internal controls and monitoring procedures to ensure the accuracy and completeness of accounting records and the correct preparation and timely submission of the financial reports. QUESTIONED COSTS None PRIOR YEAR FINDING This finding is a prior year audit finding identified as 2021-005. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION We gave instructions to the finance department accounting staff to strengthening internal procedures and controls to ensure accurate preparation and submission of financial reports.
SECTION III ? FEDERAL AWARD FINDINGS AND QUESTIONED COSTS _____________________________________________________________________________________________________________________ FINDING NUMBER 2022-008 FEDERAL PROGRAM HEAD START CLUSTER (ASSISTANCE LISTING NUMBER 93.356/ 93.600) PASS-THROUGH PUERTO RICO ADMINISTRATION FOR THE CHILDHOOD CARE AND INTEGRAL DEVELOPMENT U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES AWARD NUMBERS 241-2022-000653/ 241-2021-000444/ 241-2021-000226/ 241-2020- 000139 TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIREMENT REPORTING CONDITION During the reporting test, a sample was selected of the monthly disbursement reports, including the Federal Financial Report (SF-425) and the final liquidation reports of the program year 2021-2022 of the Head Start/ Early Head Start grants and found the following situations: 1) For the Head Start/ Early Head Start programs, I selected a sample of the monthly disbursement reports, including the Federal Financial Report (SF-425), of November 2021 and February 2022 and the final liquidation reports of the program year 2021-2022 and noted that; a) for the monthly reports of November 2021 and February 2022, the Program did not provide evidence of the date in which the reports were submitted to the pass-through entity; b) certain differences in the revenues and expenditures were noted between the SF-425 and the accounting records of the Programs; c) the Program did not provide evidence of the preparation and submission of the final liquidation report of the program year 2021-2022 to the pass-through entity. 2) For the Head Start Disaster Recovery program, I selected for evaluation the Federal Financial Report (SF-425) of February 2022, related to the final liquidation report of the grant and noted that; 1) the Program did not provide evidence of the date in which the reports were submitted to the pass-through entity; b) certain differences were noted between the final liquidation report submitted to the passthrough entity and the accounting records of the Program; 3) as of June 30, 2022, the bank account of the Program maintain a cash balance of $3,288,516, which has not been return to the pass-through entity. 3) For the Head Start Cares Act program, I selected the Federal Financial Report (SF-425), of August 2021, related to the final liquidation report of the grant and noted that the Program did not provide evidence of the date in which the final liquidation report was submitted to the pass-through entity. 4) The Programs? accounting personnel did not maintain complete and adequate set of accounting records of the financial transactions of the Programs, that permits the tracing to the monthly and closing reports submitted to the pass-through entity. CRITERIA As established in the Uniform Guidance, 2 CFR Section 200.302, Financial Management, (a) the non-Federal entity?s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, clause Eight of the grant agreement between the passthrough entity and the Municipality establish that the Municipality should submit the monthly disbursements report on or before the first ten (10) days of the next month. Also, clause Eight states that after the closing of the program year, the Municipality should submit the following documents and reports: 1) a trial balance and a statement of revenues and expenditures on or before the first fifteen (15) days after the closing of the program; 2) a Federal Financial Report (SF-425) on or before the first fifteen (15) days after the closing of the program; and 3) a liquidation funds report at the closing of the fiscal operations must be submitted on or before the first fifteen (15) days after the closing of the program year and at the end of the term of the ninety (90) days to liquidate the outstanding obligations. CAUSE Adequate internal controls and monitoring procedures do not exist to ensure the timely submission and correctness of the monthly reports and the Federal Financial Reports (SF-425) submitted to the pass-through entity. EFFECT The Municipality and the Programs? accountants has not kept proper accounting records of the financial transactions of the Programs as required by Federal regulations and the grant agreements. Also, the Municipality was not in compliance with the accounting and reporting requirements and reporting deadlines established in the grant agreements with the pass-through entity. RECOMMENDATION I recommend that technical training must be provided to the accounting staff to improve the recordkeeping of the financial transactions of the Programs in order to maintain complete and accurate accounting records. QUESTIONED COSTS None PRIOR YEAR FINDING This finding is a prior year audit finding identified as 2021-004. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION On May 3, 2021, the Grantee inform the Municipality about the determination to temporarily submit to a partial protective intervention the programmatic and administrative function of the delegated agency of Pe?uelas. As a direct consequence of such a determination, since May 3, 2021, up to July 31, 2022 (grant termination date), two employees of the Grantee had interference in all fiscal and programmatic transactions of the delegated agency, requiring their authorization for fiscal or programmatic transactions to be carried out. During this timeframe, key personnel of the delegated agency, such as the Program Director, the Program Accountant, the Property Manager, among others, resigned or were required to be replaced by the Grantee?s representatives, altering the programmatic and fiscal operations of the delegated agency. About the program year 2021-2022 closing, the Municipality of Pe?uelas return the funds surplus after the end of the period of liquidation of obligations, including the $3,288,516 related to Head Start Disaster Recovery program retained in the Program restricted cash account as instructed by a Grantee?s representative. Related to the program year prematurely terminated by the Grantee (program year 2022-2023), the Municipality?s Finance Department staff reconciled the program fiscal transactions registered in the Municipality?s computerized accounting system, with the grant awards, as amended, and prepare a liquidation report of each grant award. Such reports will be submitted to the Grantee to discuss the steps for liquidation of obligations with third parties, and the reimbursement of payroll and other expenditures financed by the Municipality?s General Fund.
SECTION III ? FEDERAL AWARD FINDINGS AND QUESTIONED COSTS _____________________________________________________________________________________________________________________ FINDING NUMBER 2022-008 FEDERAL PROGRAM HEAD START CLUSTER (ASSISTANCE LISTING NUMBER 93.356/ 93.600) PASS-THROUGH PUERTO RICO ADMINISTRATION FOR THE CHILDHOOD CARE AND INTEGRAL DEVELOPMENT U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES AWARD NUMBERS 241-2022-000653/ 241-2021-000444/ 241-2021-000226/ 241-2020- 000139 TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIREMENT REPORTING CONDITION During the reporting test, a sample was selected of the monthly disbursement reports, including the Federal Financial Report (SF-425) and the final liquidation reports of the program year 2021-2022 of the Head Start/ Early Head Start grants and found the following situations: 1) For the Head Start/ Early Head Start programs, I selected a sample of the monthly disbursement reports, including the Federal Financial Report (SF-425), of November 2021 and February 2022 and the final liquidation reports of the program year 2021-2022 and noted that; a) for the monthly reports of November 2021 and February 2022, the Program did not provide evidence of the date in which the reports were submitted to the pass-through entity; b) certain differences in the revenues and expenditures were noted between the SF-425 and the accounting records of the Programs; c) the Program did not provide evidence of the preparation and submission of the final liquidation report of the program year 2021-2022 to the pass-through entity. 2) For the Head Start Disaster Recovery program, I selected for evaluation the Federal Financial Report (SF-425) of February 2022, related to the final liquidation report of the grant and noted that; 1) the Program did not provide evidence of the date in which the reports were submitted to the pass-through entity; b) certain differences were noted between the final liquidation report submitted to the passthrough entity and the accounting records of the Program; 3) as of June 30, 2022, the bank account of the Program maintain a cash balance of $3,288,516, which has not been return to the pass-through entity. 3) For the Head Start Cares Act program, I selected the Federal Financial Report (SF-425), of August 2021, related to the final liquidation report of the grant and noted that the Program did not provide evidence of the date in which the final liquidation report was submitted to the pass-through entity. 4) The Programs? accounting personnel did not maintain complete and adequate set of accounting records of the financial transactions of the Programs, that permits the tracing to the monthly and closing reports submitted to the pass-through entity. CRITERIA As established in the Uniform Guidance, 2 CFR Section 200.302, Financial Management, (a) the non-Federal entity?s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, clause Eight of the grant agreement between the passthrough entity and the Municipality establish that the Municipality should submit the monthly disbursements report on or before the first ten (10) days of the next month. Also, clause Eight states that after the closing of the program year, the Municipality should submit the following documents and reports: 1) a trial balance and a statement of revenues and expenditures on or before the first fifteen (15) days after the closing of the program; 2) a Federal Financial Report (SF-425) on or before the first fifteen (15) days after the closing of the program; and 3) a liquidation funds report at the closing of the fiscal operations must be submitted on or before the first fifteen (15) days after the closing of the program year and at the end of the term of the ninety (90) days to liquidate the outstanding obligations. CAUSE Adequate internal controls and monitoring procedures do not exist to ensure the timely submission and correctness of the monthly reports and the Federal Financial Reports (SF-425) submitted to the pass-through entity. EFFECT The Municipality and the Programs? accountants has not kept proper accounting records of the financial transactions of the Programs as required by Federal regulations and the grant agreements. Also, the Municipality was not in compliance with the accounting and reporting requirements and reporting deadlines established in the grant agreements with the pass-through entity. RECOMMENDATION I recommend that technical training must be provided to the accounting staff to improve the recordkeeping of the financial transactions of the Programs in order to maintain complete and accurate accounting records. QUESTIONED COSTS None PRIOR YEAR FINDING This finding is a prior year audit finding identified as 2021-004. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION On May 3, 2021, the Grantee inform the Municipality about the determination to temporarily submit to a partial protective intervention the programmatic and administrative function of the delegated agency of Pe?uelas. As a direct consequence of such a determination, since May 3, 2021, up to July 31, 2022 (grant termination date), two employees of the Grantee had interference in all fiscal and programmatic transactions of the delegated agency, requiring their authorization for fiscal or programmatic transactions to be carried out. During this timeframe, key personnel of the delegated agency, such as the Program Director, the Program Accountant, the Property Manager, among others, resigned or were required to be replaced by the Grantee?s representatives, altering the programmatic and fiscal operations of the delegated agency. About the program year 2021-2022 closing, the Municipality of Pe?uelas return the funds surplus after the end of the period of liquidation of obligations, including the $3,288,516 related to Head Start Disaster Recovery program retained in the Program restricted cash account as instructed by a Grantee?s representative. Related to the program year prematurely terminated by the Grantee (program year 2022-2023), the Municipality?s Finance Department staff reconciled the program fiscal transactions registered in the Municipality?s computerized accounting system, with the grant awards, as amended, and prepare a liquidation report of each grant award. Such reports will be submitted to the Grantee to discuss the steps for liquidation of obligations with third parties, and the reimbursement of payroll and other expenditures financed by the Municipality?s General Fund.
SECTION III ? FEDERAL AWARD FINDINGS AND QUESTIONED COSTS _____________________________________________________________________________________________________________________ FINDING NUMBER 2022-008 FEDERAL PROGRAM HEAD START CLUSTER (ASSISTANCE LISTING NUMBER 93.356/ 93.600) PASS-THROUGH PUERTO RICO ADMINISTRATION FOR THE CHILDHOOD CARE AND INTEGRAL DEVELOPMENT U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES AWARD NUMBERS 241-2022-000653/ 241-2021-000444/ 241-2021-000226/ 241-2020- 000139 TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIREMENT REPORTING CONDITION During the reporting test, a sample was selected of the monthly disbursement reports, including the Federal Financial Report (SF-425) and the final liquidation reports of the program year 2021-2022 of the Head Start/ Early Head Start grants and found the following situations: 1) For the Head Start/ Early Head Start programs, I selected a sample of the monthly disbursement reports, including the Federal Financial Report (SF-425), of November 2021 and February 2022 and the final liquidation reports of the program year 2021-2022 and noted that; a) for the monthly reports of November 2021 and February 2022, the Program did not provide evidence of the date in which the reports were submitted to the pass-through entity; b) certain differences in the revenues and expenditures were noted between the SF-425 and the accounting records of the Programs; c) the Program did not provide evidence of the preparation and submission of the final liquidation report of the program year 2021-2022 to the pass-through entity. 2) For the Head Start Disaster Recovery program, I selected for evaluation the Federal Financial Report (SF-425) of February 2022, related to the final liquidation report of the grant and noted that; 1) the Program did not provide evidence of the date in which the reports were submitted to the pass-through entity; b) certain differences were noted between the final liquidation report submitted to the passthrough entity and the accounting records of the Program; 3) as of June 30, 2022, the bank account of the Program maintain a cash balance of $3,288,516, which has not been return to the pass-through entity. 3) For the Head Start Cares Act program, I selected the Federal Financial Report (SF-425), of August 2021, related to the final liquidation report of the grant and noted that the Program did not provide evidence of the date in which the final liquidation report was submitted to the pass-through entity. 4) The Programs? accounting personnel did not maintain complete and adequate set of accounting records of the financial transactions of the Programs, that permits the tracing to the monthly and closing reports submitted to the pass-through entity. CRITERIA As established in the Uniform Guidance, 2 CFR Section 200.302, Financial Management, (a) the non-Federal entity?s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, clause Eight of the grant agreement between the passthrough entity and the Municipality establish that the Municipality should submit the monthly disbursements report on or before the first ten (10) days of the next month. Also, clause Eight states that after the closing of the program year, the Municipality should submit the following documents and reports: 1) a trial balance and a statement of revenues and expenditures on or before the first fifteen (15) days after the closing of the program; 2) a Federal Financial Report (SF-425) on or before the first fifteen (15) days after the closing of the program; and 3) a liquidation funds report at the closing of the fiscal operations must be submitted on or before the first fifteen (15) days after the closing of the program year and at the end of the term of the ninety (90) days to liquidate the outstanding obligations. CAUSE Adequate internal controls and monitoring procedures do not exist to ensure the timely submission and correctness of the monthly reports and the Federal Financial Reports (SF-425) submitted to the pass-through entity. EFFECT The Municipality and the Programs? accountants has not kept proper accounting records of the financial transactions of the Programs as required by Federal regulations and the grant agreements. Also, the Municipality was not in compliance with the accounting and reporting requirements and reporting deadlines established in the grant agreements with the pass-through entity. RECOMMENDATION I recommend that technical training must be provided to the accounting staff to improve the recordkeeping of the financial transactions of the Programs in order to maintain complete and accurate accounting records. QUESTIONED COSTS None PRIOR YEAR FINDING This finding is a prior year audit finding identified as 2021-004. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION On May 3, 2021, the Grantee inform the Municipality about the determination to temporarily submit to a partial protective intervention the programmatic and administrative function of the delegated agency of Pe?uelas. As a direct consequence of such a determination, since May 3, 2021, up to July 31, 2022 (grant termination date), two employees of the Grantee had interference in all fiscal and programmatic transactions of the delegated agency, requiring their authorization for fiscal or programmatic transactions to be carried out. During this timeframe, key personnel of the delegated agency, such as the Program Director, the Program Accountant, the Property Manager, among others, resigned or were required to be replaced by the Grantee?s representatives, altering the programmatic and fiscal operations of the delegated agency. About the program year 2021-2022 closing, the Municipality of Pe?uelas return the funds surplus after the end of the period of liquidation of obligations, including the $3,288,516 related to Head Start Disaster Recovery program retained in the Program restricted cash account as instructed by a Grantee?s representative. Related to the program year prematurely terminated by the Grantee (program year 2022-2023), the Municipality?s Finance Department staff reconciled the program fiscal transactions registered in the Municipality?s computerized accounting system, with the grant awards, as amended, and prepare a liquidation report of each grant award. Such reports will be submitted to the Grantee to discuss the steps for liquidation of obligations with third parties, and the reimbursement of payroll and other expenditures financed by the Municipality?s General Fund.
Finding 2022-001 Year-End Close Process/Account Reconciliations Information on the Federal Programs: CFDA 14.235 Criteria or Specific Requirement: In accordance with CFR 200.302 the financial management system of each non-Federal entity must provide for effective control over, and accountability for, all funds, property, and other assets. The non-Federal entity must adequately safeguard all assets and assure that they are used solely for authorized purposes. Condition: The initial financial information provided for the audit was not accurate, resulting in delays in the audit process. In addition, we noted that certain schedules/reconciliations were not properly prepared in advance of the audit. Cause: NEW transitioned to a new accounting software during the fiscal year. We noted that NEW encountered certain difficulties during this process. Effect or Potential Effect: If each account is not reconciled regularly, it increases the risk of loss of Federal funds. Questioned Costs: None Context: The transition to the new accounting system resulted in certain challenges. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: We recommend that NEW complete the transition to the new system and ensure that each account is properly reconciled on a monthly basis.
Finding 2022-002: Support for Schedule of Expenditures of Federal Awards in the Accounting System Information on the Federal Programs: CFDA 14.235 Criteria or Specific Requirement: In accordance with CFR 200.302 (financial management) the auditee must be able to identify all Federal awards received and expenses and the Federal programs under which they were received. Condition: We noted that in the transition from the previous accounting system, certain expenditures had not been properly classified in the new system. As a result, although detailed invoices were available to support the amounts reported on the SEFA, the expenses had not been accurately classified by award within the general ledger. Cause: NEW transitioned to a new accounting software during the fiscal year. We noted that NEW encountered certain difficulties during this process. Effect or Potential Effect: If the information on the SEFA cannot be traced back to the information within the accounting system, there is an increased potential for inaccurate reporting. Questioned Costs: Indeterminable Context: The transition to the new accounting system resulted in certain challenges. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: We recommend that NEW complete the transition to the new system and ensure that each account is properly reconciled on a monthly basis.
Finding 2022-001 Year-End Close Process/Account Reconciliations Information on the Federal Programs: CFDA 14.235 Criteria or Specific Requirement: In accordance with CFR 200.302 the financial management system of each non-Federal entity must provide for effective control over, and accountability for, all funds, property, and other assets. The non-Federal entity must adequately safeguard all assets and assure that they are used solely for authorized purposes. Condition: The initial financial information provided for the audit was not accurate, resulting in delays in the audit process. In addition, we noted that certain schedules/reconciliations were not properly prepared in advance of the audit. Cause: NEW transitioned to a new accounting software during the fiscal year. We noted that NEW encountered certain difficulties during this process. Effect or Potential Effect: If each account is not reconciled regularly, it increases the risk of loss of Federal funds. Questioned Costs: None Context: The transition to the new accounting system resulted in certain challenges. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: We recommend that NEW complete the transition to the new system and ensure that each account is properly reconciled on a monthly basis.
Finding 2022-002: Support for Schedule of Expenditures of Federal Awards in the Accounting System Information on the Federal Programs: CFDA 14.235 Criteria or Specific Requirement: In accordance with CFR 200.302 (financial management) the auditee must be able to identify all Federal awards received and expenses and the Federal programs under which they were received. Condition: We noted that in the transition from the previous accounting system, certain expenditures had not been properly classified in the new system. As a result, although detailed invoices were available to support the amounts reported on the SEFA, the expenses had not been accurately classified by award within the general ledger. Cause: NEW transitioned to a new accounting software during the fiscal year. We noted that NEW encountered certain difficulties during this process. Effect or Potential Effect: If the information on the SEFA cannot be traced back to the information within the accounting system, there is an increased potential for inaccurate reporting. Questioned Costs: Indeterminable Context: The transition to the new accounting system resulted in certain challenges. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: We recommend that NEW complete the transition to the new system and ensure that each account is properly reconciled on a monthly basis.
Finding 2022-001 Year-End Close Process/Account Reconciliations Information on the Federal Programs: CFDA 14.235 Criteria or Specific Requirement: In accordance with CFR 200.302 the financial management system of each non-Federal entity must provide for effective control over, and accountability for, all funds, property, and other assets. The non-Federal entity must adequately safeguard all assets and assure that they are used solely for authorized purposes. Condition: The initial financial information provided for the audit was not accurate, resulting in delays in the audit process. In addition, we noted that certain schedules/reconciliations were not properly prepared in advance of the audit. Cause: NEW transitioned to a new accounting software during the fiscal year. We noted that NEW encountered certain difficulties during this process. Effect or Potential Effect: If each account is not reconciled regularly, it increases the risk of loss of Federal funds. Questioned Costs: None Context: The transition to the new accounting system resulted in certain challenges. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: We recommend that NEW complete the transition to the new system and ensure that each account is properly reconciled on a monthly basis.
Finding 2022-002: Support for Schedule of Expenditures of Federal Awards in the Accounting System Information on the Federal Programs: CFDA 14.235 Criteria or Specific Requirement: In accordance with CFR 200.302 (financial management) the auditee must be able to identify all Federal awards received and expenses and the Federal programs under which they were received. Condition: We noted that in the transition from the previous accounting system, certain expenditures had not been properly classified in the new system. As a result, although detailed invoices were available to support the amounts reported on the SEFA, the expenses had not been accurately classified by award within the general ledger. Cause: NEW transitioned to a new accounting software during the fiscal year. We noted that NEW encountered certain difficulties during this process. Effect or Potential Effect: If the information on the SEFA cannot be traced back to the information within the accounting system, there is an increased potential for inaccurate reporting. Questioned Costs: Indeterminable Context: The transition to the new accounting system resulted in certain challenges. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: We recommend that NEW complete the transition to the new system and ensure that each account is properly reconciled on a monthly basis.
Finding 2022-001 Year-End Close Process/Account Reconciliations Information on the Federal Programs: CFDA 14.235 Criteria or Specific Requirement: In accordance with CFR 200.302 the financial management system of each non-Federal entity must provide for effective control over, and accountability for, all funds, property, and other assets. The non-Federal entity must adequately safeguard all assets and assure that they are used solely for authorized purposes. Condition: The initial financial information provided for the audit was not accurate, resulting in delays in the audit process. In addition, we noted that certain schedules/reconciliations were not properly prepared in advance of the audit. Cause: NEW transitioned to a new accounting software during the fiscal year. We noted that NEW encountered certain difficulties during this process. Effect or Potential Effect: If each account is not reconciled regularly, it increases the risk of loss of Federal funds. Questioned Costs: None Context: The transition to the new accounting system resulted in certain challenges. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: We recommend that NEW complete the transition to the new system and ensure that each account is properly reconciled on a monthly basis.
Finding 2022-002: Support for Schedule of Expenditures of Federal Awards in the Accounting System Information on the Federal Programs: CFDA 14.235 Criteria or Specific Requirement: In accordance with CFR 200.302 (financial management) the auditee must be able to identify all Federal awards received and expenses and the Federal programs under which they were received. Condition: We noted that in the transition from the previous accounting system, certain expenditures had not been properly classified in the new system. As a result, although detailed invoices were available to support the amounts reported on the SEFA, the expenses had not been accurately classified by award within the general ledger. Cause: NEW transitioned to a new accounting software during the fiscal year. We noted that NEW encountered certain difficulties during this process. Effect or Potential Effect: If the information on the SEFA cannot be traced back to the information within the accounting system, there is an increased potential for inaccurate reporting. Questioned Costs: Indeterminable Context: The transition to the new accounting system resulted in certain challenges. Identification as a Repeat Finding, if Applicable: Not applicable Recommendation: We recommend that NEW complete the transition to the new system and ensure that each account is properly reconciled on a monthly basis.
Type: Federal award, Significant Deficiency over Schedule of Expenditures of Federal Awards (SEFA) CFDA Number: U.S. Department of Transportation 20.513 Enhanced Transit Services Programs Cluster 20.507 Federal Transit Formula Grants Requirement: The Organization should have a process in place to review the schedule of federal expenditures. The schedule of federal awards did not initially identify federal expenditures in accordance with 2 CFR 200.302. Condition/Context: The Organization?s initial schedule of expenditures of federal awards (SEFA) presented for the audit did not identify all federal awards. The SEFA excluded a new award and required adjustments. Effect: Total expenditures by federal funding source may not be properly reported and Uniform Guidance reporting may be inaccurate. Questioned Costs: None. Recommendation: The Organization should implement additional procedures to review the preparation of the SEFA presented for the audit to accurately capture all activity under federal awards. Management?s Response: We agree that the draft SEFA did not initially identify all federal awards. Controls over preparation of the SEFA were not fully complete at the time it was presented to the auditors. We believe the controls would have identified all federal expenditures in accordance with 2 CFR 200.302 if they had been further completed prior to submission to the auditors.
Type: Federal award, Significant Deficiency over Schedule of Expenditures of Federal Awards (SEFA) CFDA Number: U.S. Department of Transportation 20.513 Enhanced Transit Services Programs Cluster 20.507 Federal Transit Formula Grants Requirement: The Organization should have a process in place to review the schedule of federal expenditures. The schedule of federal awards did not initially identify federal expenditures in accordance with 2 CFR 200.302. Condition/Context: The Organization?s initial schedule of expenditures of federal awards (SEFA) presented for the audit did not identify all federal awards. The SEFA excluded a new award and required adjustments. Effect: Total expenditures by federal funding source may not be properly reported and Uniform Guidance reporting may be inaccurate. Questioned Costs: None. Recommendation: The Organization should implement additional procedures to review the preparation of the SEFA presented for the audit to accurately capture all activity under federal awards. Management?s Response: We agree that the draft SEFA did not initially identify all federal awards. Controls over preparation of the SEFA were not fully complete at the time it was presented to the auditors. We believe the controls would have identified all federal expenditures in accordance with 2 CFR 200.302 if they had been further completed prior to submission to the auditors.
Type: Federal award, Significant Deficiency over Schedule of Expenditures of Federal Awards (SEFA) CFDA Number: U.S. Department of Transportation 20.513 Enhanced Transit Services Programs Cluster 20.507 Federal Transit Formula Grants Requirement: The Organization should have a process in place to review the schedule of federal expenditures. The schedule of federal awards did not initially identify federal expenditures in accordance with 2 CFR 200.302. Condition/Context: The Organization?s initial schedule of expenditures of federal awards (SEFA) presented for the audit did not identify all federal awards. The SEFA excluded a new award and required adjustments. Effect: Total expenditures by federal funding source may not be properly reported and Uniform Guidance reporting may be inaccurate. Questioned Costs: None. Recommendation: The Organization should implement additional procedures to review the preparation of the SEFA presented for the audit to accurately capture all activity under federal awards. Management?s Response: We agree that the draft SEFA did not initially identify all federal awards. Controls over preparation of the SEFA were not fully complete at the time it was presented to the auditors. We believe the controls would have identified all federal expenditures in accordance with 2 CFR 200.302 if they had been further completed prior to submission to the auditors.
Type: Federal award, Significant Deficiency over Schedule of Expenditures of Federal Awards (SEFA) CFDA Number: U.S. Department of Transportation 20.513 Enhanced Transit Services Programs Cluster 20.507 Federal Transit Formula Grants Requirement: The Organization should have a process in place to review the schedule of federal expenditures. The schedule of federal awards did not initially identify federal expenditures in accordance with 2 CFR 200.302. Condition/Context: The Organization?s initial schedule of expenditures of federal awards (SEFA) presented for the audit did not identify all federal awards. The SEFA excluded a new award and required adjustments. Effect: Total expenditures by federal funding source may not be properly reported and Uniform Guidance reporting may be inaccurate. Questioned Costs: None. Recommendation: The Organization should implement additional procedures to review the preparation of the SEFA presented for the audit to accurately capture all activity under federal awards. Management?s Response: We agree that the draft SEFA did not initially identify all federal awards. Controls over preparation of the SEFA were not fully complete at the time it was presented to the auditors. We believe the controls would have identified all federal expenditures in accordance with 2 CFR 200.302 if they had been further completed prior to submission to the auditors.
Type: Federal award, Significant Deficiency over Schedule of Expenditures of Federal Awards (SEFA) CFDA Number: U.S. Department of Transportation 20.513 Enhanced Transit Services Programs Cluster 20.507 Federal Transit Formula Grants Requirement: The Organization should have a process in place to review the schedule of federal expenditures. The schedule of federal awards did not initially identify federal expenditures in accordance with 2 CFR 200.302. Condition/Context: The Organization?s initial schedule of expenditures of federal awards (SEFA) presented for the audit did not identify all federal awards. The SEFA excluded a new award and required adjustments. Effect: Total expenditures by federal funding source may not be properly reported and Uniform Guidance reporting may be inaccurate. Questioned Costs: None. Recommendation: The Organization should implement additional procedures to review the preparation of the SEFA presented for the audit to accurately capture all activity under federal awards. Management?s Response: We agree that the draft SEFA did not initially identify all federal awards. Controls over preparation of the SEFA were not fully complete at the time it was presented to the auditors. We believe the controls would have identified all federal expenditures in accordance with 2 CFR 200.302 if they had been further completed prior to submission to the auditors.
Type: Federal award, Significant Deficiency over Schedule of Expenditures of Federal Awards (SEFA) CFDA Number: U.S. Department of Transportation 20.513 Enhanced Transit Services Programs Cluster 20.507 Federal Transit Formula Grants Requirement: The Organization should have a process in place to review the schedule of federal expenditures. The schedule of federal awards did not initially identify federal expenditures in accordance with 2 CFR 200.302. Condition/Context: The Organization?s initial schedule of expenditures of federal awards (SEFA) presented for the audit did not identify all federal awards. The SEFA excluded a new award and required adjustments. Effect: Total expenditures by federal funding source may not be properly reported and Uniform Guidance reporting may be inaccurate. Questioned Costs: None. Recommendation: The Organization should implement additional procedures to review the preparation of the SEFA presented for the audit to accurately capture all activity under federal awards. Management?s Response: We agree that the draft SEFA did not initially identify all federal awards. Controls over preparation of the SEFA were not fully complete at the time it was presented to the auditors. We believe the controls would have identified all federal expenditures in accordance with 2 CFR 200.302 if they had been further completed prior to submission to the auditors.
Significant Deficiency 2022-002 Written Uniform Guidance Policies and Procedures Federal Program: U.S. Department of Housing and Urban Development Federal Assistance Listing 14.155 ? Section 207-223(f) Mortgage Insurance for the Purchase or Refinance of Existing Multi-Family Projects Criteria: Uniform Guidance requires written procedures for cash management and determining the allowability of costs in accordance with Subpart E ? Cost Principals. Condition: Susanne Corporation did not have written procedures for cash management (2 CFR 200.302(b)(6)) and allowable costs determination (2 CFR 200.302(b)(7)) in accordance with Uniform Guidance requirements. Questioned Costs: $0 Cause: Susanne Corporation?s written policies and procedures were not updated to include required Uniform Guidance policies. Effect: Employees of Susanne Corporation could enter into a transaction that is not in compliance with Uniform Guidance requirements. Recommendation: We recommend Susanne Corporation should draft and adopt written procedures in accordance with Uniform Guidance requirements. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and is in the process of drafting and implementing written procedures for cash management and determining the allowability of costs in accordance with Subpart E ? Cost Principals.
FINDING 2022-003 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, 84.425U 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. 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 two Annual Data Reports to the Indiana Department of Education (IDOE) to meet federal reporting requirements for ESSER and GEER grant awards. The first report was for the period of March 13, 2020 to September 30, 2020 and was due by January 21, 2021. The second report was for the period of October 1, 2020 to June 30, 2021 and was due by May 13, 2022. We noted the amount reported as expended, $0 for ESSER I, on the second report did not agree to the amounts expended per the underlying expenditure records, $28,353 for ESSER I of the School Corporation. Additionally, we noted the for both reports that were submitted, there was no documented review by someone other than the preparer of the report to ensure the information submitted was complete and accurate. 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 2022-003 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, 84.425U 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. 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 two Annual Data Reports to the Indiana Department of Education (IDOE) to meet federal reporting requirements for ESSER and GEER grant awards. The first report was for the period of March 13, 2020 to September 30, 2020 and was due by January 21, 2021. The second report was for the period of October 1, 2020 to June 30, 2021 and was due by May 13, 2022. We noted the amount reported as expended, $0 for ESSER I, on the second report did not agree to the amounts expended per the underlying expenditure records, $28,353 for ESSER I of the School Corporation. Additionally, we noted the for both reports that were submitted, there was no documented review by someone other than the preparer of the report to ensure the information submitted was complete and accurate. 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 2022-003 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, 84.425U 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. 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 two Annual Data Reports to the Indiana Department of Education (IDOE) to meet federal reporting requirements for ESSER and GEER grant awards. The first report was for the period of March 13, 2020 to September 30, 2020 and was due by January 21, 2021. The second report was for the period of October 1, 2020 to June 30, 2021 and was due by May 13, 2022. We noted the amount reported as expended, $0 for ESSER I, on the second report did not agree to the amounts expended per the underlying expenditure records, $28,353 for ESSER I of the School Corporation. Additionally, we noted the for both reports that were submitted, there was no documented review by someone other than the preparer of the report to ensure the information submitted was complete and accurate. 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 2022-004 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 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 An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) annual data reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight, or review process in place to detect and correct errors. Additionally, for one of ten key line items tested the School Corporation did not accurately report the information. The Full-time Equivalent (FTE) positions as of March 13, 2020, and September 30, 2020, as required by the ESSER 1, Year 1 annual data report did not agree with the documentation provided. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 1 report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(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 Management had not developed, nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 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 An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) annual data reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight, or review process in place to detect and correct errors. Additionally, for one of ten key line items tested the School Corporation did not accurately report the information. The Full-time Equivalent (FTE) positions as of March 13, 2020, and September 30, 2020, as required by the ESSER 1, Year 1 annual data report did not agree with the documentation provided. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 1 report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(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 Management had not developed, nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 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 An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) annual data reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight, or review process in place to detect and correct errors. Additionally, for one of ten key line items tested the School Corporation did not accurately report the information. The Full-time Equivalent (FTE) positions as of March 13, 2020, and September 30, 2020, as required by the ESSER 1, Year 1 annual data report did not agree with the documentation provided. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 1 report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(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 Management had not developed, nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 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 An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) annual data reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight, or review process in place to detect and correct errors. Additionally, for one of ten key line items tested the School Corporation did not accurately report the information. The Full-time Equivalent (FTE) positions as of March 13, 2020, and September 30, 2020, as required by the ESSER 1, Year 1 annual data report did not agree with the documentation provided. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 1 report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(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 Management had not developed, nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2022-003 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: 84.425C, 84.425D, 84.425U Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness 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. 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 two Annual Data Reports to the Indiana Department of Education (IDOE) to meet federal reporting requirements for ESSER and GEER grant awards. The first report was for the period of March 13, 2020 to September 30, 2020 and was due by January 21, 2021. The second report was for the period of October 1, 2020 to June 30, 2021 and was due by May 13, 2022. We noted the amounts reported as expended ($0) on both reports did not agree to the amounts expended per the underlying expenditure records, $32,108 for the first report time period and $28,300 for the second report time period of the School Corporation. Additionally, we noted the for both reports that were submitted, there was no documented review by someone other than the preparer of the report to ensure the information submitted was complete and accurate. 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 2022-003 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: 84.425C, 84.425D, 84.425U Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness 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. 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 two Annual Data Reports to the Indiana Department of Education (IDOE) to meet federal reporting requirements for ESSER and GEER grant awards. The first report was for the period of March 13, 2020 to September 30, 2020 and was due by January 21, 2021. The second report was for the period of October 1, 2020 to June 30, 2021 and was due by May 13, 2022. We noted the amounts reported as expended ($0) on both reports did not agree to the amounts expended per the underlying expenditure records, $32,108 for the first report time period and $28,300 for the second report time period of the School Corporation. Additionally, we noted the for both reports that were submitted, there was no documented review by someone other than the preparer of the report to ensure the information submitted was complete and accurate. 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 2022-003 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: 84.425C, 84.425D, 84.425U Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness 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. 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 two Annual Data Reports to the Indiana Department of Education (IDOE) to meet federal reporting requirements for ESSER and GEER grant awards. The first report was for the period of March 13, 2020 to September 30, 2020 and was due by January 21, 2021. The second report was for the period of October 1, 2020 to June 30, 2021 and was due by May 13, 2022. We noted the amounts reported as expended ($0) on both reports did not agree to the amounts expended per the underlying expenditure records, $32,108 for the first report time period and $28,300 for the second report time period of the School Corporation. Additionally, we noted the for both reports that were submitted, there was no documented review by someone other than the preparer of the report to ensure the information submitted was complete and accurate. 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 2022-003 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: 84.425C, 84.425D, 84.425U Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness 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. 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 two Annual Data Reports to the Indiana Department of Education (IDOE) to meet federal reporting requirements for ESSER and GEER grant awards. The first report was for the period of March 13, 2020 to September 30, 2020 and was due by January 21, 2021. The second report was for the period of October 1, 2020 to June 30, 2021 and was due by May 13, 2022. We noted the amounts reported as expended ($0) on both reports did not agree to the amounts expended per the underlying expenditure records, $32,108 for the first report time period and $28,300 for the second report time period of the School Corporation. Additionally, we noted the for both reports that were submitted, there was no documented review by someone other than the preparer of the report to ensure the information submitted was complete and accurate. 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 2022-002 Subject: Education Stabilization Fund ? Annual Data Report Federal Agency: Department of Education Federal Program: COVID-19 ? Education Stabilization Fund Assistance Listing Number: 84.425D Federal Award Number and Year (or Other Identifying Numbers): S425D200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR 200.302(b) 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) " "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 documented review control in place to ensure the annual data report was reviewed by someone other than the preparer. 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. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirements. Questioned Costs: There were no questioned costs identified. Context: There was no documented review by someone other than the preparer of the Annual Data Report to ensure the information submitted was complete and accurate. Additionally, the ESSER II Year 1 Annual Data Report submitted to the Indiana Department of Education did not disclose any expenditures and was therefore, understated by approximately $394,000. 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 2022-002 Subject: Education Stabilization Fund ? Annual Data Report Federal Agency: Department of Education Federal Program: COVID-19 ? Education Stabilization Fund Assistance Listing Number: 84.425D Federal Award Number and Year (or Other Identifying Numbers): S425D200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR 200.302(b) 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) " "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 documented review control in place to ensure the annual data report was reviewed by someone other than the preparer. 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. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirements. Questioned Costs: There were no questioned costs identified. Context: There was no documented review by someone other than the preparer of the Annual Data Report to ensure the information submitted was complete and accurate. Additionally, the ESSER II Year 1 Annual Data Report submitted to the Indiana Department of Education did not disclose any expenditures and was therefore, understated by approximately $394,000. 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.
Criteria: The Uniform Guidance requires nonfederal entities that receive federal awards to establish written policies, procedures, or standards of conduct as described in the following sections: Financial management (2 CFR 200.302) Payment (2 CFR 200.305) General procurement standards (2 CFR 200.318) Competition (2 CFR 200.319) Methods of procurement to be followed (2 CFR 200.320) Compensation ? personal services (2 CFR 200.430) Compensation ? fringe benefits (2 CFR 200.431) Transportation costs (2 CFR 200.474) Condition: The Town did not have written policies, procedures, and standards of conduct relative to federal awards as required by the Uniform Guidance. Cause: The Town was not aware of these requirements. Effect: The Town is not in compliance with the Uniform Guidance with respect to these written policies. Recommendation: We recommend that the Town update its policies and procedures to comply with the Uniform Guidance requirements mentioned above. Management?s Response: We agree that our existing policies do not explicitly address federal award compliance requirements. We will be updating the Town?s procedures and policies to incorporate the requirements of Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.
FINDING 2022-006 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): S425D200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 26 METROPOLITAN SCHOOL DISTRICT OF WARREN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed nor implemented a system of internal controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) annual data reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, for two of ten key line items tested, the School Corporation could not provide supporting documentation. The lack of supporting documentation for the full-time equivalent (FTE) key line item on the ESSER I, Year 1 annual data report prevented the determination of the accuracy of the line items. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 1 report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." INDIANA STATE BOARD OF ACCOUNTS 27 METROPOLITAN SCHOOL DISTRICT OF WARREN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not developed nor implemented a system of internal controls that would have ensured compliance with the grant agreement and Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Subject: 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): S425D200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 26 METROPOLITAN SCHOOL DISTRICT OF WARREN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed nor implemented a system of internal controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) annual data reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, for two of ten key line items tested, the School Corporation could not provide supporting documentation. The lack of supporting documentation for the full-time equivalent (FTE) key line item on the ESSER I, Year 1 annual data report prevented the determination of the accuracy of the line items. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 1 report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." INDIANA STATE BOARD OF ACCOUNTS 27 METROPOLITAN SCHOOL DISTRICT OF WARREN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not developed nor implemented a system of internal controls that would have ensured compliance with the grant agreement and Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425C Federal Award Number and Year (or Other Identifying Number): S425C200018 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 19 LAKE STATION COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation completed three annual Elementary and Secondary School Emergency Relief (ESSER) and two Governor's Emergency Education Relief (GEER) annual Data Collection reports (Reports) during the audit period. Data on one report, the GEER I, Year 1 annual report, did not agree to unit's ledger. The expenditures reported on the GEER I, Year 1 annual report were $202,500; however, the School Corporation had no expenditures from the GEER fund during the year 1 reporting period. The lack of internal controls and noncompliance were isolated to the GEER I, Year 1 annual 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 Management had not established a system of internal controls that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. INDIANA STATE BOARD OF ACCOUNTS 20 LAKE STATION COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, COVID-19 - 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 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Department of Education (IDOE) based upon meals served for the month. All four Claims tested had differences between the Claims submitted and the School Corporation's summary meal count reports. Meal counts did not match the ledgers provided by the Food Management Service Company (FMSC) nor the internally generated reports of the School Corporation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 26 CENTRAL NOBLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.302(b) (Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting and 200.328 Monitoring and reporting program performance. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, COVID-19 - 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 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Department of Education (IDOE) based upon meals served for the month. All four Claims tested had differences between the Claims submitted and the School Corporation's summary meal count reports. Meal counts did not match the ledgers provided by the Food Management Service Company (FMSC) nor the internally generated reports of the School Corporation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 26 CENTRAL NOBLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.302(b) (Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting and 200.328 Monitoring and reporting program performance. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, COVID-19 - 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 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Department of Education (IDOE) based upon meals served for the month. All four Claims tested had differences between the Claims submitted and the School Corporation's summary meal count reports. Meal counts did not match the ledgers provided by the Food Management Service Company (FMSC) nor the internally generated reports of the School Corporation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 26 CENTRAL NOBLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.302(b) (Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting and 200.328 Monitoring and reporting program performance. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, COVID-19 - 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 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Department of Education (IDOE) based upon meals served for the month. All four Claims tested had differences between the Claims submitted and the School Corporation's summary meal count reports. Meal counts did not match the ledgers provided by the Food Management Service Company (FMSC) nor the internally generated reports of the School Corporation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 26 CENTRAL NOBLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.302(b) (Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting and 200.328 Monitoring and reporting program performance. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, COVID-19 - 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 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Department of Education (IDOE) based upon meals served for the month. All four Claims tested had differences between the Claims submitted and the School Corporation's summary meal count reports. Meal counts did not match the ledgers provided by the Food Management Service Company (FMSC) nor the internally generated reports of the School Corporation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 26 CENTRAL NOBLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.302(b) (Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting and 200.328 Monitoring and reporting program performance. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, COVID-19 - 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 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Monthly Sponsor Claims for Reimbursement (Claims) were submitted to the Indiana Department of Education (IDOE) based upon meals served for the month. All four Claims tested had differences between the Claims submitted and the School Corporation's summary meal count reports. Meal counts did not match the ledgers provided by the Food Management Service Company (FMSC) nor the internally generated reports of the School Corporation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 26 CENTRAL NOBLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.302(b) (Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting and 200.328 Monitoring and reporting program performance. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-005 Subject: Title I Grants to Local Educational Agencies - Reporting Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Number and Year (or Other Identifying Number): S010A200014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Total expenditures reported on the 2020-2021 Final Expenditure Report (Report) were not supported by the School Corporation's ledgers. Total expenditures on the Report were $578,452 whereas expenditures per the ledgers were $677,514. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 21 CONCORD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause Management had not developed a system of internal controls that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 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 An effective internal controls system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) annual Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, for one of seven key line items tested the School Corporation could not provide supporting documentation. The lack of supporting documentation for the full time equivalent(FTE) key line item on the ESSER I, Year 1, annual report prevented the determination of the accuracy of the line item. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER 1, Year 1 report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(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 Management had not developed or implemented a system of internal controls that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal controls system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.