Findings Citing § 200.303

FINDING 2025-004 Subject: Special Education Cluster (IDEA) - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-148-PN01, 23611-148-PN01, 24611-148-PN01, 25611-148-PN01, 22611-148-ARP, 22619-148-PN01, 23619-148-PN01, 24619-148-PN01, 25619-148-PN01, 22619-148-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls to ensure that proper documentation was retained for audit. A sample of 40 expenditures from the School Corporation's special education funds during the audit period was selected for testing. Of the sample, there were 5 transactions for which the School Corporation was unable to provide supporting documentation. As a result, 5 expenditures totaling $11,683 could not be verified as allowable activities or costs for the program. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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 the Federal awards that are renewed quarterly or annual, from the date of submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." INDIANA STATE BOARD OF ACCOUNTS 26 GRIFFITH PUBLIC SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 34 CFR 300.202(a) states: "General. Amounts provided to the LEA under Part B of the Act— (1) Must be expended in accordance with the applicable provisions of this part; (2) Must be used only to pay the excess costs of providing special education and related services to children with disabilities, consistent with paragraph (b) of this section; and (3) Must be used to supplement State, local, and other Federal funds and not to supplant those funds." 34 CFR 300.208 states: "(a) Uses. Notwithstanding §§ 300.202, 300.203(b), and 300.162(b), funds provided to an LEA under Part B of the Act may be used for the following activities: (1) Services and aids that also benefit nondisabled children. For the costs of special education and related services, and supplementary aids and services, provided in a regular class or other education-related setting to a child with a disability in accordance with the IEP of the child, even if one or more nondisabled children benefit from these services. (2) Early intervening services. To develop and implement coordinated, early intervening educational services in accordance with § 300.226. (3) High cost special education and related services. To establish and implement cost or risk sharing funds, consortia, or cooperatives for the LEA itself, or for LEAs working in a consortium of which the LEA is a part, to pay for high cost special education and related services. (b) Administrative case management. An LEA may use funds received under Part B of the Act to purchase appropriate technology for recordkeeping, data collection, and related case management activities of teachers and related services personnel providing services described in the IEP of children with disabilities, that is needed for the implementation of those case management activities." 34 CFR 300.800 states: "The Secretary provides grants under section 619 of the Act to assist States to provide special education and related services in accordance with Part B of the Act— (a) To children with disabilities aged three through five years; and (b) At a State's discretion, to two-year-old children with disabilities who will turn three during the school year." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: INDIANA STATE BOARD OF ACCOUNTS 27 GRIFFITH PUBLIC SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." Cause Due to turnover of staffing in the School Corporation's administrative office, an effective system of internal controls was not established that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect Without a proper system of internal controls in place that operated effectively, the School Corporation did not retain and provide appropriate supporting documentation. This prevented the determination of the School Corporation's compliance with the compliance requirements listed above. Questioned Costs We identified $11,683 in known questioned costs as noted above in the Condition and Context. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure documentation to support all grant expenditures will be maintained and made available for audit as related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-005 Subject: Special Education Cluster (IDEA)- Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-148-PN01, 23611-148-PN01, 24611-148-PN01, 25611-148-PN01, 22611-148-ARP, 22619-148-PN01, 23619-148-PN01, 24619-148-PN01, 25619-148-PN01, 22619-148-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 28 GRIFFITH PUBLIC SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to the Procurement and Suspension and Debarment compliance requirement. Procurement - Micro-Purchases Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the micro-purchase threshold, which is set at $10,000. Micro-purchases may be awarded without soliciting competitive price rate quotations. Three vendors determined to fall under the micro-purchase threshold were selected for testing. One claim from one of the vendors selected for testing did not have proper supporting documentation maintained by the School Corporation to determine if the proper procurement method was followed. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAM exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. One vendor provided contracted services paid with special education grant funds during the audit period totaling $269,948. Upon inquiry of the School Corporation, it was determined that the School Corporation did not verify that the contractor was not suspended or debarred or otherwise excluded. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 29 GRIFFITH PUBLIC SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (1) Micro-purchases — (i) Distribution. The acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (See the definition of micro-purchase in § 200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. (ii) Micro-purchase awards. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micropurchases if procedures are documented and approved by the non-Federal entity. (iii) Micro-purchase thresholds. The non-Federal entity is responsible for determining and documenting an appropriate micro-purchase threshold based on internal controls, an evaluation of risk, and its documented procurement procedures. The micropurchase threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations. Non-Federal entities may establish a threshold higher than the Federal threshold established in the Federal Acquisition Regulations (FAR) in accordance with paragraphs (a)(1)(iv) and (v) of this section. INDIANA STATE BOARD OF ACCOUNTS 30 GRIFFITH PUBLIC SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iv) Non-Federal entity increase to the micro-purchase threshold up to $50,000. Non-Federal entities may establish a threshold higher than the micro-purchase threshold identified in the FAR in accordance with the requirements of this section. The non-Federal entity may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the Federal awarding agency and auditors in accordance with § 200.334. The self-certification must include a justification, clear identification of the threshold, and supporting documentation of any of the following: (A) A qualification as a low-risk auditee, in accordance with the criteria in § 200.520 for the most recent audit; (B) An annual internal institutional risk assessment to identify, mitigate, and manage financial risks; or, (C) For public institutions, a higher threshold consistent with State law. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to affect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, procurement procedures for goods and services were not adhered to, and vendors to whom payments equal to, or in excess of $25,000, were not verified to not be suspended, debarred, or otherwise excluded. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 31 GRIFFITH PUBLIC SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services and contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-006 Subject: Special Education Cluster (IDEA) - Period of Performance Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-148-PN01, 22611-148-ARP, 22619-148-PN01, 22619-148-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Period of Performance Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls to ensure transactions made with the special education grant funding occurred within the appropriate period of performance. Claims for the special education programs were paid without an appropriate level of review or oversight to ensure the expenditures charged to each grant were within the allowed time frame. Although the reimbursement requests submitted to the Indiana Department of Education were prepared and approved by two different employees, the School Corporation was unable to provide evidence of this review and approval process, which may have included a review of the costs included on each request to verify they were within the correct period of performance. Reimbursement requests lacked supporting documentation of the disbursements for the Special Education Grant. Detailed reports were not retained by the School Corporation to verify the vendor, payroll, and payroll benefits occurred during the period of performance. Due to comingling of funds, a total of $176,037 of disbursements charged to the 5200 IDEA Special Education Grant fund could not be directly tied to grant awards (22611-148-PN01, 22611-148-ARP, 22619-148-PN01, and 22619-148-ARP) to determine if these disbursements were in the allowed period of performance of each grant award. The lack of internal controls and noncompliance was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 32 GRIFFITH PUBLIC SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.1 states in part: ". . . Financial obligations, when referencing a recipient's or subrecipient's use of funds under a Federal award, means orders placed for property and services, contracts and subawards made, and similar transactions that require payment. . . . Period of performance means the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Identification of the period of performance in the Federal award per § 200.211(b)(5) does not commit the awarding agency to fund the award beyond the currently approved budget period. . . . Unliquidated financial obligations means, for financial reports prepared on a cash basis, financial obligations incurred by the non-Federal entity that have not been paid (liquidated). . . ." 2 CFR 200.309 states: "If a Federal awarding agency or pass-through entity approves an extension, or if a recipient extends under § 200.308(e)(2), the Period of Performance will be amended to end at the completion of the extension. If termination occurs, the Period of Performance will be amended to end upon the effective date of termination. If a renewal award is issued, a distinct Period of Performance will begin." Cause Due to turnover of staffing in both the Special Education personnel and the School Corporation's administrative office, the School Corporation's management had not developed nor implemented a system of internal controls that would have ensured compliance with the grant agreements and the Period of Performance compliance requirement. The School Corporation had not filed reimbursement requests in a timely manner. Effect The failure to establish an effective system of internal controls placed the School Corporation at risk of noncompliance with the grant agreement and the Period of Performance compliance requirement. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs We identified $176,037 in known questioned costs as noted above in the Condition and Context. INDIANA STATE BOARD OF ACCOUNTS 33 GRIFFITH PUBLIC SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that the School Corporation's management establish a system of internal controls, which includes ensuring grant expenditures are obligated and liquidated timely to ensure compliance with the grant agreement and the Period of Performance 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 2025-007 Subject: Special Education Cluster (IDEA) - Earmarking and Level of Effort Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Assistance Listings Numbers: 84.027, 84.027X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-148-ARP, 23611-148-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, and Earmarking 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 Matching, Level of Effort, Earmarking compliance requirement. Earmarking The nonpublic proportionate share of expenditures for the 22611-148-ARP and 23611-148-PN01 grant awards could not be verified for proper classification and did not meet the proportionate share requirement. The 22611-148-ARP and 23611-148-PN01 grant awards did not meet the minimum nonpublic proportionate share of expenditures by $457 and $38,859, respectively. Level of Effort - Maintenance of Effort Maintenance of Effort is a district-level test that determines whether the School Corporation is providing a consistent level of financial support to public schools from year to year. This rule ensures that the School Corporation does not use Special Education funds to shore up reductions in state and local support for public education. The Indiana Department of Education (IDOE) performs the maintenance of effort calculation utilizing Form 9 information provided by the School Corporation from the prior year. As such, the amounts submitted to the IDOE in the prior year to be used in the computation are tested to ensure they were recorded properly in the School Corporation's records as to the account or object code. In fiscal year 2023-2024, 40 transactions were tested to ensure the disbursements were posted to the proper account and object code. For 21 of the 40 transactions selected in 2023-2024, appropriate supporting documentation was not provided for audit. As a result, 21 disbursements could not be verified as to whether they were posted to the proper account or object code. INDIANA STATE BOARD OF ACCOUNTS 34 GRIFFITH PUBLIC SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) In addition, 25 disbursement line items were sampled from the IDOE Form 9 for 2023-2024 to ensure the amounts agreed to the ledger. One disbursement line item for 2023-2024 could not be traced to the ledger. Therefore, we were unable to determine if the disbursement line item was posted to the proper account or object code. The lack of internal controls and noncompliance were isolated instances to 2023-2024. 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 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." Cause Due to turnover of staffing in both the special education personnel and the School Corporation's administrative office along, with recordkeeping issues, the School Corporation's management had not developed a system of internal controls that would have ensured compliance. The School Corporation also did not ensure that supporting documentation would have been maintained and made available for audit, as related to the Matching, Level of Effort, Earmarking compliance requirement. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation cannot ensure compliance with the level of effort - maintenance of effort and earmarking requirements. As a result, amounts reported to the oversight agency were not accurately reported. INDIANA STATE BOARD OF ACCOUNTS 35 GRIFFITH PUBLIC 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 a proper system of internal controls and develop policies and procedures to ensure the required nonpublic proportionate share funds are spent. In addition, proper recordkeeping should be maintained to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-008 Subject: Title I Grants to Local Educational Agencies - Internal Controls Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A220014, S010A230014, S010A240014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Significant Deficiency Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-006. Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. Data from the School Corporation's student software system was uploaded to the Indiana Department of Education's (IDOE) Data Exchange System. Enrollment and poverty information for the School Corporation was then abstracted by the IDOE from the Data Exchange System into the Title I application. The School Corporation had not designed or implemented an oversight or review process to ensure that the data was accurately uploaded by the IDOE into the Title I application. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 36 GRIFFITH PUBLIC SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls was not designed by management of the School Corporation which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place to ensure compliance. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-009 Subject: Title I Grants to Local Educational Agencies - Earmarking Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Significant Deficiency, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-008. INDIANA STATE BOARD OF ACCOUNTS 37 GRIFFITH PUBLIC SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. A portion of the School Corporation's Title I allocation was required to be set aside for parental involvement and homeless reservation. The required amount to be set aside was indicated in the Title I grant application. The School Corporation is responsible for monitoring each required set aside throughout the life of the grant to ensure the obligation is met. There was no oversight or review process in place to ensure monitoring of each required set aside. The School Corporation did not provide documentation to show that the obligation was met, or not met, for parental involvement or to service all the homeless students in the School Corporation and did not transfer the unused funds to the next grant award. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 20 USC 6313(c)(3)(A) states: "A local educational agency shall reserve such funds as are necessary under this part, determined in accordance with subparagraphs (B) and (C), to provide services comparable to those provided to children in schools funded under this part to serve - (i) homeless children and youths, including providing educationally related support services to children in shelters and other locations where children may live; (ii) children in local institutions for neglected children; and (iii) if appropriate, children in local institutions for delinquent children, and neglected or delinquent children in community day programs." Cause Due to turnover of staffing in the School Corporation's administrative office and recordkeeping issues, the School Corporation's management had not developed a system of internal controls that would have ensured compliance or that supporting documentation would have been maintained and made available for audit, as related to the Matching, Level of Effort, Earmarking compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 38 GRIFFITH PUBLIC SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, proper documentation was not maintained to ensure the obligation to provide parental involvement and service homeless students was met or unmet. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place to ensure compliance. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-010 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425U Federal Award Number and Year (or Other Identifying Number): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed a system of internal controls to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation prepared a fixed asset report that contained all inventory and assets purchased that exceeded the School Corporation's capitalization threshold through June 30, 2025. The School Corporation did not have any policies or procedures in place to ensure the listing was complete and contained all the required information nor was there any documentation that a physical inventory was completed every two years as required by Indiana Code. The School Corporation had the following required information missing from the details of capital assets: source of funding for the property, acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, use and condition of the property, and disposition data. In addition, assets were not properly safeguarded and maintained. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 39 GRIFFITH PUBLIC SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause The vendor the School Corporation contracts with did not complete the fixed asset detail report due to being behind schedule. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, not all assets purchased, in whole or in part with federal dollars, were added to the capital asset listing. In addition, the assets added to the capital asset listing did not include all required information. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 40 GRIFFITH PUBLIC SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties, to ensure an asset inventory is performed at least every two years. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-003 Subject: Child Nutrition Cluster - Eligibility and Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2024, FY2025 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Eligibility, Reporting Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-002. Condition and Context Eligibility The School Corporation had not established effective internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance related to the eligibility determination of a child receiving meals. Any child enrolled in a participating school or summer camp, or attending a SFSP meal service site, who meets the applicable program's definition of "child," may receive meals under the applicable program. In the case of the National School Lunch Program and School Breakfast Program, children belonging to households meeting nationwide income eligibility requirements may receive meals at no charge or at reduced price. Children who have been determined ineligible for free or reduced-price school meals pay the full price, set by the School Food Authority, for their meals. Children attending SFSP meal service sites receive their meals at no charge. As a general rule, a child's eligibility for free or reduced price meals under a Child Nutrition Cluster program may be established by the submission of an annual application or statement which furnishes such information as family income and family size. Local educational agencies, institutions, and sponsors then determine eligibility by comparing the data reported by the child's household to published income eligibility guidelines. Additionally, a child may be direct certified. For a direct certification, annual eligibility determinations are based on the child's household receiving benefits under SNAP, FDPIR, the Head Start Program (ALN 93.600), or, under most circumstances, the TANF program (ALN 93.558). A household may furnish documentation of its participation in one of these programs; or the school, institution, or sponsor may obtain the information directly from the State or local agency that administers these programs. Certain foster, runaway, homeless, and migrant children are categorically eligible for free school lunches and breakfasts. Direct certified households do not need to complete an application. The School Corporation's process was for the Food Service Director to review the eligibility determination determined by the software system, to ensure its accuracy, prior to notifying the family of the student's eligibility status. The parameters used by the School Corporation's software system were automatically pulled in from the USDA website but were not reviewed by the School Corporation to validate that the parameters were correct. INDIANA STATE BOARD OF ACCOUNTS 18 OAK HILL UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Additionally, student determinations made through direct certification comprised the majority of eligible students and there was no identified internal control over this process. Reporting The School Corporation had not established effective internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance related to the accurate reporting of program operations to the Indiana Department of Education (IDOE). School Food Authorities (SFAs) and sponsors must submit monthly claims for reimbursement for meals and snacks served to eligible students within 60 days following the last day of the month covered by the claim. The School Corporation submitted claims timely and had designed an internal control involving a review performed by the Chief Financial and Business Officer after submission of the claim by the Food Service Director. However, documentation evidencing the implementation of this review process could not be provided. The lack of internal controls was systemic 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). . . ." 7 CFR 245.3(b) states in part: "Each participating local educational agency and all participating schools under its jurisdiction must adhere to the eligibility criteria specified in this part. . . ." Cause A proper system of internal controls was not designed and implemented by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. INDIANA STATE BOARD OF ACCOUNTS 19 OAK HILL UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure student eligibility for free or reduced price lunches is accurately determined and SFA monthly claims submitted to the IDOE are reviewed for accuracy. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-004 Subject: Special Education Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Program: COVID-19 - Special Education Grants to States Assistance Listings Number: 84.027X Federal Award Number and Year (or Other Identifying Number): 22611-019-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Significant Deficiency, Other Matters Condition and Context Procurement Small purchases, procurements between $50,000 and $150,000, require three quotes to be obtained and a contract awarded. There was one disbursement tested for $52,598 for small purchase procurement, and, while the appropriate number of quotes were obtained, a contract was not awarded for the transaction as required by Indiana Code 5-22-8-3. Suspension and Debarment Prior to entering into subawards and covered transactions with the Special Education Cluster (IDEA) award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the System for Award Management (SAM) Excluded Parties List System (EPLS), collecting a certification from that person or entity, or adding a clause or condition to the covered transaction with that person or entity. It was determined that the School Corporation had a process in place to verify that vendors were not suspended or debarred, but the process was not operating effectively. For the one vendor tested also related to the transaction noted above, documentation of the SAM.gov search could not be provided. INDIANA STATE BOARD OF ACCOUNTS 20 OAK HILL UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls and noncompliance were isolated to the transaction and award number noted above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.214 states: "Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . INDIANA STATE BOARD OF ACCOUNTS 21 OAK HILL UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (2) Small purchases— (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states: "(a) This section applies only if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000). (b) A purchasing agent may purchase supplies under this section by inviting quotes from at least three (3) persons known to deal in the lines or classes of supplies to be purchased. (c) The purchasing agent shall mail an invitation to quote to the persons described in subsection (b) at least seven (7) days before the time fixed for receiving quotes. (d) If the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required. (e) The purchasing agent may reject all quotes. (f) If the purchasing agent does not receive a quote from a responsible and responsive offeror, the purchasing agent may purchase the supplies under IC 5-22-10-10." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you do business is not excluded or disqualified. You do this by: (a) Checking the EPLS, or (b) Collecting a certification from that person if allowed by this rule, or (c) Adding a clause or condition to the covered transaction with that person." Cause The School Corporation was not aware of the Indiana Code requirement to enter into a contract for the equipment purchase. The School Corporation was aware of the requirements to check for suspension and debarment, but due to newer personnel at the School Corporation they were not able to locate the records or verify that the suspension and debarment verification was performed. INDIANA STATE BOARD OF ACCOUNTS 22 OAK HILL UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to design and implement an effective internal control system enabled noncompliance to remain undetected. Noncompliance with the provisions of federal statutes, regulations, and terms and conditions of the federal award could result in the reduction of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation amend its procurement policy and system of internal controls to ensure that procurement requirements meet the stricter federal and/or state requirements. Additionally, the internal control system effectiveness should be improved to ensure all contractors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into contracts. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-002 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425D Federal Award Number and Year (or Other Identifying Number): S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 17 PENN-HARRIS-MADISON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-004. Condition and Context The Elementary and Secondary School Emergency Relief (ESSER) Fund provided funding to states and school districts to combat the effects of the coronavirus pandemic, help safely reopen and sustain the safe operation of schools, and to address the impact of the coronavirus pandemic on the nation's students. States were required to subgrant a portion of its ESSER allocation to local educational agencies (LEA). Prior to the LEAs receiving their respective subgrants, the LEAs were required to complete an application for ESSER funding, which was submitted to the Indiana Department of Education, the passthrough entity, for approval. The application included a district level budget identifying how the LEA intended to spend program funds. Per the School Corporation's approved application, program funding was budgeted for salaries and respective benefits, counseling services, and supplies. An effective internal control system was not in place at the School Corporation over adjustments into the ESSER II (CRRSA) fund to ensure compliance with requirement related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. The School Corporation transferred a total of $273,534 of expenditures made up of vendor, payroll, and related benefit payments into grant funds; however, adequate supporting documentation was not provided to determine where the expenditures were originally paid, to whom the original payment was made, and at what amount the original payment was made. The $273,534 was determined to be questioned costs. As a result, the School Corporation was unable to verify the total expenditures requested for reimbursement for the COVID-19 - Education Stabilization Fund grant. The School Corporation requested $273,534, which resulted in an over reimbursement for the COVID-19 - Education Stabilization Fund grant. The lack of internal controls and supporting documentation was isolated to the adjustments noted above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: INDIANA STATE BOARD OF ACCOUNTS 18 PENN-HARRIS-MADISON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 34 CFR 76.700 states: "A State and a subgrantee shall comply with § 76.500, the State plan, applicable statutes, regulations, and approved applications, and shall use Federal funds in accordance with those statutes, regulations, plan, and applications." Indiana Department of Education ESSER III Application Walk Through states in part: ". . . Please budget the appropriate items in the district budget. Be sure to include all requested items or activities in the budgeted total and include sufficient detail in the narrative boxes below. Be sure to provide sufficient detail for IDOE to determine the reasonableness, allowability, and necessity of the proposed activity. You may include additional documentation in the Attachments section of the Summary Page. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation for adjustments. Additionally, proper documentation was not maintained to support adjustments. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Additionally, without maintaining proper supporting documentation it is not possible to determine if the underlying costs are an allowable cost to the federal program. As a result, costs were reimbursed that did not have adequate documentation to ensure compliance with the compliance requirement. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs We identified $273,534 in known questioned costs as noted above in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure costs and adjustments are adequately documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Criteria or Specific Requirement: Per 2 CFR 200.303 - Internal Controls and the OMB Compliance Supplement: Education Stabilization Fund, Reporting - The District is required to have internal controls, including segregation of duties, over reporting of quarterly expenditure reports. Condition: The same individual is responsible for preparing and submitting quarterly expenditure reports for the Education Stabilization Fund without an independent review or approval prior to submission. Questioned Costs: This condition resulted in no identified questioned costs. Context: Currently, one individual is responsible by preparing and submitting the quarterly expenditure reports. Effect: Quarterly expenditure reports could be submitted to the Illinois State Board of Education that do not accurately reflect the expenditures disbursed from the grant during the period. Consequently, the District could be over- or under- reimbursed by this grant program. Cause: Absence of formal internal control procedures resulted in one person performing all reporting functions. Recommendation: Implement segregation of duties by requiring one person to prepare the monthly claim and a second person (e.g., supervisor) to review and approve the claim. The review should be supported with signatures or electronic approval logs. Management's Response: Managaement agrees with the finding and will implement a corrective action plan to remedy the control deficiency.

FINDING 2025-001 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States Assistance Listings Numbers: 84.027, 84.027X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-164-ARP, 23611-164-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 13 SUNMAN-DEARBORN COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAM exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Upon inquiry of the School Corporation, it was determined that the School Corporation did not have policies and procedures in place to ensure vendors were not suspended or debarred. A population of three covered transactions for goods or services that equaled or exceeded $25,000 paid from special education federal grant funds during the audit period was identified. For two of the three transactions, the School Corporation did not verify the vendors' suspension and debarment status prior to payment. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. 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 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Officials were not aware of the need to follow federal guidelines for suspension and debarment for expenditures associated with the Special Education Cluster awards. INDIANA STATE BOARD OF ACCOUNTS 14 SUNMAN-DEARBORN COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the grant agreement and the 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 management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-002 Subject: Child Nutrition Cluster - Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years ( or Other Identifying Numbers): 2023-2024, 2024-2025 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-004. Condition and Context Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods or services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. Verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties that would likely be effective in preventing, or detecting and correcting, noncompliance. During the period audited, covered transactions in the amount of $76,353 were made during the audit period to one vendor. The School Corporation checked the EPLS; however, there was not a review system in place to ensure the verification was completed and accurate. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not established a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-003 Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirement Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers) : S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Other Matters Condition and Context Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. INDIANA STATE BOARD OF ACCOUNTS 17 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation had not designed nor implemented a system of internal controls to ensure that construction contracts in excess of $2,000 paid from federal grant funds included a prevailing wage rate clause. One contractor, with a construction contract in excess of $2,000, was identified during the audit period. The contract did not include the required wage rate clause; however, certified payrolls were submitted by the contractor for the contract. The total dollar value of that construction contract was $152,964. 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). . . ." 29 CFR 5.5 states in part: "(a) Required contract clauses. The Agency head will cause or require the contracting officer to require the contracting officer to [sic] insert in full, or (for contracts covered by the Federal Acquisition Regulation (48 CFR chapter 1)) by reference, in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the laws referenced by § 5.1, the following clauses. . . . (1) Minimum wages— (i) Wage rates and fringe benefits. All laborers and mechanics employed or working upon the site of the work (or otherwise working in construction or development of the project under a development statute), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of basic hourly wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (3) Records and certified payrolls— . . . (ii) Certified payroll requirements— INDIANA STATE BOARD OF ACCOUNTS 18 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (A) Frequency and method of submission. The contractor or subcontractor must submit weekly, for each week in which any DBA- or Related Acts-covered work is performed, certified payrolls to the [write in name of appropriate Federal agency] if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the certified payrolls to the applicant, sponsor, owner, or other entity, as the case may be, that maintains such records, for transmission to the [write in name of agency]" 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, 'Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction'). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. The School Corporation was not aware of the requirements for wage rate requirements. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, wage rate requirements were not properly followed by the School Corporation. Noncompliance with the grant agreement and the 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 and include the wage rate requirement clause in construction contracts. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Criteria According to 34 CFR Section 685.309, under the Federal Direct loan program, institutions must complete and return the Enrollment Reporting roster file via NSLDS within 15 days of receipt. Enrollment information must be reported within 30 days whenever attendance changes for students, unless a roster will be submitted within 60 days. An institution must notify the Secretary of Education if it discovers that a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended. The Department of Education lists several certification methods for enrollment reporting, including certifying directly through the NSLDS web site, certifying through the NLSDS’s batch enrollment reporting process, or through certification of rosters provided to the National Student Clearinghouse (NSC). Per 2 CFR 200.303, a non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and terms and conditions of the federal award. Condition Found The University generally certifies its enrollment reports through rosters provided to the NSC. Of the forty (40) students with enrollment changes selected for testwork, we noted thirty-four (34) students whose changes in enrollment status were not transmitted to NSLDS within the required timeframe. For these students the students’ enrollment status changed from full-time to graduated in May 2025, when the students graduated. Accordingly, the status change should have been transmitted after the spring semester, within 60 days of being notified of the change. However, the University did not report status change until 79 days after the school became aware of the status change. Cause The University did not configure its file for submission to NSC correctly and therefore the submission was not properly processed by NSC and transmitted to NSLDS timely. The University did not have a control in place to monitor and verify that files sent to NSC were appropriately and timely transmitted to NSLDS. Possible Asserted Effect Inaccurate and delayed submission of student enrollment status information affects the determinations that lenders and servicers of student loans make related to in-school status, deferments, grace periods, and repayment schedules, as well as the federal government's payment of interest subsidies. Questioned Costs No questioned costs identified. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding This was not a finding in the prior year. Recommendation We recommend that the University review its internal processes and controls to ensure that any enrollment changes are reported within the required 30 or 60 day time frame, including determining that changes submitted to NSC are timely and accurately transmitted to NSLDS. View of University Officials The University agrees with this finding. Upon identification of the configuration error, the University corrected its NSC file submission settings to ensure enrollment status changes are properly processed and transmitted to NSLDS. Additionally, effective immediately, the University has implemented a new monitoring control whereby an employee independent of the enrollment reporting function performs a review of NSLDS to verify that data submitted through NSC has been accurately and timely transmitted in accordance with required timeframes. This control is designed to provide timely detection of any future transmission failures and ensure corrective action is taken within the required reporting windows.

FINDING 2025-004 – Payroll Allocations Federal Program: Continuum of Care Program Federal Identifying Number: Direct funding grants - IL0395L5T102214, IL0395L5T102315, IL0184L5T102316, IL0184L5T102417, IL1790H5T102200, IL1791H5T102200, IL1792H5T102200; Passed- through grants -IL1759D5T102201, IL1878D5T102300, IL1759D5T102202, and 8567-D Federal Assistance Listing Number: 14.267 Passed Through: All Chicago Making Homeless History and Aids Foundation of Chicago Federal Agency: U.S. Department of Housing and Urban Development Criteria/Specific Requirement: A. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) require Inner Voice, Inc. to ensure federal expenditures to be consistent with the standards set forth in the Uniform Guidance at 2 CFR part 200, subpart E. B. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.430(g)(1)(i) Standards for Documentation of Personnel Expenses states the following, “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. C. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 Internal Controls states the following, “The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: Our audit procedures over expenditures revealed the following: 1) For one (1) of forty (40) expenditure transactions tested, The Inner Voice, Inc. did not adequately track or review time and effort documentation for accuracy. For this selection, the time study applied to allocate salary and actual hours reported and paid did not agree. Questioned Costs: None. Context: The Inner Voice, Inc. expended a total of $5,207,762 of federal awards in fiscal year 2025. The Inner Voice, Inc. expended a total of $3,992,341 of federal awards in fiscal year 2025 under the Continuum of Care program. Effect: The Inner Voice, Inc. is not in compliance with Title 2 of the Code of Federal Regulations (CFR) Part 200.426 as it relates to activities allowed or unallowed and allowable costs/cost principles requirements. Additionally, the effect of noncompliance can result in questioned costs. Cause: The Inner Voice, Inc.’s implementation of internal controls is inconsistent in the 1) review of time study against payment and 2) review and approval of payroll salaries transactions. Recommendation: We recommend that The Inner Voice, Inc. establish and maintain effective internal control over federal awards to ensure expenditures are supported as required by 2 CFR 200.430(g)(1)(i). This includes: a. Conducting a formal time and effort study to support payroll allocations; b. Enhancing policies and procedures surrounding time and effort documentation and review and approval of payroll expenditures. Management’s Response: See Corrective Action Plan.

FINDING 2025-005 – Procurement, Suspension and Debarment (Partially Repeated from Prior Year Finding 2024-002) Federal Program: Continuum of Care Program Federal Identifying Number: Direct funding grants - IL0395L5T102214, IL0395L5T102315, IL0184L5T102316, IL0184L5T102417, IL1790H5T102200, IL1791H5T102200, IL1792H5T102200; Passed- through grants -IL1759D5T102201, IL1878D5T102300, IL1759D5T102202, and 8567-D Federal Assistance Listing Number: 14.267 Passed Through: All Chicago Making Homeless History and Aids Foundation of Chicago Federal Agency: U.S. Department of Housing and Urban Development Criteria/Specific Requirement: A. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.318(a) General Procurement Standards states the following, “Documented procurement procedures. The recipient or subrecipient must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services.” B. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.319 Competition states the following, “All procurement transactions under the Federal award must be conducted in a manner that provides for full and open competition and is consistent with the standards of this section and §200.320.” C. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 180.300 states a participant entering into a covered transaction must verify that the person with whom it intends to do business is not excluded or disqualified by: a. Checking SAM Exclusions; or b. Collecting a certification from that person; or c. Adding a clause or condition to the covered transaction with that person. D. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 Internal Controls states the following, “The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: For fourteen (14) out of fourteen (14) procurement and suspension and debarment transactions tested we noted the following: 1) The Inner Voice, Inc. did not complete the appropriate procurement process; 2) The Inner Voice, Inc. did not maintain appropriate documentation to support the procurement method utilized (if any); and 3) The Inner Voice, Inc. did not provide or maintain documentation that suspension and debarment searches were performed. Questioned Costs: None. Context: The Inner Voice, Inc. expended a total of $5,207,762 of federal awards in fiscal year 2025. The Inner Voice, Inc. expended a total of $3,992,341 of federal awards in fiscal year 2025 under the Continuum of Care program. The procurement, suspension and debarment transactions we selected for testing totaled $1,180,252 or 29.6% percent of program expenditures. Effect: The Inner Voice, Inc. is not in compliance with Title 2 of the Code of Federal Regulations (CFR) Part 200 as it relates to procurement, suspension and debarment requirements. Additionally, the effect of noncompliance can result in questioned costs. Cause: 1. The Inner Voice, Inc.’s procurement policy provides limited guidance on procurement methods, documentation of procurement process, and references to Uniform Guidance procurement categories and definitions. Additionally, policy does not include processes pertaining to suspension and debarment checks. 2. Where policies are in place, they are not being followed. Recommendation: We recommend that The Inner Voice, Inc.: a. Enhance policies and procedures surrounding procurement, suspension and debarment. b. Communicate and reinforce its policies and procedures to ensure compliance with applicable requirements. Management’s Response: See Corrective Action Plan.

FINDING 2025-003 Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, Fresh Fruit and Vegetable Program Assistance Listings Numbers: 10.553, 10.555, 10.559, 10.582 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2023-2024, FY 2024-2025 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Eligibility, Procurement and Suspension and Debarment, Reporting Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the immediately prior audit regarding internal controls over eligibility and suspension and debarment. The prior audit finding number was 2023-003. Condition and Context The School Corporation had not properly designed or implemented an effective system of internal controls, which would have included segregation of duties, that would have likely been effective in preventing, or detecting and correcting, material noncompliance. INDIANA STATE BOARD OF ACCOUNTS 20 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Eligibility Any child enrolled in a participating school or summer camp, who meets the applicable program's definition of "child," may receive meals under applicable programs. A child belonging to households meeting nationwide income eligibility requirements may receive meals at no charge or at a reduced price. Children that have been determined ineligible for free or reduced-price meals pay the full price for their meals. A child's eligibility for free and reducedpriced meals under a Child Nutrition Cluster program may be established by the submission of an annual application or statement which furnished such information as family income and family size. The School Corporation determines eligibility by comparing the data reported by the child's household to published income eligibility guidelines. Annual eligibility determinations may also be based on the child's household receiving benefits under SNAP, FDPIR, the Head Start Program, or, under most circumstances, the TANF program. A household may furnish documentation of its participation in one of those programs, or the School Corporation may obtain the information directly from the State or local agency that administers those programs. Certain foster, runaway, homeless, and migrant children are categorically eligible for free school lunches and breakfasts. Direct certified households do not need to complete an application. The School Corporation utilized a software vendor to determine eligibility based on free and reduced applications submitted online by parents. The income guidelines were updated in the software by one employee without an oversight or review process in place to ensure accuracy. Additionally, one employee uploaded the Direct Certification reports from the state into the software system without a documented oversight or review process in place to ensure directlycertified students were properly processed. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. The School Corporation did not have internal controls in place over suspension and debarment. The Food Service Director verified that vendors were not suspended or debarred, but there was no evidence of a second review. Reporting School Food Authorities (SFAs) and sponsors must submit monthly claims for reimbursement for meals and snacks served to eligible students within 60 days following the last day of the month covered by the claim. The School Corporation did not have internal controls in place over reporting. The Food Service Director submitted the monthly claims for reimbursement, but there was no evidence of a second review of these claims. The lack of internal controls over eligibility was isolated to fiscal year 2023-2024. The lack of internal controls over suspension and debarment and reporting was systemic throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 21 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause The Food Service Manager was unaware of the need for internal controls. This was due to turnover issues with the management of the School Corporation. The Treasurer had not communicated this need to the Food Service Manager. Therefore, a proper system of internal controls was not designed or implemented by management of the School Corporation, which would have included segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system was not capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-004 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, Fresh Fruit and Vegetable Program Assistance Listings Numbers: 10.553, 10.555, 10.559, 10.582 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2023-2024, FY 2024-2025 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not designed or implemented a system of internal controls, which would have included appropriate segregation of duties, that would have likely been effective in preventing, or detecting and correcting, noncompliance. The School Corporation transferred $313,369 from the School Lunch fund into the Operations fund. This transfer was labeled as an indirect cost transfer; however, indirect costs were not approved to be charged to the program. This transfer was also not approved by the School Board. The issue was identified and corrected by the current Treasurer prior to June 30, 2025. The lack of internal controls and noncompliance over allowable activities was an isolated instance. Criteria 2 CFR 200.302 states in part: "(a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other 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. . . . (b) The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. INDIANA STATE BOARD OF ACCOUNTS 23 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (4) Effective control over, and accountability for, all funds, property, and other assets. . . ." 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 200.400 states in part: "The application of these cost principles is based on the fundamental premises that: (a) The non-Federal entity is responsible for the efficient and effective administration of the Federal award through the application of sound management practices. (b) The non-Federal entity assumes responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. (c) The non-Federal entity, in recognition of its own unique combination of staff, facilities, and experience, has the primary responsibility for employing whatever form of sound organization and management techniques may be necessary in order to assure proper and efficient administration of the Federal award. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented. . . ." 2 CFR 200.404 states in part: "A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non- Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: . . . (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award's cost." INDIANA STATE BOARD OF ACCOUNTS 24 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.508 states in part: "The auditee must: . . . (d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and any other information as needed for the auditor to perform the audit required by this part." Federal Register, Vol. 87, No. 18 states in part: "Treasury has divided the Restriction on Use section into . . . (B) other restrictions on use, which include (1) debt service and replenishing reserves, (2) settlements and judgements, and (3) general restrictions. These restrictions apply to all eligible use categories. . . ." Cause The School Corporation had not developed a system of internal controls that would have ensured that all activities and costs were in compliance with the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system was not capable of effectively preventing, or detecting and correcting, noncompliance as identified in the Condition and Context. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure all activities are allowable. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-005 Subject: Child Nutrition Cluster - Special Tests and Provisions - School Food Accounts Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, Fresh Fruit and Vegetable Program Assistance Listings Numbers: 10.553, 10.555, 10.559, 10.582 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2023-2024, FY 2024-2025 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - School Food Accounts Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 25 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not designed or implemented a system of internal controls, which would have included appropriate segregation of duties, that would have likely been effective in preventing, or detecting and correcting, noncompliance. One of the three monthly reimbursement claims tested was receipted into the School Lunch fund twice. The issue was identified and corrected by the current Treasurer prior to June 30, 2025. The lack of internal controls and noncompliance over special tests and provisions - school food accounts is an isolated instance. 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: . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." Cause The School Corporation had not developed a system of internal controls that would have ensured that monthly reimbursements were properly credited to the School Food Account. Effect The lack of internal controls prevented the School Corporation's compliance with the Special Tests and Provisions - School Food Accounts compliance requirement and inaccurate crediting of the School Lunch fund as detailed in the Condition and Context. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 26 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure all reimbursements are properly credited to the School Lunch fund. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-006 Subject: Title I Grants to Local Educational Agencies - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation did not have effective internal controls in place to ensure all costs paid from Title I funds and submitted for reimbursement were for allowable activities or allowable costs. As a result, the following compliance issues were noted:  On May 26, 2023, a check for $886 was issued for which supporting documentation could not be provided. As a result, it could not be determined if the expense was for an allowable activity or an allowable cost.  On August 16, 2024, seven stipends were paid to non-Title I administrative staff from Title I grant funds. Two employees received $5,000 each and five employees received $3,000 each.  On December 20, 2024, three stipends for $918 each were paid from Title I grant funds to employees who had previously received a stipend payment on August 16, 2024. These stipends were determined to not be an allowable activity or an allowable cost. The current Treasurer identified the stipend errors. The School Corporation requested and received reimbursement from the seven employees who received these stipends. INDIANA STATE BOARD OF ACCOUNTS 27 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.302 states in part: "(a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other 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. . . . (b) The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. (4) Effective control over, and accountability for, all funds, property, and other assets. . . ." 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 200.400 states in part: "The application of these cost principles is based on the fundamental premises that: (a) The non-Federal entity is responsible for the efficient and effective administration of the Federal award through the application of sound management practices. INDIANA STATE BOARD OF ACCOUNTS 28 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) The non-Federal entity assumes responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. (c) The non-Federal entity, in recognition of its own unique combination of staff, facilities, and experience, has the primary responsibility for employing whatever form of sound organization and management techniques may be necessary in order to assure proper and efficient administration of the Federal award. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." 2 CFR 200.404 states in part: "A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non- Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: . . . (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award's cost." 2 CFR 200.508 states in part: "The auditee must: . . . (d) Provide the auditor access to personnel, accounts, books, records, supporting documentation, and any other information as needed for the auditor to perform the audit required by this part." Federal Register, Vol. 87, No. 18 states in part: "Treasury has divided the Restriction on Use section into . . . (B) other restrictions on use, which include (1) debt service and replenishing reserves, (2) settlements and judgements, and (3) general restrictions. These restrictions apply to all eligible use categories. . . ." Cause The School Corporation did not design and implement an effective internal control system to review all payroll expenditures from the Title I funds, ensuring they were for allowable activities. Effect The failure to design and implement an effective internal control system over payroll expenditures caused noncompliance with the compliance requirements as detailed in the Condition and Context. INDIANA STATE BOARD OF ACCOUNTS 29 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a system of internal controls to ensure that grant award fund compliance requirements are appropriately researched prior to spending. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-007 Subject: Title I Grants to Local Educational Agencies - Earmarking Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion Condition and Context A portion of the School Corporation's Title I allocation was required to be set aside for parent and family engagement and homeless reservation. The amounts required to be set aside were indicated in the Title I grant application. The School Corporation was responsible for monitoring each required set-aside throughout the life of the grant to ensure the obligations were met. There was no oversight or review process in place to ensure the monitoring of each required set-aside. The School Corporation did not expend the required minimum amount for parent and family engagement for the fiscal year 2023-2024 Title I grant. The School Corporation could not provide documentation to show that the obligation was met or not met to service all the homeless students in the School Corporation, and it could not be determined if the unused funds were transferred to the next grant award. 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: INDIANA STATE BOARD OF ACCOUNTS 30 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 20 USC 6318(a)(3) states in part: "(A) In general Each local educational agency shall reserve at least 1 percent of its allocation under subpart 2 to assist schools to carry out the activities described in this section, except that this subparagraph shall not apply if 1 percent of such agency's allocation under subpart 2 for the fiscal year for which the determination is made is $5,000 or less. Nothing in this subparagraph shall be construed to limit local educational agencies from reserving more than 1 percent of its allocation under subpart 2 to assist schools to carry out activities described in this section. . . . (D) Use of Funds Funds reserved under subparagraph (A) by a local educational agency shall be used to carry out activities and strategies consistent with the local educational agency's parent and family engagement policy, including not less than 1 of the following: (i) Supporting schools and nonprofit organizations in providing professional development for local educational agency and school personnel regarding parent and family engagement strategies, which may be provided jointly to teachers, principals, other school leaders, specialized instructional support personnel, paraprofessionals, early childhood educators, and parents and family members. (ii) Supporting programs that reach parents and family members at home, in the community, and at school. (iii) Disseminating information on best practices focused on parent and family engagement, especially best practices for increasing the engagement of economically disadvantaged parents and family members. (iv) Collaborating, or providing subgrants to schools to enable such schools to collaborate, with community-based or other organizations or employers with a record of success in improving and increasing parent and family engagement. (v) Engaging in any other activities and strategies that the local educational agency determines are appropriate and consistent with such agency's parent and family engagement policy." INDIANA STATE BOARD OF ACCOUNTS 31 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 20 USC 6313(c)(3) states: "(A) In general A local educational agency shall reserve such funds as are necessary under this part, determined in accordance with subparagraphs (B) and (C), to provide services comparable to those provided to children in schools funded under this part to serve— (i) homeless children and youths, including providing educationally related support services to children in shelters and other locations where children may live; (ii) children in local institutions for neglected children; and (iii) if appropriate, children in local institutions for delinquent children, and neglected or delinquent children in community day programs. Cause The School Corporation did not have internal controls in place to review parent and family involvement and homeless reservation transactions to ensure they were properly recorded and attributed to the correct expense type. The School Corporation's financial management system was not set up to separately track program expenditures relating to parent and family engagement and homeless reservation. Effect The failure to design and implement an effective internal control system, as well as not tracking expenditures related to parent and family involvement and homeless reservation expenditures, caused noncompliance with the compliance requirement as detailed in the Condition and Context. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation design and implement a set of internal controls that will allow them to ensure the earmarked funds are being used for the correct expenses, are being recorded properly, and are being reported properly to the Indiana Department of Education. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-008 Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425U Federal Award Number and Year (or Other Identifying Number): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion Condition and Context Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor complies with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. The School Corporation had not designed nor implemented a system of internal controls to ensure the construction contracts in excess of $2,000 paid from the federal grant funds included a prevailing wage rate clause. The School Corporation entered into one contract during the audit period, which included the cost of installation for a HVAC system for $1,203,187. This contract contained the required wage rate clause. Certified payrolls and a statement of compliance for each week in which contract work was performed were not collected timely by the School Corporation. 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). . . ." 29 CFR 5.5 states in part: "(a) Required contract clauses. The Agency head will cause or require the contracting officer to require the contracting officer to [sic] insert in full, or (for contracts covered by the Federal Acquisition Regulation (48 CFR chapter 1)) by reference, in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the laws referenced by § 5.1, the following clauses . . . INDIANA STATE BOARD OF ACCOUNTS 33 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (1) Minimum wages - (i) Wage rates and fringe benefits. All laborers and mechanics employed or working upon the site of the work (or otherwise working in construction or development of the project under a development statute), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of basic hourly wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (3) Records and certified payrolls - (ii) Certified payroll requirements - (A) Frequency and method of submission. The contractor or subcontractor must submit weekly, for each week in which any DBA- or Related Acts-covered work is performed, certified payrolls to the [write in name of appropriate Federal agency] if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the certified payrolls to the applicant, sponsor, owner, or other entity, as the case may be, that maintains such records, for transmission to the [write in name of agency]. . . ." 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, 'Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction'). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. . . . Cause The School Corporation was unaware of the Special Tests and Provisions - Wage Rate Requirements compliance requirement of needing to obtain certified payrolls from the vendor throughout the contract period. Management had not designed nor implemented a system of internal controls that would have ensured compliance with the grant agreement and the compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 34 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to design and implement an effective internal control system, as well as not obtaining certified payrolls from the vendor, caused noncompliance with the compliance requirement as detailed in the Condition and Context. Questioned Costs There were no questioned costs identified Recommendation We recommended that the School Corporation's management establish a system of internal controls, as well as appropriately and timely document adherence to required requirements, to ensure compliance with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

2025 - 001: Suspension and Debarment Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster ALN: 10.553, 10.555, 10.556, 10.559 Federal Award Identification Number and Year: 252MN061N1199, 2025 Pass-Through Agency: Minnesota Department of Education Pass-Through Number: 1-0112-000 Award Period: July 1, 2024 – June 30, 2025 Type of Finding: Material Weakness in Internal Control Over Compliance Criteria or Specific Requirement: The District should have controls in place to ensure compliance with suspension and debarment requirements of the Child Nutrition Cluster, per the requirements of 2 CFR §200.303. The Uniform Guidance requires that when a nonfederal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by either checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), collecting a certification from the entity, or adding a clause to the covered transaction with the entity. Condition: The District did not retain formal documentation of a control to ensure timely completion of suspension and debarment requirements. Questioned Costs: None Context: One of the two covered transactions selected for testing lacked formal control documentation showing that the District completed the required suspension and debarment verification before entering into the contract. The verification was instead performed and documented at a later date. Cause: The District’s policies and procedures did not include formal documentation of a control to ensure vendors are checked for suspension and debarment prior to entering covered transactions. Effect: The District could have entered into a covered transaction with an entity which was suspended or debarred without realizing it. Repeat Finding: Yes – 2024-004 Recommendation: We recommend that the District review its procurement policies and controls to ensure there is a formally documented control to ensure all vendors are checked for suspension and debarment prior to entering into a covered transaction. View of Responsible Official: There is no disagreement with the audit finding.

2025 - 002: Suspension and Debarment Federal Agency: U.S. Department of Education Federal Program Title: Special Education Cluster ALN: 84.027 and 84.173 Federal Award Identification Numbers and Year: H027A240087 & H173A240086, 2025 Pass-Through Agency: Minnesota Department of Education Pass-Through Numbers: H027A230087 & H173A230086 Award Period: July 1, 2024 – June 30, 2025 Type of Finding: Material Weakness in Internal Control Over Compliance Criteria or Specific Requirement: The District should have controls in place to ensure compliance with suspension and debarment requirements of the Special Education Cluster, per the requirements of 2 CFR §200.303. The Uniform Guidance requires that when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by either checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), collecting a certification from the entity, or adding a clause to the covered transaction with the entity. Condition: The District did not retain formal documentation of a control to ensure timely completion of suspension and debarment requirements. Questioned Costs: None Context: The one covered transaction selected for testing lacked formal control documentation showing that the District completed the required suspension and debarment verification before entering into the contract. The verification was instead performed and documented at a later date. Cause: The District’s policies and procedures did not include formal documentation of a control to ensure vendors are checked for suspension and debarment prior to entering covered transactions. Effect: The District could have entered into a covered transaction with an entity which was suspended or debarred without realizing it. Repeat Finding: Yes – 2024-005 Recommendation: We recommend that the District follow its procurement policies as well as requirements within the Uniform Guidance to perform the proper verification procedures on all covered transactions entered into with federal funds. Also, the District should ensure there is a formally documented control to ensure all vendors are checked for suspension and debarment prior to entering into a covered transaction. View of Responsible Official: There is no disagreement with the audit finding.

Federal Agency: Department of Education Federal Program Title: Student Financial Assistance Cluster Assistance Listing Number: 84.268, 84.063, 84.007, 84.033, 84.379 Federal Award Identification Number and Year: P268K252058-2025, P063P242058-2025, P007A253479-2025, P033A253479-2025, P379T262058-2025 Award Period: July 1, 2024 to June 30, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Compliance, Other Matter Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 682.610, states that institutions must report accurately the enrollment status of all students regardless of if they receive aid from the institution or not. Changes to said status are required to be reported within 30 days of becoming aware of the status change, or with the next scheduled transmission of statuses if the scheduled transmission is within 60 days. In addition, per the Uniform Guidance 2 CRF 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to ensure reasonable compliance with federal laws, regulations, and program compliance requirements. Condition: There were instances in which the University did not report the effective date and enrollment status correctly or timely. In addition, the University did not have a control in place to ensure timely and accurate reporting to NSLDS. Questioned costs: None Reported. Context: During our testing, we noted that the enrollment effective date of 6 of the 60 students tested was not reported correctly to NSLDS. We also noted that the change in enrollment status of 3 of the 60 students tested was not reported timely to NSLDS. We also noted the program enrollment effective date of 2 of the 60 students tested did not match the enrollment effective date. Additionally, we did not note evidence of a key control occurring for enrollment reporting. Cause: The University did not have proper controls or procedures in place to verify students' status in NSLDS matched the institution’s records in a timely manner. Effect: Failure to properly report enrollment status changes on NSLDS could affect the timing of the grace period for repayment of Title IV loans. Additionally, the University was not in compliance with the requirements to properly report student enrollment data correctly or timely to NSLDS. Repeat Finding: Yes, 2024-002. Recommendation: We recommend that the University implement a key control to ensure that enrollment data, changes in status, and effective dates within NSLDS match the records of the institution and are reported timely, and to store evidence of the key control having occurred. View of Responsible Official: There is no disagreement with the audit finding.

Federal Agency: Department of Education Federal Program Title: Student Financial Assistance Cluster Assistance Listing Number: 84.268, 84.063 Federal Award Identification Number and Year: P268K252058-2025, P063P242058-2025 Award Period: July 1, 2024 to June 30, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: During our testing, we noted that the University was unable to provide documentation evidencing the performance of a key control over the timeliness and accuracy of Common Origination and Disbursement (COD) disbursements reporting. Questioned costs: None reported. Context: The University could not provide evidence that the key control review was performed for any of the 60 disbursements selected for testing. Cause: The University does not maintain documentation to evidence their review to ensure disbursements are reported to COD timely and accurately. Effect: The absence of documented review increases the risk that disbursement data reported to COD may be inaccurate or untimely, which could result in inaccurate student records and may contribute to improper or excess student aid awards. Repeat Finding: Yes, 2024-004. Recommendation: We recommend the University retain evidence that key controls over COD reporting were performed. View of Responsible Official: There is no disagreement with the audit finding.

Federal Agency: Department of Education Federal Program Title: Student Financial Assistance Cluster Assistance Listing Number: 84.268, 84.063, 84.007, 84.033, 84.379 Federal Award Identification Number and Year: P268K252058-2025, P063P242058-2025, P007A253479-2025, P033A253479-2025, P379T262058-2025 Award Period: July 1, 2024 to June 30, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: During eligibility testing, we noted that the University did not provide documentation evidencing that a review of a professional judgment decision had been performed. Questioned costs: None reported. Context: Of the 40 student files selected for eligibility testing, one student had a professional judgment determination. While supporting documentation for the professional judgement decision was available, the University was unable to provide evidence that the decision had been reviewed. Cause: The University does not maintain documentation to demonstrate that professional judgment decisions are subject to an independent review in accordance with established procedures. Effect: The lack of documentation of review of professional judgment decisions increases the risk that such determinations may not be appropriately evaluated, which could result in student financial need not being accurately assessed and students being improperly awarded or underserved. Repeat Finding: Yes, 2024-003. Recommendation: We recommend the University enhance its procedures for reviewing professional judgement decisions to ensure that evidence of review is documented and retained. View of Responsible Official: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: 181701 Award Period: July 1, 2024 to June 30, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: During our testing, we noted that the University was unable to provide evidence that a key control to verify the accuracy and timeliness of payments to program participants had been performed. Questioned costs: None reported. Context: The University was unable to provide documentation evidencing that the key control was performed for any of the 40 disbursements selected for testing. Cause: The University’s procedures for reviewing payments to program participants did not include documentation to provide evidence that the review had occurred. Effect: The lack of documented review increases the risk that errors in payments to program participants may not be identified or corrected in a timely manner. Repeat Finding: No. Recommendation: We recommend the University implement procedures to ensure evidence of the key control review over payments to program participants is documented and retained. View of Responsible Official: There is no disagreement with the audit finding.

Criteria or specific requirement: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. Per 2 CFR Part 170, “subaward” has the meaning given in 2 CFR 200.1 and means an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a federal award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a federal program. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) 2 CFR 200.303 requires that non-federal entities receiving federal awards 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 comply 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). Condition: During testing of the Federal Funding Accountability and Transparency Act (FFATA) report, it was noted that the Kansas Division of Emergency Management (KDEM) did not timely report certain subawards to FSRS for the fiscal year. Questioned costs: None. Context: Twenty-eight subawards were selected for testing, totaling $39,668,267. Eighteen of the twenty-eight subawards (64%), totaling $39,594,211, were not submitted timely and reviewed timely prior to being submitted to FSRS as summarized below. While the reports were not filed timely, the supporting documentation that was needed to file the reports was gathered by KDEM and the filing was completed before SFYE 6/30/2025. Transactions Tested Report not timely 28 18 Dollar Amount of Tested Transactions Report not timely $39,668,267 $39,594,211 Cause: KDEM was understaffed during the current and prior fiscal years and had not fully implemented its corrective action plan from the prior year audit during SFY 2025 to ensure that the subawards were reported timely and reviewed timely prior to submitted to FSRS. Effect: Management is not in compliance with FFATA reporting requirements. Repeat Finding: Yes, Finding 2024-010. Recommendation: We recommend that KDEM continue to implement its corrective action plan from the prior year. Management should continue to enhance its procedures and internal controls to ensure that subawards are accurate, reported timely and reviewed timely to FSRS. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: Per 2 CFR 200.332, all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information listed in 2 CFR 200.332(a)(1) at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Per 2 CFR 200.332(b), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes required award information. A pass-through entity must provide the best available information when some of the information below is unavailable. A pass-through entity must provide the unavailable information when it is obtained. Required information includes: Subrecipient's name, Subrecipient's unique entity identifier, Federal Award Identification Number (FAIN), Federal Award Date, Subaward Period of Performance Start and End Date, Subaward Budget Period Start and End Date, Amount of Federal Funds Obligated in the subaward, Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity, including the current financial obligation, Total Amount of the Federal Award committed to the subrecipient by the pass-through entity, Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA), Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity, Assistance Listings title and number, Identification of whether the Federal award is for research and development, Indirect cost rate for the Federal award (including if the de minimis rate is used. Per 2 CFR 200.303, non-federal entities receiving federal awards are required to 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 comply 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). Condition: During our testing of subrecipient monitoring, we noted that for certain subawards the Kansas Division of Emergency Management (KDEM) did not timely issue the subaward letter to the subrecipients, which should have been communicated within 30 days of subaward being obligated or before subaward payments were made. Questioned costs: None. Context: For eleven of twenty-eight subrecipients selected for testing, KDEM did not issue subaward letters to the subrecipient timely when the funds were approved and obligated. Further for six of the eleven subrecipients tested, KDEM did not maintain documentation from a previously utilized portal that they no longer have access to. Cause: 2 CFR 200.332(a) requires subawards to include certain required information to be communicated to subrecipients at the time of the subaward being awarded. The subawards were made prior to KDEM fully implementing their corrective action plan. For six of the transactions, KDEM no longer has access to the portal in which the subaward documentation is maintained. Effect: Failure to issue subawards timely and to include required federal award information could result in subrecipients not properly administering the federal program in accordance with federal regulations. Repeat Finding: Yes, Finding 2024-011. Recommendation: We recommend that KDEM continues to implement its corrective action plan from prior year and continue to enhance its internal controls and procedures to ensure that the subaward letter is issued to subrecipients timely to ensure all required federal award information is communicated to the subrecipient at the time of the subaward. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. Per 2 CFR Part 170, “subaward” has the meaning given in 2 CFR 200.1 and means an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a federal award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a federal program. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Per 2 CFR 200.303, requires that non-federal entities receiving federal awards 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 comply 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). Condition: During the audit period, the entity did not submit required FFATA reports for certain first‑tier subawards subject to FFATA reporting requirements. As a result, required information was not reported in SAM.gov by the last day of the month following the month in which the subaward obligation occurred. Questioned costs: None. Context: Fourteen of the fourteen new subawards tested during the current year were not reported to the FSRS to comply with the Federal Funding and Accountability Act (FFATA). Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 14 14 14 14 14 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $ 651,008 $651,008 $651,008 $651,008 $651,008 Cause: The noncompliance occurred because the entity did not have adequate internal controls in place to identify federal awards and subawards subject to FFATA reporting requirements. Specifically, management did not maintain a formal process to track FFATA‑reportable awards, monitor reporting deadlines, or ensure staff responsible for grant administration were sufficiently trained on FFATA reporting requirements. Effect: As a result of this noncompliance, required FFATA information related to federal subawards was not publicly reported in a timely and complete manner, reducing transparency over the use of federal funds. Failure to comply with FFATA reporting requirements may result in increased oversight by federal awarding agencies and could impact the entity’s ability to receive future federal funding. Repeat Finding: No Recommendation: We recommend that management implement policies and procedures to ensure compliance with FFATA reporting requirements. This should include identifying all federal awards and subawards subject to FFATA, establishing a process to track reporting deadlines, and providing training to personnel responsible for grant administration to ensure FFATA reports are submitted timely and accurately in SAM.gov. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: Per 2 CFR 200.332, all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information listed in 2 CFR 200.332(a)(1) at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: Subrecipient's name, Subrecipient's unique entity identifier, Federal Award Identification Number (FAIN), Federal Award Date, Subaward Period of Performance Start and End Date, Subaward Budget Period Start and End Date, Amount of Federal Funds Obligated in the subaward, Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity, including the current financial obligation, Total Amount of the Federal Award committed to the subrecipient by the pass-through entity, Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA), Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity, Assistance Listings title and number, Identification of whether the Federal award is for research and development, Indirect cost rate for the Federal award (including if the de minimis rate is used). Per 2 CFR 200.303, non-federal entities receiving federal awards are required to 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 comply 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). Per 2 CFR 200.332(f) pass-through entities must verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Per 2 CFR 200.332(e)(2), a pass-through entity must following-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. Single Audit findings referenced above are those resulting from audits required under 2 CFR 200.501. Condition: Subawards issued by the Kansas Department of Health and Environment (Department) did not include all required subaward information and failed to obtain the Unique Identity ID for all subawards. The Department did not obtain the required audit information (Single Audit or another applicable audit) from its subrecipient during the audit period. Questioned costs: None. Context: Twenty-five of thirty-four subawards selected for testing, totaling $11,685,599, did not include all required federal award information. Specifically, the following was omitted: • Subrecipient’s Unique Identifier - (Twenty-five of Thirty-four subawards) • Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity, including the current financial obligation – (Twenty-five of thirty-four subawards) • Identification of whether the award is research and development - (Twenty-five of Thirty-four subawards) • Indirect cost rate for federal award - (twenty-five of Thirty-four subawards) For two of the thirty-four subawards the Department failed to provide evidence that the Unique Entity ID was obtained. We were not provided with an audit report for one of the thirty-four subawards tested, totaling $680,010. Cause: The Department’s procedures were not sufficient to ensure that subawards included all required federal award information and obtain the required Unique Entity ID. Internal controls did not prevent or detect the errors. The Department did not have adequate procedures in place, or did not consistently implement existing procedures, to request, obtain, and track required subrecipient audit reports as part of its subrecipient monitoring process. Effect: Excluding the required federal award information at the time of subaward issuance could result in subrecipients not properly administering the federal programs in accordance with federal regulations. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports when all federal award information is not provided to them. Failure to obtain the subrecipient’s UEI resulted in incomplete subaward identification and increases the risk of ineffective subrecipient monitoring. Without obtaining and reviewing the subrecipient’s audit, the Department lacked reasonable assurance that audit findings, questioned costs, or instances of noncompliance affecting the subaward were identified and addressed. This increased the risk that Federal funds were not administered in accordance with applicable requirements. Repeat Finding: Yes, finding 2024-006. Recommendation: We recommend that the Department revise the subaward templates to include all required federal award information and update its procedures and internal controls to ensure that all required federal award information is included in subawards at the time of issuance. The Department should establish and implement formal subrecipient monitoring procedures to ensure required audit reports are requested, obtained, and reviewed in a timely manner. The Department should document its review of audit results and perform appropriate follow‑up on any identified deficiencies to ensure compliance with Federal requirements. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: 2 CFR 200.214 Suspension and Debarment restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person 2 CFR 200.303 requires that non-federal entities receiving federal awards 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 comply 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). Condition: Kansas Department of Health and Environment (Department) was unable to provide supporting documentation that it had performed suspension and debarment verification procedures before the start of procurement contracts. Questioned costs: None. Context: Sixty transactions were selected for testing which included twenty-five contracts and thirty-five subawards. For twenty-five of twenty-five contracts (100%), the Department was unable to provide documentation supporting when it had verified the contractors’ suspension and debarment status. The Department provided auditors with documentation that the contractors were not suspended or debarred, however, auditors were not able to verify that the status was documented prior to the start of the contracts. No exceptions were noted for the thirty-five subawards tested. Cause: The Department’s procedures and internal controls are not sufficient to ensure that it verifies and properly documents contractors’ suspension and debarment status prior to the execution of contracts. Effect: Failure to perform suspension and debarment verification procedures before the procurement of good or services could result in the payment of federal funds to contractors that are ineligible to participate in federal assistance programs. Repeat Finding: Yes, Finding 2024 - 007 Recommendation: We recommend that the Department enhances its procedures and internal controls to ensure that it verifies and maintains documentation of its contractors’ suspension and debarment status prior to the execution of all contracts. Verification can be performed by either checking SAM exclusions and maintaining documentation when the verification occurred, collecting a signed certification from the contractor prior to contract execution, or adding a clause or condition to the contract. We further recommend that documentation is readily available for audit. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: Per 42 CFR part 442, providers must meet the prescribed health and safety standards for hospitals, nursing facilities, and ICF/IID. 2 CFR 200.303 requires that non-federal entities receiving federal awards 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 comply 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). Condition: Kansas Department of Health and Environment (Department) was unable to provide supporting documentation that it had performed recertification surveys within the required timeframe which is used to meet the provider health and safety standards. Questioned costs: Unable to determine. Context: Out of sixty providers selected for testing, the Department was unable to provide the recertification surveys for 26 providers. As such, we were unable to ensure that those 26 providers met the prescribed health and safety standards prior to the Department making payments to those providers. These exceptions resulted in an error rate of 43%. Cause: The Department’s procedures and internal controls were not operating effectively to ensure that recertification surveys were maintained by the Department. The Department had not completed implementation of its corrective action plan from the prior year. Effect: Compliance with the prescribed health and safety standards for this program is not being met. Providers who are not meeting the health and safety standards are still able to receive payments. Repeat Finding: Yes, Finding 2024-009. Recommendation: We recommend the Department complete implementation of its corrective action plan from the prior year. We recommend the Department train all staff members to properly verify providers are meeting the prescribed health and safety standards before making payments to those providers and maintain all records of these verifications. Views of responsible officials: There is no disagreement with the audit finding. KDHE/Bureau of Facilities and Licensing (BFL) recognizes that documentation for twenty-six of the sixty providers was not provided. KDHE BFL operates as the State Survey Agency (SSA) under agreement with the Centers for Medicare and Medicaid Services pursuant to Section 1864 of the Social Security Act. Survey frequency and workload prioritization are governed by the annual CMS Mission and Priority Document (MPD), not by Medicaid payment cycles. KDHE BFL does not authorize, approve, or suspend Medicaid payments and does not function as a pre-payment verification entity. Health and safety oversight is accomplished through federally directed recertification surveys, complaint investigations, and CMS approved accreditation processes, consistent with the MPD and federal survey requirements. The MPD establishes a mandatory prioritization framework requiring SSA to complete Tier 1 and Tier 2 workload before initiating Tier 3 and Tier 4 activities. During the award period in question, the SSA allocated available survey resources in accordance with MPD directives, prioritizing Immediate Jeopardy investigations, high-priority complaints, enforcement follow-up, and other time-sensitive certification actions. Recertification surveys fall lower within lower-tier workload categories and may be deferred when higher-tier federally mandated priorities require resource allocations. The SSA’s survey scheduling decisions during the audit period were consistent with CMS directed workload prioritization requirements. During a recent internal review, the SSA identified several historical recertification surveys that remain in open status with the ASPEN/ACO system. In some instances, the surveys were completed and follow-up actions addressed; however, final administrative closure steps do not appear to have been fully finalized in the system. Other findings included revisit linkage or enforcement tracking was not fully reconciled or provider terminations or Change of Ownership (CHOW) process were not fully reconciled.

Criteria or specific requirement: Per 2 CFR 200.332, all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information listed in 2 CFR 200.332(a)(1) at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Per 2 CFR 200.332(b), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes required award information. A pass-through entity must provide the best available information when some of the information below is unavailable. A pass-through entity must provide the unavailable information when it is obtained. Required information includes: Subrecipient's name, Subrecipient's unique entity identifier, Federal Award Identification Number (FAIN), Federal Award Date, Subaward Period of Performance Start and End Date, Subaward Budget Period Start and End Date, Amount of Federal Funds Obligated in the subaward, Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity, including the current financial obligation, Total Amount of the Federal Award committed to the subrecipient by the pass-through entity, Federal award project description, as required by the Federal Funding Accountability and Transparency Act (FFATA), Name of the Federal agency, pass-through entity, and contact information for awarding official of the pass-through entity, Assistance Listings title and number, Identification of whether the Federal award is for research and development, Indirect cost rate for the Federal award (including if the de minimis rate is used. Per 2 CFR 200.332(a), a pass-through entity must verify that the subrecipient is not excluded or disqualified in accordance with § 180.300. Verification methods are provided in § 180.300, which include confirming in SAM.gov that a potential subrecipient is not suspended, debarred, or otherwise excluded from receiving Federal funds. Per 2 CFR 200.303, non-federal entities receiving federal awards are required to 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 comply 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). Condition: Subawards issued by the Kansas Department of Education and Kansas Department of Children and Families (Departments) did not include all required subaward information. Subawards underwent suspension and debarment verification from sam.gov but this process was not formally documented. Questioned costs: None. Context: Eleven of nineteen subawards selected for testing, totaling $991,788, did not include all required federal award information. Specifically, the following was omitted: • Federal Award Identification Number (FAIN) • Name of the Federal agency and contact information for awarding official of the pass-through entity • Assistance Listing Number; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at the time of disbursement • Identification of whether the award is research and development • In addition, for eleven of the eleven subawards tested, the Department did not maintain documentation evidencing that suspension and debarment verification was performed prior to issuing the subawards. Cause: The Department’s procedures were not sufficient to ensure that subawards included all required federal award information and that suspension and debarment verification was documented. Internal controls did not prevent or detect the errors. Effect: Excluding the required federal award information at the time of subaward issuance could result in subrecipients not properly administering the federal programs in accordance with federal regulations. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports when all federal award information is not provided to them. As a result of this condition, the federal awarding agency lacks full assurance that program funds were administered in compliance with federal requirements, including requirements related to vendor suspension and debarment. This condition limits the government’s ability to ensure proper oversight and stewardship of federal funds. Repeat Finding: No Recommendation: We recommend that the Departments develop a subaward template that includes all required federal award information and update its procedures and internal controls to ensure that all required federal award information is included in subawards at the time of issuance. We recommend that management enhance its procurement procedures to require and retain documented evidence that vendors are verified as not suspended or debarred prior to the award of contracts or payment of federal funds. Maintaining this documentation will help ensure compliance with federal requirements and support the government’s assurance that federal funds are expended only with eligible vendors. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. Per 2 CFR Part 170, “subaward” has the meaning given in 2 CFR 200.1 and means an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a federal award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a federal program. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Per 2 CFR 200.303, requires that non-federal entities receiving federal awards 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 comply 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). Condition: Kansas Department of Children and Families (Department) was unable to provide FFATA reports for various subawards. Questioned costs: None. Context: During Reporting – FFATA testing the Department was unable to provide submitted FFATA reports for four of the 12 subaward transactions tested. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 12 4 4 4 4 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $ 377,770 $377,770 $377,770 $377,770 $377,770 Cause: The Kansas Department of Children and Families (DCF) passed a portion of the award to the Kansas Department of Education (KSDE). The Kansas Department of Education (KSDE) passed the awards to other subrecipients located outside of the State of Kansas. At the time these subawards were issued, DCF was not aware that the subawards were subject to the Federal Funding Accountability and Transparency Act (FFATA) reporting requirements. As a result, DCF did not submit the required FFATA reports for the subawards passed through to these subrecipients. Effect: As a result of not submitting the required FFATA reports for subawards passed through to the Kansas Department of Education and other subrecipients located outside of the State of Kansas, the federal awarding agency did not receive complete and timely information regarding the use of federal funds. This resulted in noncompliance with FFATA reporting requirements and reduced transparency over federal subaward activity, which could limit federal oversight and monitoring of the program. Repeat Finding: No Recommendation: We recommend that the Kansas Department of Children and Families implement procedures to identify all subawards subject to Federal Funding Accountability and Transparency Act (FFATA) reporting requirements, including subawards passed through to both in‑state and out‑of‑state subrecipients. DCF should provide training to relevant staff on FFATA requirements and establish a review process to ensure required FFATA reports are submitted accurately and timely for all applicable subaward. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: Per 2 CFR 200.303, requires that non-federal entities receiving federal awards 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 comply 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). Condition: The entity did not have a documented control in place to evidence an independent review of the ACF‑199 TANF Data Report for accuracy and completeness prior to submission to the federal awarding agency. The report was generated from system data and submitted without documented supervisory review or approval before transmission. Questioned costs: None. Context: For two of the four ACF‑199 reports tested, the auditors were unable to obtain evidence that a documented review or approval of the report occurred prior to submission. No errors were identified in the reports tested, and the reports were system‑generated; however, the absence of documented review for a portion of the population tested indicates that the review control was not consistently applied. Cause: Management relied on the fact that the ACF‑199 report is generated from system‑based data extracts and did not implement a formalized review or approval process prior to submission. As a result, a specific control to review and approve the report before submission was not designed or documented. Effect: Without a documented pre‑submission review, there is an increased risk that errors or omissions in the ACF‑199 TANF Data Report may not be detected timely, which could result in the submission of inaccurate or incomplete information to the federal awarding agency. Repeat Finding: No Recommendation: We recommend that management design and implement a documented review and approval control over the ACF‑199 TANF Data Report prior to submission to the federal awarding agency. The control should include evidence of review to verify the accuracy and completeness of the report, such as documented supervisory sign‑off, electronic approval, or retention of review documentation. Implementing a consistent pre‑submission review process will strengthen internal controls over federal reporting and provide reasonable assurance of compliance with reporting requirements. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: Per 2 CFR 200.303, requires that non-federal entities receiving federal awards 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 comply 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). Condition: During test work of Activities Allowed or Unallowed & Allowable Costs/Cost Principles, one transaction was identified that lacked evidence that the transaction was reviewed. Questioned costs: None. Context: One of the forty transactions selected for testing, totaling $7,300, lacked evidence that the transaction was properly reviewed and approved. Cause: The Department was under a transition period between the legacy UI system and newly implemented system when this transaction occurred. The process of reviewing at the time had not been fully implemented within the new system. Effect: Not reviewing a transaction related to a federal expenditure increases the risk that the entity may be unaware of noncompliance with federal program requirements, such as unallowable costs or improper use of funds. This can result in questioned costs, the need to repay federal funds, or increased scrutiny from oversight agencies. Additionally, unresolved issues may affect the entity’s eligibility for future federal funding and require additional time and resources to address corrective actions, monitoring, or remediation efforts. Repeat Finding: No Recommendation: We recommend that the Department strengthen its review and monitoring procedures over federal expenditures to ensure that all transactions are appropriately reviewed for compliance with applicable federal program requirements. Management should implement controls to ensure transactions are adequately supported, reviewed in a timely manner, and documented, including supervisory review of expenditures charged to federal programs. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: Per 2 CFR 200.303, requires that non-federal entities receiving federal awards 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 comply 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). Condition: During our testing of ETA – 191, Financial Status of UCFE/UCX one of the two reports tested lacked documentation that the report was reviewed prior to submission. Questioned costs: None. Context: One of the two ETA – 191, Financial Status of ECFE/UCX reports tested lacked documentation that the report was reviewed prior to submission. Cause: The Department lacked proper controls around the report to ensure that documentation was maintained to support that the report was reviewed for accuracy prior to submission. Effect: When evidence of review is not maintained, the Department lacks support that key oversight and approval controls were effectively performed. This increases the risk that errors, omissions, or noncompliance issues are not identified or addressed in a timely manner. In the absence of documented review, the Department may be unable to demonstrate compliance with internal control expectations to oversight agencies, which could result in increased scrutiny, additional monitoring requirements, or the need for corrective action. Repeat Finding: No Recommendation: We recommend that the Department formalize its review procedures by maintaining documented evidence of reviews for key reports related to federal programs. Management should establish clear documentation standards, such as reviewer sign‑off, date of review, and evidence of follow‑up on identified issues, to demonstrate that oversight controls are consistently performed. Views of responsible officials: There is no disagreement with the finding.

Criteria or specific requirement: Per 2 CFR 200.303, requires that non-federal entities receiving federal awards 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 comply 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). States are required to submit periodic reporting to evaluate the performance of the state UI program. This includes the following reports: ETA 9050 – Time Lapse of All First Payments Except Workshare, ETA 9052 – Nonmonetary Determination Time Lapse Detections and the ETA 9055 – Appeals Case Aging – Lower and Higher Authority Appeals. Condition: During the audit period, the Department did not submit the ETA 9050, ETA 9052, and ETA 9055 reports accurately. Testing identified discrepancies between the data reported to the U.S. Department of Labor and the supporting underlying records, including variances within validation samples used to support reported figures. As a result, the reported information did not fully and accurately reflect program activity for the audit period. Questioned costs: None. Context: The U.S. Department of Labor requires states to submit accurate and complete Unemployment Insurance (UI) reports, including ETA 9050, ETA 9052, and ETA 9055. As part of the audit, eight ETA reports were tested, and discrepancies were identified in all eight reports tested. Cause: The condition occurred because the Department was in the process of implementing a new information system during the current year, which required the migration of historical and current‑year data. Management is continuing to identify and resolve data integrity issues associated with the system conversion, including differences within validation samples used to prepare the ETA reports. As a result, the Department is still working through data reconciliation and validation challenges related to the new system environment. Effect: As a result of the inaccurate submission of the ETA 9050, ETA 9052, and ETA 9055 reports, the U.S. Department of Labor may not have reliable information to assess the Department’s compliance with federal UI program requirements, including the timeliness and quality of nonmonetary determinations. Continued inaccuracies in required reporting could result in increased federal oversight and may impact future program evaluations or funding decisions. Repeat Finding: No Recommendation: We recommend that the Department continue efforts to strengthen controls over the preparation and review of ETA reports, including completing data reconciliation procedures related to the new system implementation. This should include validating migrated data, resolving discrepancies identified within validation samples, and implementing review procedures to ensure reported information is accurate, complete, and supported prior to submission to the U.S. Department of Labor. Views of responsible officials: There is no disagreement with the finding.

Criteria or specific requirement: Per 2 CFR 200.303, requires that non-federal entities receiving federal awards 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 comply 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). Condition: The Kansas Department of Health and Environment (Department) submits quarterly workplan milestone progress reports; however, the reports provided are cumulative in nature and prior quarterly versions are not retained. As a result, auditors were unable to review progress and supporting information for each individual quarter, as only the most recent cumulative report was available. We were also unable to verify the dates that the quarterly performance reports were submitted. The Department prepares and submits quarterly workplan milestone progress reports and annual performance reports; however, documented evidence of supervisory or management review and approval of these reports prior to submission was not consistently maintained. As a result, the Department was unable to provide documentation demonstrating that the reports were reviewed for accuracy, completeness, or compliance with reporting requirements. Questioned costs: None. Context: During the audit, twenty-one quarterly workplan milestone progress reports were selected for testing; however, because the reports provided were cumulative and prior quarterly versions were not retained, we were able to test only four of the twenty-one reports and were unable to test the remaining twenty‑one reports. During the audit, twenty-one quarterly workplan milestone progress reports were selected for testing, and none included documentation evidencing review prior to submission. Additionally, five annual performance reports were tested; although the reports were available and appeared complete, the Department was unable to provide documentation demonstrating that they were formally reviewed prior to submission. Cause: The Department does not save or retain copies of the quarterly progress reports at the time they are submitted. Instead, reports are updated cumulatively each quarter, resulting in the loss of historical quarterly information. The Department does not have formalized procedures requiring documentation of supervisory or management review and approval for quarterly workplan milestone progress reports or annual performance reports. Although reports may be reviewed informally, the absence of standardized review and documentation procedures resulted in a lack of verifiable evidence that reports were reviewed prior to submission. Effect: Because individual quarterly reports were not retained, we were unable to verify progress, milestones, and reported information on a quarterly basis, which limits the ability to demonstrate compliance with reporting requirements and increases the risk that errors, omissions, or delays in milestone completion may not be detected timely. We were unable to verify whether the quarterly performance reports were submitted timely. Additionally, the absence of documented supervisory or management review for quarterly and annual performance reports limits the Department’s ability to demonstrate appropriate oversight and effective internal controls over performance reporting. Repeat Finding: No Recommendation: We recommend that the Department implement procedures to retain copies of each quarterly workplan milestone progress report at the time of submission. Maintaining discrete quarterly reports will improve documentation, support compliance with program requirements, and allow for effective monitoring and audit review of progress throughout the reporting period. In addition, we recommend that the Department implement formal procedures to document the review and approval of the quarterly and annual performance reports prior to submission. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: In accordance with 2 CFR §200.303, non-Federal entities must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is complying with Federal statutes, regulations, and the terms and conditions of Federal awards. In addition, the Adoption Assistance Title IV‑E program allows payment of nonrecurring adoption expenses on behalf of an eligible child. Program records must include adequate supporting documentation to substantiate the allowability and eligibility of such costs. Condition: During testing of eligibility requirements, it was noted that three participants out of forty tested did not have supporting documentation in their case files for nonrecurring adoption expenses paid on their behalf. Questioned costs: None. Context: The participants tested were determined to be eligible for the program; however, their case files did not contain complete documentation supporting the nonrecurring expenses component. Cause: Internal controls were not sufficient to identify and correct missing documentation for nonrecurring expenses prior to payment. Effect: Without adequate supporting documentation, nonrecurring expenses paid may have included costs that were not eligible under program requirements. Repeat Finding: No. Recommendation: We recommend that KDCF strengthen internal controls to ensure that supporting documentation for nonrecurring adoption expenses is obtained, reviewed, and retained prior to payment to mitigate the risk of noncompliance in the future. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or Specific Requirement: Per 2 CFR 200.303 - Internal Controls and the OMB Compliance Supplement: Child Nutrition Cluster, Reporting - The District is required to have internal controls, including segregation of duties, over reporting of monthly reimbursement claims. Conditon: The same individual is responsible for preparing and submitting monthly reimbursement claims for the Child Nutrition Program without an independent review or approval prior to submission. Questioned Costs: This condition resulted in no identified questioned costs. Context: Currently one individual is responsible for preparing and submitting the monthly reimbursement claims. Effect: Meal claims could be submitted to the Illinois State Board of Education that do not accurately reflect the number of meals served. Consequently, the District could be over- or under-reimbursed by this grant program. Cause: Absense of formal internal control procedures resulted in one person performing all reporting functions. Recommendation: Implement segregation of duties by requiring one person to prepare the monthly claim and a second person (e.g., supervisor) to review and approve the claim before submission. The review should be supported with signatures or electronic approval logs. Management's response: A corrective action plan will be developed and implemented. A secondary review of the meal claim to the supporting documents will be performed before the meal claim is submitted.

2025 – 003: Reporting Federal Agency: U.S. Department Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: 7000S425U210013 Award Period: July 1, 2024 – June 30, 2025 Type of Finding: • Material Weakness in Internal Control Over Compliance • Other Matters Criteria or specific requirement: Grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. Amounts reports must be supported by the unit's records. Per 2 CFR 200.303, The non-Federal entity must: (a) Establish and maintain effective internal control over 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 of the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: While performing audit procedures, it was noted that the School did not file the required annual report that was due during the audit period. Questioned costs: None. Context: During audit testing, it was noted that the annual reporting was not completed by the School as required during the audit period. Cause: The reporting requirement was missed due to management’s oversight. Effect: The School has not fully followed compliance attributes with the reporting requirements set forth by the Compliance Supplement. Personnel need to reinforce policies to ensure control procedures are in place to ensure all required grant compliance items are reviewed, approved, and completed in accordance with grant requirements. Repeat finding: No. Recommendation: We recommend that the School implement procedures and controls to ensure the required reports are accurate and completed timely. Views of responsible officials: There is no disagreement with the audit finding.

FINDING 2025-003 Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2024, FY2025 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Eligibility Audit Finding: Significant Deficiency Condition and Context The School Corporation had not properly implemented effective internal controls, which would include segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. Activities Allowed or Unallowed, Allowable Costs/Cost Principles During both the 2023-2024 and the 2024-2025 fiscal years, the School Corporation made payments to one vendor for E-Funds via wire transactions that were automatically debited from their account without review prior to payment. Additionally, these transactions were not included within the Allowance of Claims reports presented to and approved by the School Board. The lack of internal controls was isolated to these specific E-Fund transactions with this vendor. Eligibility For the 2023-2024 fiscal year, the School Corporation was unable to provide documentation that internal control activities were properly implemented over the initial Direct Certification CNP data abstract that was compiled at the beginning of the school year. Due to this, it could not be determined if internal controls were operating effectively. Additionally, subsequent reports generated only included students who had changes in status and did not include those pulled during the initial data abstract. The lack of internal controls was isolated to Direct Certifications during the 2023-2024 fiscal year. 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 18 NORTHWESTERN SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not implemented by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2024, FY2025 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Significant Deficiency, Other Matters Condition and Context Suspension & Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods or services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. Verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. INDIANA STATE BOARD OF ACCOUNTS 19 NORTHWESTERN SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation had not properly implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. During the audit period, covered transactions in the amount of $63,597 were entered into with one vendor. The School Corporation had not checked the EPLS to verify the vendor was neither suspended nor debarred. The lack of internal controls and noncompliance were systemic throughout the audit period. Procurement During both the 2023-2024 and the 2024-2025 fiscal years, the School Corporation made payments to one vendor tested for micro-purchases for E-Funds via wire transactions that were automatically debited from their account without review prior to payment. Additionally, these transactions were not included within the Allowance of Claims reports presented to and approved by the School Board. The lack of internal controls is isolated to these specific E-Fund transactions with this vendor. 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 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." 2 CFR 200.214 states: "Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities." INDIANA STATE BOARD OF ACCOUNTS 20 NORTHWESTERN SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not implemented a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without designing and implementing an effective internal control system, material noncompliance was able to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Assistance Listing, Federal Agency, and Program Name - 14.871, U.S. Department of Housing and Urban Development (HUD), Section 8 Housing Choice Vouchers Program Federal Award Identification Number and Year - Not applicable Pass-through Entity - Not applicable Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.303, the recipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should align with the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control-Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition - The City did not have adequate controls in place around the salaries and wages charged to the program. Questioned Costs - Not applicable If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - Not applicable Identification of How Questioned Costs Were Computed - Not applicable Context - During testing over the City's internal controls, PM identified the City did not have supporting documentation to show controls in place to review the salaries and wages charged to the program. Cause and Effect - The City was not able to provide sufficient documentation to support a review of salaries and wages. Although no instances of noncompliance were identified, the risk of noncompliance exists due to the fact no controls were in place to review expenditures for payroll applied to the program. Recommendation - We recommend the City implement controls surrounding the review of payroll-related expenditures. Views of Responsible Officials and Corrective Action Plan - The City acknowledges this finding and has updated our procedures to include the City Administrators’ review and approval, as evidenced by his signature, on all Section 8 employee timesheets. The City believes this finding will be corrected by June 30, 2026.

Federal Agency: U.S. Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Number: 84.063 (Federal Pell Grant Program), 84.268 (Federal Direct Student Loans Program) Federal Award Identification Number and Year: N/A; 2024-2025 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2024 – June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance; Other Matters Criteria or specific requirement: Federal regulations and related guidance governing Title IV student aid programs requires institutions to accurately and timely report enrollment information to the National Student Loan Data System (NSLDS). Institutions must ensure that the reported data is complete and accurate, reflecting the student's actual enrollment status at the campus and program levels, including full-time, half-time, graduated, withdrawn, or any other status changes. This requirement helps maintain the integrity of the federal student aid programs and ensures that students' loan repayment statuses are correctly managed (NSLDS Enrollment Reporting Guide, November 2022, Chapter 2). Changes in enrollment status must be reported within 60 days of determining the student's status has changed. In addition, institutions must certify enrollment status on an ongoing basis, at least every 60 days (NSLDS Enrollment Reporting Guide, November 2022, Chapter 5).The data reported, including the effective date of enrollment status, must match the institution's internal records and reflect the student's current enrollment status (NSLDS Enrollment Reporting Guide, November 2022, Chapter 4). Finally, if the institution uses a third-party servicer for reporting, it must ensure that the servicer complies with all federal reporting requirements (NSLDS Enrollment Reporting Guide, November 2022, Chapter 3, Section 3.3). According to 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Section III – Federal Award Findings and Questioned Costs (Continued) 2025 – 001 (Continued) Condition: During our audit of the District's enrollment reporting to NSLDS, for 11 (28%) of 40 students tested, the District did not accurately and timely report enrollment status changes to NSLDS. Specifically: • 11 of these students did not have their enrollment status change reported within 60 days of the date the District determined the change in status; • 1 of these students did not have their enrollment status verified on an ongoing basis per the required 60-day timeframe during the fiscal year. Questioned costs: None Context: The District uses the services of the National Student Clearinghouse (NSC) to report status changes to NSLDS. Under this arrangement, the District reports all students enrolled and their status to NSC. NSC then identifies any changes in status and reports those changes to NSLDS when required. Although the District uses the services of NSC, the District still has the primary responsibility to report any changes in student enrollment status accurately and in a timely manner. Cause: A control system to prevent and detect errors in the reporting process was not created to ensure all required reporting compliance was filed timely. Effect: Failure to comply with these reporting requirements can result in administrative actions, including fines and penalties, and can affect the institution's eligibility to participate in federal student aid programs. Non-compliance may also lead to inaccurate loan repayment statuses for students, potentially causing financial hardship. Repeat finding: Yes Recommendation: We recommend that the District enhance its oversight and monitoring of the third-party service provider responsible for reporting enrollment status changes to NSLDS. Views of responsible officials: The College acknowledges that a submission error occurred in Spring 2023, resulting in several students not being included in the routine semester enrollment submissions to the National Student Clearinghouse (NSC). Beginning in Spring 2024, our Institutional Research department initiated a comprehensive process to resubmit corrected enrollment files to the NSC, covering Spring 2023, Summer 2023, and Fall 2023. In collaboration with NSC, we followed their established process to rectify the error, which required reloading each submission one at a time in succession from the original submission with the error. This process caused delays in our subsequent submissions until the corrections were fully completed. To prevent recurrence, we have implemented enhanced checks and controls prior to each submission to review the file and file size to ensure the correct number of students are submitted to NSC. Additionally, all submissions post-Spring 2023 have been reviewed, and we have confirmed that this was an isolated incident. Due to the timing of when the College was notified by NSC, this item carried forward into audit year 2025.

2025-003 – GRANT AWARD POLICIES AND PROCEDURES Criteria: 2 CFR 200.303 requires that a 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 and the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.318 requires that the non-federal entity “must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. These documented procurement procedures must be consistent with State, local, and tribal laws and regulations and the standards identified in §§ 200.317 through 200.327.” Condition: There was a lack of adequate documentation to support control activities were present. Specifically, the Municipality had no policies and procedures related to the administration of federal awards. Questioned Costs: None. Context: There were approximately 15 total disbursements totaling $1,031,467. Cause: The Municipality lacks formal internal controls and procedures related to the administration of federal awards. Effect: There is an increased risk that noncompliance with a federal award could occur and not be detected in a timely fashion. Recommendation: Management should establish proper policies and procedures which ensure that federal awards are adequately administered in accordance with program requirements. Management’s Response: Management concurs with the finding and has developed a plan to correct the issue. See corrective action plan. Status: This finding was not present in the prior audit year.