Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Name: Various Federal Award Year: July 1, 2021 ? June 30, 2022 Federal Assistance Listing Numbers: Various Criteria The Uniform Guidance Section 200.430 states that 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. Further, in accordance with 2 CFR 200.303(a), non-federal entities 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 During our testing of payroll allowability we noted 4 out of 71 payroll transactions tested were paid and charged to the grant incorrectly. Additionally, for 3 out of 71 payroll transactions the amount allocated to the grant was incorrect. The incorrect payments and allocations to grants were due to manual errors when processing payroll and related after the fact allocations to federal grants. We deemed this to be a material weakness in internal controls and noncompiance with the allowable costs compliance requirement. Our sample was not, and was not intended to be statistically valid. This finding is a repeat finding in the immediately prior audit finding 2021-003 Questioned Costs Unallowable payroll costs charged to the grants below FALN 12.300 $ 170 FALN 12.300 170 FALN 47.041 5,744 FALN 47.076 7 Total $ 6,091 Cause Manual calculations or clerical errors of the amount to be paid/and or allocated to the grant were made before being entered into the system. There was no secondary review of the calculation by someone other than the preparer.The University did not have an adequately designed internal control to identify calculation errors in applying payroll amounts to federal awards and as such, the amount of the errors and related non-compliance could have been greater and not detected by the University?s control environment. Effect Payroll amounts charged to federal grants are unsupported by actual time spent on the award and are thus unallowable. Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to review payroll authorization forms and manual calculations performed before the payroll allocation is recorded to the federal grant.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Name: Various Federal Award Year: July 1, 2021 ? June 30, 2022 Federal Assistance Listing Numbers: Various Criteria The Uniform Guidance Section 200.430 states that 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. Further, in accordance with 2 CFR 200.303(a), non-federal entities 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 During our testing of payroll allowability we noted 4 out of 71 payroll transactions tested were paid and charged to the grant incorrectly. Additionally, for 3 out of 71 payroll transactions the amount allocated to the grant was incorrect. The incorrect payments and allocations to grants were due to manual errors when processing payroll and related after the fact allocations to federal grants. We deemed this to be a material weakness in internal controls and noncompiance with the allowable costs compliance requirement. Our sample was not, and was not intended to be statistically valid. This finding is a repeat finding in the immediately prior audit finding 2021-003 Questioned Costs Unallowable payroll costs charged to the grants below FALN 12.300 $ 170 FALN 12.300 170 FALN 47.041 5,744 FALN 47.076 7 Total $ 6,091 Cause Manual calculations or clerical errors of the amount to be paid/and or allocated to the grant were made before being entered into the system. There was no secondary review of the calculation by someone other than the preparer.The University did not have an adequately designed internal control to identify calculation errors in applying payroll amounts to federal awards and as such, the amount of the errors and related non-compliance could have been greater and not detected by the University?s control environment. Effect Payroll amounts charged to federal grants are unsupported by actual time spent on the award and are thus unallowable. Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to review payroll authorization forms and manual calculations performed before the payroll allocation is recorded to the federal grant.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Name: Various Federal Award Year: July 1, 2021 ? June 30, 2022 Federal Assistance Listing Numbers: Various Criteria The Uniform Guidance Section 200.430 states that 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. Further, in accordance with 2 CFR 200.303(a), non-federal entities 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 During our testing of payroll allowability we noted 4 out of 71 payroll transactions tested were paid and charged to the grant incorrectly. Additionally, for 3 out of 71 payroll transactions the amount allocated to the grant was incorrect. The incorrect payments and allocations to grants were due to manual errors when processing payroll and related after the fact allocations to federal grants. We deemed this to be a material weakness in internal controls and noncompiance with the allowable costs compliance requirement. Our sample was not, and was not intended to be statistically valid. This finding is a repeat finding in the immediately prior audit finding 2021-003 Questioned Costs Unallowable payroll costs charged to the grants below FALN 12.300 $ 170 FALN 12.300 170 FALN 47.041 5,744 FALN 47.076 7 Total $ 6,091 Cause Manual calculations or clerical errors of the amount to be paid/and or allocated to the grant were made before being entered into the system. There was no secondary review of the calculation by someone other than the preparer.The University did not have an adequately designed internal control to identify calculation errors in applying payroll amounts to federal awards and as such, the amount of the errors and related non-compliance could have been greater and not detected by the University?s control environment. Effect Payroll amounts charged to federal grants are unsupported by actual time spent on the award and are thus unallowable. Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to review payroll authorization forms and manual calculations performed before the payroll allocation is recorded to the federal grant.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Name: Various Federal Award Year: July 1, 2021 ? June 30, 2022 Federal Assistance Listing Numbers: Various Criteria The Uniform Guidance Section 200.430 states that 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. Further, in accordance with 2 CFR 200.303(a), non-federal entities 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 During our testing of payroll allowability we noted 4 out of 71 payroll transactions tested were paid and charged to the grant incorrectly. Additionally, for 3 out of 71 payroll transactions the amount allocated to the grant was incorrect. The incorrect payments and allocations to grants were due to manual errors when processing payroll and related after the fact allocations to federal grants. We deemed this to be a material weakness in internal controls and noncompiance with the allowable costs compliance requirement. Our sample was not, and was not intended to be statistically valid. This finding is a repeat finding in the immediately prior audit finding 2021-003 Questioned Costs Unallowable payroll costs charged to the grants below FALN 12.300 $ 170 FALN 12.300 170 FALN 47.041 5,744 FALN 47.076 7 Total $ 6,091 Cause Manual calculations or clerical errors of the amount to be paid/and or allocated to the grant were made before being entered into the system. There was no secondary review of the calculation by someone other than the preparer.The University did not have an adequately designed internal control to identify calculation errors in applying payroll amounts to federal awards and as such, the amount of the errors and related non-compliance could have been greater and not detected by the University?s control environment. Effect Payroll amounts charged to federal grants are unsupported by actual time spent on the award and are thus unallowable. Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to review payroll authorization forms and manual calculations performed before the payroll allocation is recorded to the federal grant.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Name: Various Federal Award Year: July 1, 2021 ? June 30, 2022 Federal Assistance Listing Numbers: Various Criteria The Uniform Guidance Section 200.430 states that 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. Further, in accordance with 2 CFR 200.303(a), non-federal entities 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 During our testing of payroll allowability we noted 4 out of 71 payroll transactions tested were paid and charged to the grant incorrectly. Additionally, for 3 out of 71 payroll transactions the amount allocated to the grant was incorrect. The incorrect payments and allocations to grants were due to manual errors when processing payroll and related after the fact allocations to federal grants. We deemed this to be a material weakness in internal controls and noncompiance with the allowable costs compliance requirement. Our sample was not, and was not intended to be statistically valid. This finding is a repeat finding in the immediately prior audit finding 2021-003 Questioned Costs Unallowable payroll costs charged to the grants below FALN 12.300 $ 170 FALN 12.300 170 FALN 47.041 5,744 FALN 47.076 7 Total $ 6,091 Cause Manual calculations or clerical errors of the amount to be paid/and or allocated to the grant were made before being entered into the system. There was no secondary review of the calculation by someone other than the preparer.The University did not have an adequately designed internal control to identify calculation errors in applying payroll amounts to federal awards and as such, the amount of the errors and related non-compliance could have been greater and not detected by the University?s control environment. Effect Payroll amounts charged to federal grants are unsupported by actual time spent on the award and are thus unallowable. Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to review payroll authorization forms and manual calculations performed before the payroll allocation is recorded to the federal grant.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Name: Various Federal Award Year: July 1, 2021 ? June 30, 2022 Federal Assistance Listing Numbers: Various Criteria The Uniform Guidance Section 200.430 states that 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. Further, in accordance with 2 CFR 200.303(a), non-federal entities 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 During our testing of payroll allowability we noted 4 out of 71 payroll transactions tested were paid and charged to the grant incorrectly. Additionally, for 3 out of 71 payroll transactions the amount allocated to the grant was incorrect. The incorrect payments and allocations to grants were due to manual errors when processing payroll and related after the fact allocations to federal grants. We deemed this to be a material weakness in internal controls and noncompiance with the allowable costs compliance requirement. Our sample was not, and was not intended to be statistically valid. This finding is a repeat finding in the immediately prior audit finding 2021-003 Questioned Costs Unallowable payroll costs charged to the grants below FALN 12.300 $ 170 FALN 12.300 170 FALN 47.041 5,744 FALN 47.076 7 Total $ 6,091 Cause Manual calculations or clerical errors of the amount to be paid/and or allocated to the grant were made before being entered into the system. There was no secondary review of the calculation by someone other than the preparer.The University did not have an adequately designed internal control to identify calculation errors in applying payroll amounts to federal awards and as such, the amount of the errors and related non-compliance could have been greater and not detected by the University?s control environment. Effect Payroll amounts charged to federal grants are unsupported by actual time spent on the award and are thus unallowable. Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to review payroll authorization forms and manual calculations performed before the payroll allocation is recorded to the federal grant.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Name: Various Federal Award Year: July 1, 2021 ? June 30, 2022 Federal Assistance Listing Numbers: Various Criteria The Uniform Guidance Section 200.430 states that 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. Further, in accordance with 2 CFR 200.303(a), non-federal entities 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 During our testing of payroll allowability we noted 4 out of 71 payroll transactions tested were paid and charged to the grant incorrectly. Additionally, for 3 out of 71 payroll transactions the amount allocated to the grant was incorrect. The incorrect payments and allocations to grants were due to manual errors when processing payroll and related after the fact allocations to federal grants. We deemed this to be a material weakness in internal controls and noncompiance with the allowable costs compliance requirement. Our sample was not, and was not intended to be statistically valid. This finding is a repeat finding in the immediately prior audit finding 2021-003 Questioned Costs Unallowable payroll costs charged to the grants below FALN 12.300 $ 170 FALN 12.300 170 FALN 47.041 5,744 FALN 47.076 7 Total $ 6,091 Cause Manual calculations or clerical errors of the amount to be paid/and or allocated to the grant were made before being entered into the system. There was no secondary review of the calculation by someone other than the preparer.The University did not have an adequately designed internal control to identify calculation errors in applying payroll amounts to federal awards and as such, the amount of the errors and related non-compliance could have been greater and not detected by the University?s control environment. Effect Payroll amounts charged to federal grants are unsupported by actual time spent on the award and are thus unallowable. Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to review payroll authorization forms and manual calculations performed before the payroll allocation is recorded to the federal grant.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Name: Various Federal Award Year: July 1, 2021 ? June 30, 2022 Federal Assistance Listing Numbers: Various Criteria The Uniform Guidance Section 200.430 states that 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. Further, in accordance with 2 CFR 200.303(a), non-federal entities 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 During our testing of payroll allowability we noted 4 out of 71 payroll transactions tested were paid and charged to the grant incorrectly. Additionally, for 3 out of 71 payroll transactions the amount allocated to the grant was incorrect. The incorrect payments and allocations to grants were due to manual errors when processing payroll and related after the fact allocations to federal grants. We deemed this to be a material weakness in internal controls and noncompiance with the allowable costs compliance requirement. Our sample was not, and was not intended to be statistically valid. This finding is a repeat finding in the immediately prior audit finding 2021-003 Questioned Costs Unallowable payroll costs charged to the grants below FALN 12.300 $ 170 FALN 12.300 170 FALN 47.041 5,744 FALN 47.076 7 Total $ 6,091 Cause Manual calculations or clerical errors of the amount to be paid/and or allocated to the grant were made before being entered into the system. There was no secondary review of the calculation by someone other than the preparer.The University did not have an adequately designed internal control to identify calculation errors in applying payroll amounts to federal awards and as such, the amount of the errors and related non-compliance could have been greater and not detected by the University?s control environment. Effect Payroll amounts charged to federal grants are unsupported by actual time spent on the award and are thus unallowable. Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to review payroll authorization forms and manual calculations performed before the payroll allocation is recorded to the federal grant.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Name: Various Federal Award Year: July 1, 2021 ? June 30, 2022 Federal Assistance Listing Numbers: Various Criteria The Uniform Guidance Section 200.430 states that 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. Further, in accordance with 2 CFR 200.303(a), non-federal entities 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 During our testing of payroll allowability we noted 4 out of 71 payroll transactions tested were paid and charged to the grant incorrectly. Additionally, for 3 out of 71 payroll transactions the amount allocated to the grant was incorrect. The incorrect payments and allocations to grants were due to manual errors when processing payroll and related after the fact allocations to federal grants. We deemed this to be a material weakness in internal controls and noncompiance with the allowable costs compliance requirement. Our sample was not, and was not intended to be statistically valid. This finding is a repeat finding in the immediately prior audit finding 2021-003 Questioned Costs Unallowable payroll costs charged to the grants below FALN 12.300 $ 170 FALN 12.300 170 FALN 47.041 5,744 FALN 47.076 7 Total $ 6,091 Cause Manual calculations or clerical errors of the amount to be paid/and or allocated to the grant were made before being entered into the system. There was no secondary review of the calculation by someone other than the preparer.The University did not have an adequately designed internal control to identify calculation errors in applying payroll amounts to federal awards and as such, the amount of the errors and related non-compliance could have been greater and not detected by the University?s control environment. Effect Payroll amounts charged to federal grants are unsupported by actual time spent on the award and are thus unallowable. Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to review payroll authorization forms and manual calculations performed before the payroll allocation is recorded to the federal grant.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Name: Various Federal Award Year: July 1, 2021 ? June 30, 2022 Federal Assistance Listing Numbers: Various Criteria The Uniform Guidance Section 200.430 states that 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. Further, in accordance with 2 CFR 200.303(a), non-federal entities 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 During our testing of payroll allowability we noted 4 out of 71 payroll transactions tested were paid and charged to the grant incorrectly. Additionally, for 3 out of 71 payroll transactions the amount allocated to the grant was incorrect. The incorrect payments and allocations to grants were due to manual errors when processing payroll and related after the fact allocations to federal grants. We deemed this to be a material weakness in internal controls and noncompiance with the allowable costs compliance requirement. Our sample was not, and was not intended to be statistically valid. This finding is a repeat finding in the immediately prior audit finding 2021-003 Questioned Costs Unallowable payroll costs charged to the grants below FALN 12.300 $ 170 FALN 12.300 170 FALN 47.041 5,744 FALN 47.076 7 Total $ 6,091 Cause Manual calculations or clerical errors of the amount to be paid/and or allocated to the grant were made before being entered into the system. There was no secondary review of the calculation by someone other than the preparer.The University did not have an adequately designed internal control to identify calculation errors in applying payroll amounts to federal awards and as such, the amount of the errors and related non-compliance could have been greater and not detected by the University?s control environment. Effect Payroll amounts charged to federal grants are unsupported by actual time spent on the award and are thus unallowable. Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to review payroll authorization forms and manual calculations performed before the payroll allocation is recorded to the federal grant.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Name: Various Federal Award Year: July 1, 2021 ? June 30, 2022 Federal Assistance Listing Numbers: Various Criteria The Uniform Guidance Section 200.430 states that 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. Further, in accordance with 2 CFR 200.303(a), non-federal entities 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 During our testing of payroll allowability we noted 4 out of 71 payroll transactions tested were paid and charged to the grant incorrectly. Additionally, for 3 out of 71 payroll transactions the amount allocated to the grant was incorrect. The incorrect payments and allocations to grants were due to manual errors when processing payroll and related after the fact allocations to federal grants. We deemed this to be a material weakness in internal controls and noncompiance with the allowable costs compliance requirement. Our sample was not, and was not intended to be statistically valid. This finding is a repeat finding in the immediately prior audit finding 2021-003 Questioned Costs Unallowable payroll costs charged to the grants below FALN 12.300 $ 170 FALN 12.300 170 FALN 47.041 5,744 FALN 47.076 7 Total $ 6,091 Cause Manual calculations or clerical errors of the amount to be paid/and or allocated to the grant were made before being entered into the system. There was no secondary review of the calculation by someone other than the preparer.The University did not have an adequately designed internal control to identify calculation errors in applying payroll amounts to federal awards and as such, the amount of the errors and related non-compliance could have been greater and not detected by the University?s control environment. Effect Payroll amounts charged to federal grants are unsupported by actual time spent on the award and are thus unallowable. Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to review payroll authorization forms and manual calculations performed before the payroll allocation is recorded to the federal grant.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Name: Various Federal Award Year: July 1, 2021 ? June 30, 2022 Federal Assistance Listing Numbers: Various Criteria The Uniform Guidance Section 200.430 states that 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. Further, in accordance with 2 CFR 200.303(a), non-federal entities 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 During our testing of payroll allowability we noted 4 out of 71 payroll transactions tested were paid and charged to the grant incorrectly. Additionally, for 3 out of 71 payroll transactions the amount allocated to the grant was incorrect. The incorrect payments and allocations to grants were due to manual errors when processing payroll and related after the fact allocations to federal grants. We deemed this to be a material weakness in internal controls and noncompiance with the allowable costs compliance requirement. Our sample was not, and was not intended to be statistically valid. This finding is a repeat finding in the immediately prior audit finding 2021-003 Questioned Costs Unallowable payroll costs charged to the grants below FALN 12.300 $ 170 FALN 12.300 170 FALN 47.041 5,744 FALN 47.076 7 Total $ 6,091 Cause Manual calculations or clerical errors of the amount to be paid/and or allocated to the grant were made before being entered into the system. There was no secondary review of the calculation by someone other than the preparer.The University did not have an adequately designed internal control to identify calculation errors in applying payroll amounts to federal awards and as such, the amount of the errors and related non-compliance could have been greater and not detected by the University?s control environment. Effect Payroll amounts charged to federal grants are unsupported by actual time spent on the award and are thus unallowable. Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to review payroll authorization forms and manual calculations performed before the payroll allocation is recorded to the federal grant.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Name: Various Federal Award Year: July 1, 2021 ? June 30, 2022 Federal Assistance Listing Numbers: Various Criteria The Uniform Guidance Section 200.430 states that 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. Further, in accordance with 2 CFR 200.303(a), non-federal entities 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 During our testing of payroll allowability we noted 4 out of 71 payroll transactions tested were paid and charged to the grant incorrectly. Additionally, for 3 out of 71 payroll transactions the amount allocated to the grant was incorrect. The incorrect payments and allocations to grants were due to manual errors when processing payroll and related after the fact allocations to federal grants. We deemed this to be a material weakness in internal controls and noncompiance with the allowable costs compliance requirement. Our sample was not, and was not intended to be statistically valid. This finding is a repeat finding in the immediately prior audit finding 2021-003 Questioned Costs Unallowable payroll costs charged to the grants below FALN 12.300 $ 170 FALN 12.300 170 FALN 47.041 5,744 FALN 47.076 7 Total $ 6,091 Cause Manual calculations or clerical errors of the amount to be paid/and or allocated to the grant were made before being entered into the system. There was no secondary review of the calculation by someone other than the preparer.The University did not have an adequately designed internal control to identify calculation errors in applying payroll amounts to federal awards and as such, the amount of the errors and related non-compliance could have been greater and not detected by the University?s control environment. Effect Payroll amounts charged to federal grants are unsupported by actual time spent on the award and are thus unallowable. Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to review payroll authorization forms and manual calculations performed before the payroll allocation is recorded to the federal grant.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Name: Various Federal Award Year: July 1, 2021 ? June 30, 2022 Federal Assistance Listing Numbers: Various Criteria The Uniform Guidance Section 200.430 states that 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. Further, in accordance with 2 CFR 200.303(a), non-federal entities 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 During our testing of payroll allowability we noted 4 out of 71 payroll transactions tested were paid and charged to the grant incorrectly. Additionally, for 3 out of 71 payroll transactions the amount allocated to the grant was incorrect. The incorrect payments and allocations to grants were due to manual errors when processing payroll and related after the fact allocations to federal grants. We deemed this to be a material weakness in internal controls and noncompiance with the allowable costs compliance requirement. Our sample was not, and was not intended to be statistically valid. This finding is a repeat finding in the immediately prior audit finding 2021-003 Questioned Costs Unallowable payroll costs charged to the grants below FALN 12.300 $ 170 FALN 12.300 170 FALN 47.041 5,744 FALN 47.076 7 Total $ 6,091 Cause Manual calculations or clerical errors of the amount to be paid/and or allocated to the grant were made before being entered into the system. There was no secondary review of the calculation by someone other than the preparer.The University did not have an adequately designed internal control to identify calculation errors in applying payroll amounts to federal awards and as such, the amount of the errors and related non-compliance could have been greater and not detected by the University?s control environment. Effect Payroll amounts charged to federal grants are unsupported by actual time spent on the award and are thus unallowable. Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to review payroll authorization forms and manual calculations performed before the payroll allocation is recorded to the federal grant.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Name: Various Federal Award Year: July 1, 2021 ? June 30, 2022 Federal Assistance Listing Numbers: Various Criteria The Uniform Guidance Section 200.430 states that 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. Further, in accordance with 2 CFR 200.303(a), non-federal entities 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 During our testing of payroll allowability we noted 4 out of 71 payroll transactions tested were paid and charged to the grant incorrectly. Additionally, for 3 out of 71 payroll transactions the amount allocated to the grant was incorrect. The incorrect payments and allocations to grants were due to manual errors when processing payroll and related after the fact allocations to federal grants. We deemed this to be a material weakness in internal controls and noncompiance with the allowable costs compliance requirement. Our sample was not, and was not intended to be statistically valid. This finding is a repeat finding in the immediately prior audit finding 2021-003 Questioned Costs Unallowable payroll costs charged to the grants below FALN 12.300 $ 170 FALN 12.300 170 FALN 47.041 5,744 FALN 47.076 7 Total $ 6,091 Cause Manual calculations or clerical errors of the amount to be paid/and or allocated to the grant were made before being entered into the system. There was no secondary review of the calculation by someone other than the preparer.The University did not have an adequately designed internal control to identify calculation errors in applying payroll amounts to federal awards and as such, the amount of the errors and related non-compliance could have been greater and not detected by the University?s control environment. Effect Payroll amounts charged to federal grants are unsupported by actual time spent on the award and are thus unallowable. Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to review payroll authorization forms and manual calculations performed before the payroll allocation is recorded to the federal grant.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Name: Various Federal Award Year: July 1, 2021 ? June 30, 2022 Federal Assistance Listing Numbers: Various Criteria The Uniform Guidance Section 200.430 states that 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. Further, in accordance with 2 CFR 200.303(a), non-federal entities 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 During our testing of payroll allowability we noted 4 out of 71 payroll transactions tested were paid and charged to the grant incorrectly. Additionally, for 3 out of 71 payroll transactions the amount allocated to the grant was incorrect. The incorrect payments and allocations to grants were due to manual errors when processing payroll and related after the fact allocations to federal grants. We deemed this to be a material weakness in internal controls and noncompiance with the allowable costs compliance requirement. Our sample was not, and was not intended to be statistically valid. This finding is a repeat finding in the immediately prior audit finding 2021-003 Questioned Costs Unallowable payroll costs charged to the grants below FALN 12.300 $ 170 FALN 12.300 170 FALN 47.041 5,744 FALN 47.076 7 Total $ 6,091 Cause Manual calculations or clerical errors of the amount to be paid/and or allocated to the grant were made before being entered into the system. There was no secondary review of the calculation by someone other than the preparer.The University did not have an adequately designed internal control to identify calculation errors in applying payroll amounts to federal awards and as such, the amount of the errors and related non-compliance could have been greater and not detected by the University?s control environment. Effect Payroll amounts charged to federal grants are unsupported by actual time spent on the award and are thus unallowable. Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to review payroll authorization forms and manual calculations performed before the payroll allocation is recorded to the federal grant.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Name: Various Federal Award Year: July 1, 2021 ? June 30, 2022 Federal Assistance Listing Numbers: Various Criteria The Uniform Guidance Section 200.430 states that 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. Further, in accordance with 2 CFR 200.303(a), non-federal entities 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 During our testing of payroll allowability we noted 4 out of 71 payroll transactions tested were paid and charged to the grant incorrectly. Additionally, for 3 out of 71 payroll transactions the amount allocated to the grant was incorrect. The incorrect payments and allocations to grants were due to manual errors when processing payroll and related after the fact allocations to federal grants. We deemed this to be a material weakness in internal controls and noncompiance with the allowable costs compliance requirement. Our sample was not, and was not intended to be statistically valid. This finding is a repeat finding in the immediately prior audit finding 2021-003 Questioned Costs Unallowable payroll costs charged to the grants below FALN 12.300 $ 170 FALN 12.300 170 FALN 47.041 5,744 FALN 47.076 7 Total $ 6,091 Cause Manual calculations or clerical errors of the amount to be paid/and or allocated to the grant were made before being entered into the system. There was no secondary review of the calculation by someone other than the preparer.The University did not have an adequately designed internal control to identify calculation errors in applying payroll amounts to federal awards and as such, the amount of the errors and related non-compliance could have been greater and not detected by the University?s control environment. Effect Payroll amounts charged to federal grants are unsupported by actual time spent on the award and are thus unallowable. Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to review payroll authorization forms and manual calculations performed before the payroll allocation is recorded to the federal grant.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Name: Various Federal Award Year: July 1, 2021 ? June 30, 2022 Federal Assistance Listing Numbers: Various Criteria The Uniform Guidance Section 200.430 states that 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. Further, in accordance with 2 CFR 200.303(a), non-federal entities 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 During our testing of payroll allowability we noted 4 out of 71 payroll transactions tested were paid and charged to the grant incorrectly. Additionally, for 3 out of 71 payroll transactions the amount allocated to the grant was incorrect. The incorrect payments and allocations to grants were due to manual errors when processing payroll and related after the fact allocations to federal grants. We deemed this to be a material weakness in internal controls and noncompiance with the allowable costs compliance requirement. Our sample was not, and was not intended to be statistically valid. This finding is a repeat finding in the immediately prior audit finding 2021-003 Questioned Costs Unallowable payroll costs charged to the grants below FALN 12.300 $ 170 FALN 12.300 170 FALN 47.041 5,744 FALN 47.076 7 Total $ 6,091 Cause Manual calculations or clerical errors of the amount to be paid/and or allocated to the grant were made before being entered into the system. There was no secondary review of the calculation by someone other than the preparer.The University did not have an adequately designed internal control to identify calculation errors in applying payroll amounts to federal awards and as such, the amount of the errors and related non-compliance could have been greater and not detected by the University?s control environment. Effect Payroll amounts charged to federal grants are unsupported by actual time spent on the award and are thus unallowable. Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to review payroll authorization forms and manual calculations performed before the payroll allocation is recorded to the federal grant.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Name: Various Federal Award Year: July 1, 2021 ? June 30, 2022 Federal Assistance Listing Numbers: Various Criteria The Uniform Guidance Section 200.430 states that 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. Further, in accordance with 2 CFR 200.303(a), non-federal entities 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 During our testing of payroll allowability we noted 4 out of 71 payroll transactions tested were paid and charged to the grant incorrectly. Additionally, for 3 out of 71 payroll transactions the amount allocated to the grant was incorrect. The incorrect payments and allocations to grants were due to manual errors when processing payroll and related after the fact allocations to federal grants. We deemed this to be a material weakness in internal controls and noncompiance with the allowable costs compliance requirement. Our sample was not, and was not intended to be statistically valid. This finding is a repeat finding in the immediately prior audit finding 2021-003 Questioned Costs Unallowable payroll costs charged to the grants below FALN 12.300 $ 170 FALN 12.300 170 FALN 47.041 5,744 FALN 47.076 7 Total $ 6,091 Cause Manual calculations or clerical errors of the amount to be paid/and or allocated to the grant were made before being entered into the system. There was no secondary review of the calculation by someone other than the preparer.The University did not have an adequately designed internal control to identify calculation errors in applying payroll amounts to federal awards and as such, the amount of the errors and related non-compliance could have been greater and not detected by the University?s control environment. Effect Payroll amounts charged to federal grants are unsupported by actual time spent on the award and are thus unallowable. Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to review payroll authorization forms and manual calculations performed before the payroll allocation is recorded to the federal grant.
Finding 2022-002 Administration for Children and Families Federal Assistance Listing/CFDA #93.566, 2001SDRSOC, 10/01/2019 ? 9/30/2021 Federal Assistance Listing/CFDA #93.566, 2101SDRSSS, 10/01/2020 ? 9/30/2023 Refugee and Entrant Assistance ? State Administered Programs Allowable Costs / Costs Principles and Activities Allowed or Unallowed Significant Deficiency in Internal Control over Compliance Criteria: The Organization is required to have procedures in place to assure that federal awards are expended only for allowable costs in accordance with Subpart E ? Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Two instances were identified in which the manual federal time tracker, tracks federal and non-federal hours for employees, used to allocate employee?s time across federal awards, was not reviewed and approved prior to completion of monthly direct and indirect cost allocations based on staff time by federal award. Cause: There was a lapse in oversight of the internal control process ensuring federal time trackers were reviewed and approved prior to preparation of monthly direct and indirect cost allocation. Federal time tracker was not reviewed and approved by the employee supervisor in a timely manner. Effect: Lack of compliance with designed internal controls over review of federal time trackers could result in the Organization charging costs at an incorrect allocated rate to the federal award. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 30 payroll disbursements out of a total of approximately 1,286 salary disbursements were tested which accounted for $17,635 out of $407,446 of salary disbursements. In addition, a nonstatistical sample of 4 employee benefit disbursements out of a total of approximately 4,796 employee benefit disbursements were tested which accounts for $29 out of $78,993 of employee benefit disbursements. Repeat Finding from Prior Year: Yes, prior year finding 2021-002 Recommendation: We recommend that management review the process over approving federal time trackers to ensure staff time by grant is reviewed prior to preparation of direct and indirect allocations of expenses. View of Responsible Officials: Management is in agreement.
Finding 2022-003 Administration for Children and Families Federal Assistance Listing/CFDA #93.566, 1801SDRSOC, 10/01/2017 ? 9/30/2019 Federal Assistance Listing/CFDA #93.566, 2101SDRSSS, 10/01/2020 ? 9/30/2023 Federal Assistance Listing/CFDA #93.566, 2102SDRCMA, 10/01/2020 ? 9/30/2022 Federal Assistance Listing/CFDA #93.566, 2201SDRSSS, 10/01/2021 ? 9/30/2024 Federal Assistance Listing/CFDA #93.566, 2202SDRCMA, 10/01/2021 ? 9/30/2023 Refugee and Entrant Assistance ? State Administered Programs Reporting Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR Part 170 establishes requirements for recipients? reporting of information on subawards as required by the Federal Funding Accountability and Transparency Act of 2006 (FFATA). Condition: We noted the following during testing: a) FFATA report was filed outside the 30-day reporting requirement. Further, FFATA was submitted under the incorrect FAIN and no subaward ID was identified within the FFATA report. Additionally, no support to substantiate a secondary review was completed prior to submission of FFATA report. b) No support could be provided to substantiate a secondary review of two Federal Financial Reports (ORR2s). c) Two amounts reported within a programmatic report (ORR6) did not agree to supporting documentation. Cause: The USAspending.gov website did not provide the correct FAIN as an option when filing FFATA report. The Organization failed to attempt to troubleshoot the error, resulting in untimely submission of the report. In addition, the subrecipient agreement does not identify a subaward ID. Organization could not provide support to substantiate a secondary review of the Federal Financial Reports was completed prior to submission. Documentation used to prepare the programmatic report was not retained by management. Effect: Ineffective controls over this area of compliance could result in a reasonable possibility that the Organization would not be in compliance with the federal award as it relates to reporting. Questioned Costs: None reported Context/Sampling: Included under seven award letters of the federal program, four quarterly federal financial reports (SF-425s) and two quarterly federal financial reports (ORR2s) were reviewed in the Organization?s fiscal year. In addition, one final federal financial report and one semi-annual programmatic report was reviewed in the Organization?s fiscal year. A total of 20 reports were filed during the Organization?s fiscal year. The FFATA report for the only subrecipient who received funds through this program was tested. The quantity and subaward obligation errors were noted as follows: (see table in report) A nonstatistical sample of 8 reports were selected for testing out of a population of 21 reports required to be filed in the fiscal year. Repeat Finding from Prior Years: Yes, prior year finding 2021-004 Recommendation: We recommend that management review internal control procedures over reporting to ensure reports are submitted timely and ensure a documented secondary review and approval is completed prior to report submission. Views of Responsible Officials: Management is in agreement.
Finding 2022-004 Administration for Children and Families Federal Assistance Listing/CFDA #93.566, 2201SDRSSS, 10/01/2021 ? 9/30/2024 Refugee and Entrant Assistance ? State Administered Programs Subrecipient Monitoring Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.322 identifies the requirements for all pass-through entities which include the following: A. Evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring, B. Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with federal statues, regulations, and the terms and conditions of the subaward; and that the subaward performance goals are achieved. C. Verify that every subrecipient is audited as required by Subpart F ? Audit Requirements. Condition: The Organization could not provide support to substantiate a secondary review was completed over the evaluation of subrecipient?s risk of noncompliance. Cause: There was no documentation retained to support a secondary review was completed over the evaluation of subrecipient?s risk of noncompliance. Effect: Inadequate controls over this area of compliance including not retaining supporting documentation may make it difficult for the Organization to demonstrate the program is in compliance with laws, regulations, and other compliance requirements. Questioned Costs: None reported Context/Sampling: Only one subrecipient who received funds through this program was tested. Repeat Finding from Prior Years: Yes, prior year finding 2021-003 Recommendation: We recommend that management review the procedures and control processes over subrecipient monitoring to ensure a secondary review is formally documented related to the evaluation of subrecipient?s risk on noncompliance. View of Responsible Officials: Management is in agreement.
Finding 2022-005 Administration for Children and Families Federal Assistance Listing/CFDA #93.566, 2202SDRCMA, 10/01/2021 ? 9/30/2023 Refugee and Entrant Assistance ? State Administered Programs Eligibility Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: One instance was identified where two check copies were not retained within the case file to support the checks were received by the refugee family. Cause: Management?s internal review of the case file identified the check copies were missing from the case file; however, no steps were followed to ensure copies of checks with refugee signatures were obtained and retained within the case file. Effect: Case file documentation is incomplete to support the payments made to the refugee family were properly received. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 11 participant case files out of 75 participant case files were selected for testing. Repeat Finding from Prior Year: No Recommendation: We recommend that management review the process over eligibility and maintaining case file management be reviewed with applicable program employees to ensure they are aware of grant requirements. View of Responsible Officials: Management is in agreement.
FINDING 2022-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions - School Food Accounts Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions - School Food Accounts Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - School Food Accounts compliance requirements. During the audit period, the School Corporation made one transfer from the Foodservice fund (School Lunch fund). The transfer was related to a completed remodeling project on the cafeteria and kitchen at the middle school. Expenses for the remodeling project were initially paid from Fund 160 (Operating). However, on April 30, 2022, the School Corporation made a transfer in the amount of $300,000 from Fund 800 (School Lunch) to Fund 160 to cover a portion of the remodeling project expenses. Based on inquiry of the School Corporation, the original intent was for the project to paid jointly from the School Lunch fund and the Operating fund, with the School Lunch fund covering only equipment related expenditures. Documentation could not be provided to support this understanding, nor to show permission from the grantor agency, as required, to pay for a remodeling project from School Lunch funds. While price quotes for the equipment were provided, no additional supporting documentation, including invoices, of the expenditures paid could be provided. The above noted transfer was considered a questioned cost. The lack of internal controls and noncompliance were isolated to the transfer of funds described 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 20 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.452 states: "Costs incurred for utilities, insurance, security, necessary maintenance, janitorial services, repair, or upkeep of buildings and equipment (including Federal property unless otherwise provided for) which neither add to the permanent value of the property nor appreciably prolong its intended life, but keep it in an efficient operating condition, are allowable. Costs incurred for improvements which add to the permanent value of the buildings and equipment or appreciably prolong their intended life must be treated as capital expenditures (see ? 200.439). These costs are only allowable to the extent not paid through rental or other agreements." 2 CFR 200.407 states in part: "Under any given Federal award, the reasonableness and allocability of certain items of costs may be difficult to determine. In order to avoid subsequent disallowance or dispute based on unreasonableness or non-allocability, the non-Federal entity may seek the prior written approval of the cognizant agency for indirect costs or the Federal awarding agency in advance of the incurrence of special or unusual costs. Prior written approval should include the timeframe or scope of the agreement. The absence of prior written approval on any element of cost will not, in itself, affect the reasonableness or allocability of that element, unless prior approval is specifically required for allowability as described under certain circumstances in the following sections of this part: . . . (l) ? 200.439 Equipment and other capital expenditures; . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under ? 210.19(a) of this part. . . ." The USDA Food and Nutrition Service Guidance for State Agencies & School Food Authorities, page 16, states in part: ". . . Renovating a School Kitchen 2 CFR 200.452 (see below), Maintenance and repair costs, identifies costs of normal repairs and alterations as allowable so long as they: (1) keep property in an efficient operating condition; (2) do not add to the permanent value of the property or appreciably prolong its intended life; and (3) are not otherwise included in rental or other agreements. Based on these principles, FNS has allowed limited renovations within the inside perimeter of a kitchen/cafeteria space with the required prior State agency approval (2 CFR 200.407 or FNS approval (7 CFR 210.14(a)) . . ." Cause Management had not developed a system of internal control that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Special Tests and Provisions - School Food Accounts compliance requirements. INDIANA STATE BOARD OF ACCOUNTS 21 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Special Tests and Provisions - School Food Accounts compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Questioned costs were identified in the amount of $300,000 as described in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - School Food Accounts 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 2022-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions - School Food Accounts Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions - School Food Accounts Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - School Food Accounts compliance requirements. During the audit period, the School Corporation made one transfer from the Foodservice fund (School Lunch fund). The transfer was related to a completed remodeling project on the cafeteria and kitchen at the middle school. Expenses for the remodeling project were initially paid from Fund 160 (Operating). However, on April 30, 2022, the School Corporation made a transfer in the amount of $300,000 from Fund 800 (School Lunch) to Fund 160 to cover a portion of the remodeling project expenses. Based on inquiry of the School Corporation, the original intent was for the project to paid jointly from the School Lunch fund and the Operating fund, with the School Lunch fund covering only equipment related expenditures. Documentation could not be provided to support this understanding, nor to show permission from the grantor agency, as required, to pay for a remodeling project from School Lunch funds. While price quotes for the equipment were provided, no additional supporting documentation, including invoices, of the expenditures paid could be provided. The above noted transfer was considered a questioned cost. The lack of internal controls and noncompliance were isolated to the transfer of funds described 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 20 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.452 states: "Costs incurred for utilities, insurance, security, necessary maintenance, janitorial services, repair, or upkeep of buildings and equipment (including Federal property unless otherwise provided for) which neither add to the permanent value of the property nor appreciably prolong its intended life, but keep it in an efficient operating condition, are allowable. Costs incurred for improvements which add to the permanent value of the buildings and equipment or appreciably prolong their intended life must be treated as capital expenditures (see ? 200.439). These costs are only allowable to the extent not paid through rental or other agreements." 2 CFR 200.407 states in part: "Under any given Federal award, the reasonableness and allocability of certain items of costs may be difficult to determine. In order to avoid subsequent disallowance or dispute based on unreasonableness or non-allocability, the non-Federal entity may seek the prior written approval of the cognizant agency for indirect costs or the Federal awarding agency in advance of the incurrence of special or unusual costs. Prior written approval should include the timeframe or scope of the agreement. The absence of prior written approval on any element of cost will not, in itself, affect the reasonableness or allocability of that element, unless prior approval is specifically required for allowability as described under certain circumstances in the following sections of this part: . . . (l) ? 200.439 Equipment and other capital expenditures; . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under ? 210.19(a) of this part. . . ." The USDA Food and Nutrition Service Guidance for State Agencies & School Food Authorities, page 16, states in part: ". . . Renovating a School Kitchen 2 CFR 200.452 (see below), Maintenance and repair costs, identifies costs of normal repairs and alterations as allowable so long as they: (1) keep property in an efficient operating condition; (2) do not add to the permanent value of the property or appreciably prolong its intended life; and (3) are not otherwise included in rental or other agreements. Based on these principles, FNS has allowed limited renovations within the inside perimeter of a kitchen/cafeteria space with the required prior State agency approval (2 CFR 200.407 or FNS approval (7 CFR 210.14(a)) . . ." Cause Management had not developed a system of internal control that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Special Tests and Provisions - School Food Accounts compliance requirements. INDIANA STATE BOARD OF ACCOUNTS 21 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Special Tests and Provisions - School Food Accounts compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Questioned costs were identified in the amount of $300,000 as described in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - School Food Accounts 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 2022-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions - School Food Accounts Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions - School Food Accounts Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - School Food Accounts compliance requirements. During the audit period, the School Corporation made one transfer from the Foodservice fund (School Lunch fund). The transfer was related to a completed remodeling project on the cafeteria and kitchen at the middle school. Expenses for the remodeling project were initially paid from Fund 160 (Operating). However, on April 30, 2022, the School Corporation made a transfer in the amount of $300,000 from Fund 800 (School Lunch) to Fund 160 to cover a portion of the remodeling project expenses. Based on inquiry of the School Corporation, the original intent was for the project to paid jointly from the School Lunch fund and the Operating fund, with the School Lunch fund covering only equipment related expenditures. Documentation could not be provided to support this understanding, nor to show permission from the grantor agency, as required, to pay for a remodeling project from School Lunch funds. While price quotes for the equipment were provided, no additional supporting documentation, including invoices, of the expenditures paid could be provided. The above noted transfer was considered a questioned cost. The lack of internal controls and noncompliance were isolated to the transfer of funds described 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 20 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.452 states: "Costs incurred for utilities, insurance, security, necessary maintenance, janitorial services, repair, or upkeep of buildings and equipment (including Federal property unless otherwise provided for) which neither add to the permanent value of the property nor appreciably prolong its intended life, but keep it in an efficient operating condition, are allowable. Costs incurred for improvements which add to the permanent value of the buildings and equipment or appreciably prolong their intended life must be treated as capital expenditures (see ? 200.439). These costs are only allowable to the extent not paid through rental or other agreements." 2 CFR 200.407 states in part: "Under any given Federal award, the reasonableness and allocability of certain items of costs may be difficult to determine. In order to avoid subsequent disallowance or dispute based on unreasonableness or non-allocability, the non-Federal entity may seek the prior written approval of the cognizant agency for indirect costs or the Federal awarding agency in advance of the incurrence of special or unusual costs. Prior written approval should include the timeframe or scope of the agreement. The absence of prior written approval on any element of cost will not, in itself, affect the reasonableness or allocability of that element, unless prior approval is specifically required for allowability as described under certain circumstances in the following sections of this part: . . . (l) ? 200.439 Equipment and other capital expenditures; . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under ? 210.19(a) of this part. . . ." The USDA Food and Nutrition Service Guidance for State Agencies & School Food Authorities, page 16, states in part: ". . . Renovating a School Kitchen 2 CFR 200.452 (see below), Maintenance and repair costs, identifies costs of normal repairs and alterations as allowable so long as they: (1) keep property in an efficient operating condition; (2) do not add to the permanent value of the property or appreciably prolong its intended life; and (3) are not otherwise included in rental or other agreements. Based on these principles, FNS has allowed limited renovations within the inside perimeter of a kitchen/cafeteria space with the required prior State agency approval (2 CFR 200.407 or FNS approval (7 CFR 210.14(a)) . . ." Cause Management had not developed a system of internal control that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Special Tests and Provisions - School Food Accounts compliance requirements. INDIANA STATE BOARD OF ACCOUNTS 21 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Special Tests and Provisions - School Food Accounts compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Questioned costs were identified in the amount of $300,000 as described in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - School Food Accounts 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 2022-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions - School Food Accounts Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions - School Food Accounts Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - School Food Accounts compliance requirements. During the audit period, the School Corporation made one transfer from the Foodservice fund (School Lunch fund). The transfer was related to a completed remodeling project on the cafeteria and kitchen at the middle school. Expenses for the remodeling project were initially paid from Fund 160 (Operating). However, on April 30, 2022, the School Corporation made a transfer in the amount of $300,000 from Fund 800 (School Lunch) to Fund 160 to cover a portion of the remodeling project expenses. Based on inquiry of the School Corporation, the original intent was for the project to paid jointly from the School Lunch fund and the Operating fund, with the School Lunch fund covering only equipment related expenditures. Documentation could not be provided to support this understanding, nor to show permission from the grantor agency, as required, to pay for a remodeling project from School Lunch funds. While price quotes for the equipment were provided, no additional supporting documentation, including invoices, of the expenditures paid could be provided. The above noted transfer was considered a questioned cost. The lack of internal controls and noncompliance were isolated to the transfer of funds described 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 20 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.452 states: "Costs incurred for utilities, insurance, security, necessary maintenance, janitorial services, repair, or upkeep of buildings and equipment (including Federal property unless otherwise provided for) which neither add to the permanent value of the property nor appreciably prolong its intended life, but keep it in an efficient operating condition, are allowable. Costs incurred for improvements which add to the permanent value of the buildings and equipment or appreciably prolong their intended life must be treated as capital expenditures (see ? 200.439). These costs are only allowable to the extent not paid through rental or other agreements." 2 CFR 200.407 states in part: "Under any given Federal award, the reasonableness and allocability of certain items of costs may be difficult to determine. In order to avoid subsequent disallowance or dispute based on unreasonableness or non-allocability, the non-Federal entity may seek the prior written approval of the cognizant agency for indirect costs or the Federal awarding agency in advance of the incurrence of special or unusual costs. Prior written approval should include the timeframe or scope of the agreement. The absence of prior written approval on any element of cost will not, in itself, affect the reasonableness or allocability of that element, unless prior approval is specifically required for allowability as described under certain circumstances in the following sections of this part: . . . (l) ? 200.439 Equipment and other capital expenditures; . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under ? 210.19(a) of this part. . . ." The USDA Food and Nutrition Service Guidance for State Agencies & School Food Authorities, page 16, states in part: ". . . Renovating a School Kitchen 2 CFR 200.452 (see below), Maintenance and repair costs, identifies costs of normal repairs and alterations as allowable so long as they: (1) keep property in an efficient operating condition; (2) do not add to the permanent value of the property or appreciably prolong its intended life; and (3) are not otherwise included in rental or other agreements. Based on these principles, FNS has allowed limited renovations within the inside perimeter of a kitchen/cafeteria space with the required prior State agency approval (2 CFR 200.407 or FNS approval (7 CFR 210.14(a)) . . ." Cause Management had not developed a system of internal control that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Special Tests and Provisions - School Food Accounts compliance requirements. INDIANA STATE BOARD OF ACCOUNTS 21 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Special Tests and Provisions - School Food Accounts compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Questioned costs were identified in the amount of $300,000 as described in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - School Food Accounts 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 2022-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions - School Food Accounts Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions - School Food Accounts Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - School Food Accounts compliance requirements. During the audit period, the School Corporation made one transfer from the Foodservice fund (School Lunch fund). The transfer was related to a completed remodeling project on the cafeteria and kitchen at the middle school. Expenses for the remodeling project were initially paid from Fund 160 (Operating). However, on April 30, 2022, the School Corporation made a transfer in the amount of $300,000 from Fund 800 (School Lunch) to Fund 160 to cover a portion of the remodeling project expenses. Based on inquiry of the School Corporation, the original intent was for the project to paid jointly from the School Lunch fund and the Operating fund, with the School Lunch fund covering only equipment related expenditures. Documentation could not be provided to support this understanding, nor to show permission from the grantor agency, as required, to pay for a remodeling project from School Lunch funds. While price quotes for the equipment were provided, no additional supporting documentation, including invoices, of the expenditures paid could be provided. The above noted transfer was considered a questioned cost. The lack of internal controls and noncompliance were isolated to the transfer of funds described 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 20 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.452 states: "Costs incurred for utilities, insurance, security, necessary maintenance, janitorial services, repair, or upkeep of buildings and equipment (including Federal property unless otherwise provided for) which neither add to the permanent value of the property nor appreciably prolong its intended life, but keep it in an efficient operating condition, are allowable. Costs incurred for improvements which add to the permanent value of the buildings and equipment or appreciably prolong their intended life must be treated as capital expenditures (see ? 200.439). These costs are only allowable to the extent not paid through rental or other agreements." 2 CFR 200.407 states in part: "Under any given Federal award, the reasonableness and allocability of certain items of costs may be difficult to determine. In order to avoid subsequent disallowance or dispute based on unreasonableness or non-allocability, the non-Federal entity may seek the prior written approval of the cognizant agency for indirect costs or the Federal awarding agency in advance of the incurrence of special or unusual costs. Prior written approval should include the timeframe or scope of the agreement. The absence of prior written approval on any element of cost will not, in itself, affect the reasonableness or allocability of that element, unless prior approval is specifically required for allowability as described under certain circumstances in the following sections of this part: . . . (l) ? 200.439 Equipment and other capital expenditures; . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under ? 210.19(a) of this part. . . ." The USDA Food and Nutrition Service Guidance for State Agencies & School Food Authorities, page 16, states in part: ". . . Renovating a School Kitchen 2 CFR 200.452 (see below), Maintenance and repair costs, identifies costs of normal repairs and alterations as allowable so long as they: (1) keep property in an efficient operating condition; (2) do not add to the permanent value of the property or appreciably prolong its intended life; and (3) are not otherwise included in rental or other agreements. Based on these principles, FNS has allowed limited renovations within the inside perimeter of a kitchen/cafeteria space with the required prior State agency approval (2 CFR 200.407 or FNS approval (7 CFR 210.14(a)) . . ." Cause Management had not developed a system of internal control that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Special Tests and Provisions - School Food Accounts compliance requirements. INDIANA STATE BOARD OF ACCOUNTS 21 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Special Tests and Provisions - School Food Accounts compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Questioned costs were identified in the amount of $300,000 as described in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - School Food Accounts 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 2022-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions - School Food Accounts Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions - School Food Accounts Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - School Food Accounts compliance requirements. During the audit period, the School Corporation made one transfer from the Foodservice fund (School Lunch fund). The transfer was related to a completed remodeling project on the cafeteria and kitchen at the middle school. Expenses for the remodeling project were initially paid from Fund 160 (Operating). However, on April 30, 2022, the School Corporation made a transfer in the amount of $300,000 from Fund 800 (School Lunch) to Fund 160 to cover a portion of the remodeling project expenses. Based on inquiry of the School Corporation, the original intent was for the project to paid jointly from the School Lunch fund and the Operating fund, with the School Lunch fund covering only equipment related expenditures. Documentation could not be provided to support this understanding, nor to show permission from the grantor agency, as required, to pay for a remodeling project from School Lunch funds. While price quotes for the equipment were provided, no additional supporting documentation, including invoices, of the expenditures paid could be provided. The above noted transfer was considered a questioned cost. The lack of internal controls and noncompliance were isolated to the transfer of funds described 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 20 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.452 states: "Costs incurred for utilities, insurance, security, necessary maintenance, janitorial services, repair, or upkeep of buildings and equipment (including Federal property unless otherwise provided for) which neither add to the permanent value of the property nor appreciably prolong its intended life, but keep it in an efficient operating condition, are allowable. Costs incurred for improvements which add to the permanent value of the buildings and equipment or appreciably prolong their intended life must be treated as capital expenditures (see ? 200.439). These costs are only allowable to the extent not paid through rental or other agreements." 2 CFR 200.407 states in part: "Under any given Federal award, the reasonableness and allocability of certain items of costs may be difficult to determine. In order to avoid subsequent disallowance or dispute based on unreasonableness or non-allocability, the non-Federal entity may seek the prior written approval of the cognizant agency for indirect costs or the Federal awarding agency in advance of the incurrence of special or unusual costs. Prior written approval should include the timeframe or scope of the agreement. The absence of prior written approval on any element of cost will not, in itself, affect the reasonableness or allocability of that element, unless prior approval is specifically required for allowability as described under certain circumstances in the following sections of this part: . . . (l) ? 200.439 Equipment and other capital expenditures; . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under ? 210.19(a) of this part. . . ." The USDA Food and Nutrition Service Guidance for State Agencies & School Food Authorities, page 16, states in part: ". . . Renovating a School Kitchen 2 CFR 200.452 (see below), Maintenance and repair costs, identifies costs of normal repairs and alterations as allowable so long as they: (1) keep property in an efficient operating condition; (2) do not add to the permanent value of the property or appreciably prolong its intended life; and (3) are not otherwise included in rental or other agreements. Based on these principles, FNS has allowed limited renovations within the inside perimeter of a kitchen/cafeteria space with the required prior State agency approval (2 CFR 200.407 or FNS approval (7 CFR 210.14(a)) . . ." Cause Management had not developed a system of internal control that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Special Tests and Provisions - School Food Accounts compliance requirements. INDIANA STATE BOARD OF ACCOUNTS 21 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Special Tests and Provisions - School Food Accounts compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Questioned costs were identified in the amount of $300,000 as described in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - School Food Accounts 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 2022-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions - School Food Accounts Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions - School Food Accounts Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - School Food Accounts compliance requirements. During the audit period, the School Corporation made one transfer from the Foodservice fund (School Lunch fund). The transfer was related to a completed remodeling project on the cafeteria and kitchen at the middle school. Expenses for the remodeling project were initially paid from Fund 160 (Operating). However, on April 30, 2022, the School Corporation made a transfer in the amount of $300,000 from Fund 800 (School Lunch) to Fund 160 to cover a portion of the remodeling project expenses. Based on inquiry of the School Corporation, the original intent was for the project to paid jointly from the School Lunch fund and the Operating fund, with the School Lunch fund covering only equipment related expenditures. Documentation could not be provided to support this understanding, nor to show permission from the grantor agency, as required, to pay for a remodeling project from School Lunch funds. While price quotes for the equipment were provided, no additional supporting documentation, including invoices, of the expenditures paid could be provided. The above noted transfer was considered a questioned cost. The lack of internal controls and noncompliance were isolated to the transfer of funds described 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 20 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.452 states: "Costs incurred for utilities, insurance, security, necessary maintenance, janitorial services, repair, or upkeep of buildings and equipment (including Federal property unless otherwise provided for) which neither add to the permanent value of the property nor appreciably prolong its intended life, but keep it in an efficient operating condition, are allowable. Costs incurred for improvements which add to the permanent value of the buildings and equipment or appreciably prolong their intended life must be treated as capital expenditures (see ? 200.439). These costs are only allowable to the extent not paid through rental or other agreements." 2 CFR 200.407 states in part: "Under any given Federal award, the reasonableness and allocability of certain items of costs may be difficult to determine. In order to avoid subsequent disallowance or dispute based on unreasonableness or non-allocability, the non-Federal entity may seek the prior written approval of the cognizant agency for indirect costs or the Federal awarding agency in advance of the incurrence of special or unusual costs. Prior written approval should include the timeframe or scope of the agreement. The absence of prior written approval on any element of cost will not, in itself, affect the reasonableness or allocability of that element, unless prior approval is specifically required for allowability as described under certain circumstances in the following sections of this part: . . . (l) ? 200.439 Equipment and other capital expenditures; . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under ? 210.19(a) of this part. . . ." The USDA Food and Nutrition Service Guidance for State Agencies & School Food Authorities, page 16, states in part: ". . . Renovating a School Kitchen 2 CFR 200.452 (see below), Maintenance and repair costs, identifies costs of normal repairs and alterations as allowable so long as they: (1) keep property in an efficient operating condition; (2) do not add to the permanent value of the property or appreciably prolong its intended life; and (3) are not otherwise included in rental or other agreements. Based on these principles, FNS has allowed limited renovations within the inside perimeter of a kitchen/cafeteria space with the required prior State agency approval (2 CFR 200.407 or FNS approval (7 CFR 210.14(a)) . . ." Cause Management had not developed a system of internal control that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Special Tests and Provisions - School Food Accounts compliance requirements. INDIANA STATE BOARD OF ACCOUNTS 21 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Special Tests and Provisions - School Food Accounts compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Questioned costs were identified in the amount of $300,000 as described in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - School Food Accounts 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 2022-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions - School Food Accounts Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions - School Food Accounts Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - School Food Accounts compliance requirements. During the audit period, the School Corporation made one transfer from the Foodservice fund (School Lunch fund). The transfer was related to a completed remodeling project on the cafeteria and kitchen at the middle school. Expenses for the remodeling project were initially paid from Fund 160 (Operating). However, on April 30, 2022, the School Corporation made a transfer in the amount of $300,000 from Fund 800 (School Lunch) to Fund 160 to cover a portion of the remodeling project expenses. Based on inquiry of the School Corporation, the original intent was for the project to paid jointly from the School Lunch fund and the Operating fund, with the School Lunch fund covering only equipment related expenditures. Documentation could not be provided to support this understanding, nor to show permission from the grantor agency, as required, to pay for a remodeling project from School Lunch funds. While price quotes for the equipment were provided, no additional supporting documentation, including invoices, of the expenditures paid could be provided. The above noted transfer was considered a questioned cost. The lack of internal controls and noncompliance were isolated to the transfer of funds described 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 20 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.452 states: "Costs incurred for utilities, insurance, security, necessary maintenance, janitorial services, repair, or upkeep of buildings and equipment (including Federal property unless otherwise provided for) which neither add to the permanent value of the property nor appreciably prolong its intended life, but keep it in an efficient operating condition, are allowable. Costs incurred for improvements which add to the permanent value of the buildings and equipment or appreciably prolong their intended life must be treated as capital expenditures (see ? 200.439). These costs are only allowable to the extent not paid through rental or other agreements." 2 CFR 200.407 states in part: "Under any given Federal award, the reasonableness and allocability of certain items of costs may be difficult to determine. In order to avoid subsequent disallowance or dispute based on unreasonableness or non-allocability, the non-Federal entity may seek the prior written approval of the cognizant agency for indirect costs or the Federal awarding agency in advance of the incurrence of special or unusual costs. Prior written approval should include the timeframe or scope of the agreement. The absence of prior written approval on any element of cost will not, in itself, affect the reasonableness or allocability of that element, unless prior approval is specifically required for allowability as described under certain circumstances in the following sections of this part: . . . (l) ? 200.439 Equipment and other capital expenditures; . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under ? 210.19(a) of this part. . . ." The USDA Food and Nutrition Service Guidance for State Agencies & School Food Authorities, page 16, states in part: ". . . Renovating a School Kitchen 2 CFR 200.452 (see below), Maintenance and repair costs, identifies costs of normal repairs and alterations as allowable so long as they: (1) keep property in an efficient operating condition; (2) do not add to the permanent value of the property or appreciably prolong its intended life; and (3) are not otherwise included in rental or other agreements. Based on these principles, FNS has allowed limited renovations within the inside perimeter of a kitchen/cafeteria space with the required prior State agency approval (2 CFR 200.407 or FNS approval (7 CFR 210.14(a)) . . ." Cause Management had not developed a system of internal control that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Special Tests and Provisions - School Food Accounts compliance requirements. INDIANA STATE BOARD OF ACCOUNTS 21 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Special Tests and Provisions - School Food Accounts compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Questioned costs were identified in the amount of $300,000 as described in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - School Food Accounts 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 2022-004 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): S010A190014, S010A200014, S010A210014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Matching, Level of Effort, Earmarking compliance requirement. School Corporations with Title I grant awards exceeding $500,000 are required to set aside at least 1 percent of the total allocation for parental involvement. The School Corporation was not able to identify and provide for audit all of the parental involvement expenditures for the applicable audit period. The lack of internal controls and failure to maintain adequate supporting documentation were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 22 BEECH GROVE CITY 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). . . ." 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 23 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 20 USC 6313(c)(3) states in part: "(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. . . . (C) Homeless children and youths Funds reserved under subparagraph (A)(i) may be? . . . (ii) used to provide homeless children and youths with services not ordinarily provided to other students under this part, including providing? (I) funding for the liaison designated pursuant to section 11432(g)(1)(J)(ii) of title 42; and (II) transportation pursuant to section 11432(g)(1)(J)(iii) of such title." Cause Management had not developed a system of internal control that would have ensured compliance, or that supporting documentation would have been retained and made available for audit, related to the grant agreement and the Matching, Level of Effort, Earmarking compliance requirement. Effect The failure to establish an effective internal control system and retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure that documentation will be maintained and available for audit and to comply 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 2022-005 Subject: Title I Grants to Local Educational Agencies - Eligibility Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A190014, S010A200014, S010A210014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Eligibility compliance requirement. School Corporations with participating non-public school children were required to enter the total enrollment and poverty count children into the Title I application. This is to ensure the proper count of nonpublic students are reported to the Indiana Department of Education in order for participating non-public students to receive Title I services. The School Corporation had used the correct non-public school data when completing both Title I applications during the audit period. However, the total enrollment and poverty students at the non-public schools were incorrect for both years. 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). . . ." 34 CFR 200.64(a)(3)(i) states: "To obtain a count of private school children from low-income families who reside in participating public school attendance areas, the LEA may ? (A) Use the same poverty data the LEA uses to count public school children; (B) (1) Use comparable poverty data from a survey of families of private school students that, to the extent possible, protects the families' identity; and INDIANA STATE BOARD OF ACCOUNTS 25 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (2) Extrapolate data from the survey based on a representative sample if complete actual data are unavailable; (C) Use comparable poverty data from a different source, such as scholarship applications; (D) Apply the low-income percentage of each participating public school attendance area to the number of private school children who reside in that school attendance area; or (E) Use an equated measure of low income correlated with the measure of low income used to count public school children." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Eligibility compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Eligibility compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs No questioned costs were identified. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Eligibility compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: 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): S010A190014, S010A200014, S010A210014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Matching, Level of Effort, Earmarking compliance requirement. School Corporations with Title I grant awards exceeding $500,000 are required to set aside at least 1 percent of the total allocation for parental involvement. The School Corporation was not able to identify and provide for audit all of the parental involvement expenditures for the applicable audit period. The lack of internal controls and failure to maintain adequate supporting documentation were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 22 BEECH GROVE CITY 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). . . ." 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 23 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 20 USC 6313(c)(3) states in part: "(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. . . . (C) Homeless children and youths Funds reserved under subparagraph (A)(i) may be? . . . (ii) used to provide homeless children and youths with services not ordinarily provided to other students under this part, including providing? (I) funding for the liaison designated pursuant to section 11432(g)(1)(J)(ii) of title 42; and (II) transportation pursuant to section 11432(g)(1)(J)(iii) of such title." Cause Management had not developed a system of internal control that would have ensured compliance, or that supporting documentation would have been retained and made available for audit, related to the grant agreement and the Matching, Level of Effort, Earmarking compliance requirement. Effect The failure to establish an effective internal control system and retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure that documentation will be maintained and available for audit and to comply 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 2022-005 Subject: Title I Grants to Local Educational Agencies - Eligibility Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A190014, S010A200014, S010A210014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Eligibility compliance requirement. School Corporations with participating non-public school children were required to enter the total enrollment and poverty count children into the Title I application. This is to ensure the proper count of nonpublic students are reported to the Indiana Department of Education in order for participating non-public students to receive Title I services. The School Corporation had used the correct non-public school data when completing both Title I applications during the audit period. However, the total enrollment and poverty students at the non-public schools were incorrect for both years. 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). . . ." 34 CFR 200.64(a)(3)(i) states: "To obtain a count of private school children from low-income families who reside in participating public school attendance areas, the LEA may ? (A) Use the same poverty data the LEA uses to count public school children; (B) (1) Use comparable poverty data from a survey of families of private school students that, to the extent possible, protects the families' identity; and INDIANA STATE BOARD OF ACCOUNTS 25 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (2) Extrapolate data from the survey based on a representative sample if complete actual data are unavailable; (C) Use comparable poverty data from a different source, such as scholarship applications; (D) Apply the low-income percentage of each participating public school attendance area to the number of private school children who reside in that school attendance area; or (E) Use an equated measure of low income correlated with the measure of low income used to count public school children." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Eligibility compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Eligibility compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs No questioned costs were identified. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Eligibility compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Subject: COVID-19 - Education Stabilization Fund - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425D Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Material Weakness Condition and Context An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. INDIANA STATE BOARD OF ACCOUNTS 26 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The Business Manager reviewed each accounts payable voucher (APV) to ensure the expense was an allowable activity and adequately documented. If the claim was allowable and properly supported, the Business Manger signed the APV indicating approval. For 4 of 34 APVs tested, the Business Manager's approval was not present. The lack of internal controls was a systemic issue 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). . . ." Cause Management had not developed a system of internal control that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls 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 2022-007 Subject: COVID-19 - Education Stabilization Fund - Equipment Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. During fiscal year 2021-2022, the School Corporation purchased two buses totaling $182,486 with Education Stabilization funds. The two buses were included on a fleet listing; however, the listing did not include the federal award identification number (FAIN) or percentage of federal participation, who holds title, the acquisition date, the location, and the use and condition of the property. Additionally, the School Corporation did not complete a physical inventory of equipment within the last two years. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313 states in part: "The non-Federal entity must: . . . (d) Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: INDIANA STATE BOARD OF ACCOUNTS 28 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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. . . ." Cause Management had not developed a system of internal control that would have ensured compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management 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 control related to the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-008 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 29 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) annual Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared and submitted in JotForm, the online application used by the Indiana Department of Education to collect information, by the Business Manager without an oversight or review process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue 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). . . ." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control related to the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Subject: COVID-19 - Education Stabilization Fund - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425D Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Material Weakness Condition and Context An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. INDIANA STATE BOARD OF ACCOUNTS 26 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The Business Manager reviewed each accounts payable voucher (APV) to ensure the expense was an allowable activity and adequately documented. If the claim was allowable and properly supported, the Business Manger signed the APV indicating approval. For 4 of 34 APVs tested, the Business Manager's approval was not present. The lack of internal controls was a systemic issue 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). . . ." Cause Management had not developed a system of internal control that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls 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 2022-007 Subject: COVID-19 - Education Stabilization Fund - Equipment Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. During fiscal year 2021-2022, the School Corporation purchased two buses totaling $182,486 with Education Stabilization funds. The two buses were included on a fleet listing; however, the listing did not include the federal award identification number (FAIN) or percentage of federal participation, who holds title, the acquisition date, the location, and the use and condition of the property. Additionally, the School Corporation did not complete a physical inventory of equipment within the last two years. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313 states in part: "The non-Federal entity must: . . . (d) Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: INDIANA STATE BOARD OF ACCOUNTS 28 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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. . . ." Cause Management had not developed a system of internal control that would have ensured compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management 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 control related to the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-008 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 29 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) annual Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared and submitted in JotForm, the online application used by the Indiana Department of Education to collect information, by the Business Manager without an oversight or review process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue 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). . . ." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control related to the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Subject: COVID-19 - Education Stabilization Fund - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425D Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Material Weakness Condition and Context An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. INDIANA STATE BOARD OF ACCOUNTS 26 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The Business Manager reviewed each accounts payable voucher (APV) to ensure the expense was an allowable activity and adequately documented. If the claim was allowable and properly supported, the Business Manger signed the APV indicating approval. For 4 of 34 APVs tested, the Business Manager's approval was not present. The lack of internal controls was a systemic issue 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). . . ." Cause Management had not developed a system of internal control that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls 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 2022-007 Subject: COVID-19 - Education Stabilization Fund - Equipment Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. During fiscal year 2021-2022, the School Corporation purchased two buses totaling $182,486 with Education Stabilization funds. The two buses were included on a fleet listing; however, the listing did not include the federal award identification number (FAIN) or percentage of federal participation, who holds title, the acquisition date, the location, and the use and condition of the property. Additionally, the School Corporation did not complete a physical inventory of equipment within the last two years. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313 states in part: "The non-Federal entity must: . . . (d) Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: INDIANA STATE BOARD OF ACCOUNTS 28 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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. . . ." Cause Management had not developed a system of internal control that would have ensured compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management 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 control related to the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-008 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 29 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) annual Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared and submitted in JotForm, the online application used by the Indiana Department of Education to collect information, by the Business Manager without an oversight or review process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue 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). . . ." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control related to the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-007 Subject: COVID-19 - Education Stabilization Fund - Equipment Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. During fiscal year 2021-2022, the School Corporation purchased two buses totaling $182,486 with Education Stabilization funds. The two buses were included on a fleet listing; however, the listing did not include the federal award identification number (FAIN) or percentage of federal participation, who holds title, the acquisition date, the location, and the use and condition of the property. Additionally, the School Corporation did not complete a physical inventory of equipment within the last two years. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313 states in part: "The non-Federal entity must: . . . (d) Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: INDIANA STATE BOARD OF ACCOUNTS 28 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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. . . ." Cause Management had not developed a system of internal control that would have ensured compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management 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 control related to the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-008 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 29 BEECH GROVE CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) annual Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared and submitted in JotForm, the online application used by the Indiana Department of Education to collect information, by the Business Manager without an oversight or review process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue 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). . . ." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control related to the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Review And Approval Of The Schedule Of Expenditures Of Federal Awards (SEFA) - Significant Deficiency All Federal Programs Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The School should have a process in place to perform a review of the SEFA, to include evidence of the resolution of variances, as well as a process to document the overall review and approval to ensure proper presentation, completeness, and accuracy of the SEFA. Condition: During the course of the audit, the engagement team identified multiple instances where the SEFA was not accurately prepared and presented. Specifically, there were federal expenditures that were misclassified to the incorrect federal grant. The SEFA was corrected to correctly classify these expenses in the current year. The engagement team identified this as a pervasive deficiency impacting all schools, as the SEFA was prepared by the same management personnel. Cause: The entity does not have an appropriate process in place to review the SEFA, to include retaining evidence of the resolution of variances, as well as documentation of the overall review and approval. Effect: Potential misstatement could occur if expenditure amounts are not accurately presented on the SEFA. Questioned Costs: Not applicable. Context: Not applicable. Identification As A Repeat Finding: Yes. Recommendation: The School should develop a consistent process to review the SEFA. Issues identified during the course of the review should be investigated and resolved in a timely manner.
Review And Approval Of The Schedule Of Expenditures Of Federal Awards (SEFA) - Significant Deficiency All Federal Programs Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The School should have a process in place to perform a review of the SEFA, to include evidence of the resolution of variances, as well as a process to document the overall review and approval to ensure proper presentation, completeness, and accuracy of the SEFA. Condition: During the course of the audit, the engagement team identified multiple instances where the SEFA was not accurately prepared and presented. Specifically, there were federal expenditures that were misclassified to the incorrect federal grant. The SEFA was corrected to correctly classify these expenses in the current year. The engagement team identified this as a pervasive deficiency impacting all schools, as the SEFA was prepared by the same management personnel. Cause: The entity does not have an appropriate process in place to review the SEFA, to include retaining evidence of the resolution of variances, as well as documentation of the overall review and approval. Effect: Potential misstatement could occur if expenditure amounts are not accurately presented on the SEFA. Questioned Costs: Not applicable. Context: Not applicable. Identification As A Repeat Finding: Yes. Recommendation: The School should develop a consistent process to review the SEFA. Issues identified during the course of the review should be investigated and resolved in a timely manner.
Review And Approval Of The Schedule Of Expenditures Of Federal Awards (SEFA) - Significant Deficiency All Federal Programs Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The School should have a process in place to perform a review of the SEFA, to include evidence of the resolution of variances, as well as a process to document the overall review and approval to ensure proper presentation, completeness, and accuracy of the SEFA. Condition: During the course of the audit, the engagement team identified multiple instances where the SEFA was not accurately prepared and presented. Specifically, there were federal expenditures that were misclassified to the incorrect federal grant. The SEFA was corrected to correctly classify these expenses in the current year. The engagement team identified this as a pervasive deficiency impacting all schools, as the SEFA was prepared by the same management personnel. Cause: The entity does not have an appropriate process in place to review the SEFA, to include retaining evidence of the resolution of variances, as well as documentation of the overall review and approval. Effect: Potential misstatement could occur if expenditure amounts are not accurately presented on the SEFA. Questioned Costs: Not applicable. Context: Not applicable. Identification As A Repeat Finding: Yes. Recommendation: The School should develop a consistent process to review the SEFA. Issues identified during the course of the review should be investigated and resolved in a timely manner.
Approval Of Expense Reimbursement Submittals - Significant Deficiency - Activities Allowed Or Unallowed And Allowable Costs/Cost Principles ALNs 84.425/84.425C/84.425D/84.425U Elementary And Secondary School Emergency Relief Fund (ESSER) Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The School has an internal control in place that expense reimbursement submittals on federal grants be approved by School management prior to their submission to the state for reimbursement. Condition: During the course of the audit, the engagement team identified multiple expenditures where the support showing School management?s approval of the expense reimbursement submittal for federal grants was unable to be provided. Cause: The entity did not maintain sufficient support documentation to prove that expenditures were reviewed before expense reimbursement requests were submitted. Effect: Potential noncompliance could occur if expenditure amounts are not reviewed by School management for accuracy and completeness. Questioned Costs: Not applicable. Context: Not applicable. Identification As A Repeat Finding: Not applicable. Recommendation: The School should maintain proper documentation for all expense reimbursement submittals.