FINDING 2022-006 Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. The School Corporation had not designed, nor implemented a system of internal control to ensure that the wage rate requirements were met for a construction project. The School Corporation hired S L Electric to complete the work on the new HVAC system. The total amount of the project was $153,476. As a contract was not properly entered into between the School Corporation and S L Electric the required wage rate provisions, a contract clause, and certified payrolls, were not presented for audit. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in ? 5.1, the following clauses . . . (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (3) Payrolls and basic records. . . . (i) (A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). . . ." 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. . . ." Cause Management had not designed, nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements 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 Special Tests and Provisions - Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure new equipment was properly handled. The School Corporation paid for a HVAC system totaling $153,476 with Education Stabilization Funds. These assets were not added to a detailed listing of capital assets that would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and the use and condition of the property. In addition, a physical inventory had not been taken in the past two years and assets were not properly safeguarded and maintained. 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(d) states in part: "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: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. . . ." Cause Management had not designed nor implemented 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 have resulted in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the 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 2022-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place 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 reports were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, the GEER I, Year I and Year 2, and ESSER I, Year I reports were not supported by the School Corporation's records. One line item chosen for review and verification was determined to be incorrectly reported on each of these reports. 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 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not designed nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. The School Corporation had not designed, nor implemented a system of internal control to ensure that the wage rate requirements were met for a construction project. The School Corporation hired S L Electric to complete the work on the new HVAC system. The total amount of the project was $153,476. As a contract was not properly entered into between the School Corporation and S L Electric the required wage rate provisions, a contract clause, and certified payrolls, were not presented for audit. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in ? 5.1, the following clauses . . . (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (3) Payrolls and basic records. . . . (i) (A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). . . ." 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. . . ." Cause Management had not designed, nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements 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 Special Tests and Provisions - Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure new equipment was properly handled. The School Corporation paid for a HVAC system totaling $153,476 with Education Stabilization Funds. These assets were not added to a detailed listing of capital assets that would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and the use and condition of the property. In addition, a physical inventory had not been taken in the past two years and assets were not properly safeguarded and maintained. 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(d) states in part: "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: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. . . ." Cause Management had not designed nor implemented 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 have resulted in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the 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 2022-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place 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 reports were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, the GEER I, Year I and Year 2, and ESSER I, Year I reports were not supported by the School Corporation's records. One line item chosen for review and verification was determined to be incorrectly reported on each of these reports. 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 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not designed nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. The School Corporation had not designed, nor implemented a system of internal control to ensure that the wage rate requirements were met for a construction project. The School Corporation hired S L Electric to complete the work on the new HVAC system. The total amount of the project was $153,476. As a contract was not properly entered into between the School Corporation and S L Electric the required wage rate provisions, a contract clause, and certified payrolls, were not presented for audit. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in ? 5.1, the following clauses . . . (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (3) Payrolls and basic records. . . . (i) (A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). . . ." 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. . . ." Cause Management had not designed, nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements 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 Special Tests and Provisions - Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure new equipment was properly handled. The School Corporation paid for a HVAC system totaling $153,476 with Education Stabilization Funds. These assets were not added to a detailed listing of capital assets that would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and the use and condition of the property. In addition, a physical inventory had not been taken in the past two years and assets were not properly safeguarded and maintained. 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(d) states in part: "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: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. . . ." Cause Management had not designed nor implemented 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 have resulted in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the 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 2022-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place 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 reports were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, the GEER I, Year I and Year 2, and ESSER I, Year I reports were not supported by the School Corporation's records. One line item chosen for review and verification was determined to be incorrectly reported on each of these reports. 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 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not designed nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. The School Corporation had not designed, nor implemented a system of internal control to ensure that the wage rate requirements were met for a construction project. The School Corporation hired S L Electric to complete the work on the new HVAC system. The total amount of the project was $153,476. As a contract was not properly entered into between the School Corporation and S L Electric the required wage rate provisions, a contract clause, and certified payrolls, were not presented for audit. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in ? 5.1, the following clauses . . . (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (3) Payrolls and basic records. . . . (i) (A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). . . ." 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. . . ." Cause Management had not designed, nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements 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 Special Tests and Provisions - Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure new equipment was properly handled. The School Corporation paid for a HVAC system totaling $153,476 with Education Stabilization Funds. These assets were not added to a detailed listing of capital assets that would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and the use and condition of the property. In addition, a physical inventory had not been taken in the past two years and assets were not properly safeguarded and maintained. 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(d) states in part: "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: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. . . ." Cause Management had not designed nor implemented 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 have resulted in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the 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 2022-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place 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 reports were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, the GEER I, Year I and Year 2, and ESSER I, Year I reports were not supported by the School Corporation's records. One line item chosen for review and verification was determined to be incorrectly reported on each of these reports. 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 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not designed nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. The School Corporation had not designed, nor implemented a system of internal control to ensure that the wage rate requirements were met for a construction project. The School Corporation hired S L Electric to complete the work on the new HVAC system. The total amount of the project was $153,476. As a contract was not properly entered into between the School Corporation and S L Electric the required wage rate provisions, a contract clause, and certified payrolls, were not presented for audit. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in ? 5.1, the following clauses . . . (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (3) Payrolls and basic records. . . . (i) (A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). . . ." 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. . . ." Cause Management had not designed, nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements 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 Special Tests and Provisions - Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Assistance Listing Number, Federal Agency, and Program Name - 21.023, U.S. Department of the Treasury, COVID-19 - Emergency Rental Assistance Program Federal Award Identification Number and Year - ERA0415, 2022 Pass through Entity - Michigan State Housing Development Authority Finding Type - Significant deficiency Repeat Finding - Yes Prior Year Refence Number - 2021-001 Criteria -Per 2 CFR 200.303, an entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The federal award agreement includes specific allowable costs calculated in accordance with the U.S. Treasury guidance. Condition - Controls in place did not identify an inaccurate calculation of assistance. Questioned Costs - $250 Identification of How Questioned Costs Were Computed - Questioned costs were computed based on the difference between the rental assistance payment disbursed and the rental assistance payment calculated in accordance with the U.S. Treasury guidance. Context - Out of a sample of 60 assistance case numbers selected for allowability testing, 1 sample was not properly calculated in accordance with the U.S. Treasury guidance. The inaccurate calculation caused an overpayment in rental assistance charged to the program. A demand for repayment was issued for the $250 overpayment. Cause and Effect - While the Organization had procedures in place to review the rental assistance calculations, management's review did not prevent an inaccurate assistance payment. As a result, the Organization disbursed an amount that was not calculated in accordance with the U.S. Treasury guidance. Recommendation - We recommend the Organization review its procedures and controls to ensure calcuations of eligible expenses are performed accurately. Views of Responsible Officials and Corrective Action Plan - While all cases processed by Case Managers were quality reviewed by a team from CLA (an outsourced professional services firm specializing in grants management), documentation provided by tenants and/or landlords may not always have been clear and therefore interpreted differently by each reviewing party. Throughout the course of the grant, we continued to meet twice weekly in an effort to keep all of the Case Managers up to speed with the regularly changing guidance and documentation requirements. The corrective action plan in response to Finding 2021-001 was implemented on September 23, 2022; and therefore the fiscal year ended June 30, 2022 was complete before implementation of the corrective action plan, which is as follows: Case Managers, Quality Review and Agency Managers can see supporting documentation and review cases in real time. All cases are processed by Case Managers, who consult with Agency Managers on questions, and 100 percent of cases are quality reviewed by a team from CLA prior to processing payment. As Heart of West Michigan United Way receives MSHDA written guidance updates, we continue to hold twice-weekly meetings with CERA Agency Managers to discuss the frequent changes to the MSHDA guidance in order to gain a full understanding of the program requirements and regulations. Information is then disseminated to Case Managers. We will continue to hold regular trainings for CERA Case Managers to ensure consistency in approach and understanding of required documentation and proper assistance calculation. CLA continues to conduct a quality review check of 100 percent of applications to enhance internal controls and oversight. Additionally, the CERA Program Manager completes random checks of assistance calculations and payments.
Assistance Listing Number, Federal Agency, and Program Name - 21.023, U.S. Department of the Treasury, COVID-19 - Emergency Rental Assistance Program Federal Award Identification Number and Year - ERA0415, 2022 Pass through Entity - Michigan State Housing Development Authority Finding Type - Significant deficiency Repeat Finding - Yes Prior Year Refence Number - 2021-001 Criteria -Per 2 CFR 200.303, an entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The federal award agreement includes specific allowable costs calculated in accordance with the U.S. Treasury guidance. Condition - Controls in place did not identify an inaccurate calculation of assistance. Questioned Costs - $250 Identification of How Questioned Costs Were Computed - Questioned costs were computed based on the difference between the rental assistance payment disbursed and the rental assistance payment calculated in accordance with the U.S. Treasury guidance. Context - Out of a sample of 60 assistance case numbers selected for allowability testing, 1 sample was not properly calculated in accordance with the U.S. Treasury guidance. The inaccurate calculation caused an overpayment in rental assistance charged to the program. A demand for repayment was issued for the $250 overpayment. Cause and Effect - While the Organization had procedures in place to review the rental assistance calculations, management's review did not prevent an inaccurate assistance payment. As a result, the Organization disbursed an amount that was not calculated in accordance with the U.S. Treasury guidance. Recommendation - We recommend the Organization review its procedures and controls to ensure calcuations of eligible expenses are performed accurately. Views of Responsible Officials and Corrective Action Plan - While all cases processed by Case Managers were quality reviewed by a team from CLA (an outsourced professional services firm specializing in grants management), documentation provided by tenants and/or landlords may not always have been clear and therefore interpreted differently by each reviewing party. Throughout the course of the grant, we continued to meet twice weekly in an effort to keep all of the Case Managers up to speed with the regularly changing guidance and documentation requirements. The corrective action plan in response to Finding 2021-001 was implemented on September 23, 2022; and therefore the fiscal year ended June 30, 2022 was complete before implementation of the corrective action plan, which is as follows: Case Managers, Quality Review and Agency Managers can see supporting documentation and review cases in real time. All cases are processed by Case Managers, who consult with Agency Managers on questions, and 100 percent of cases are quality reviewed by a team from CLA prior to processing payment. As Heart of West Michigan United Way receives MSHDA written guidance updates, we continue to hold twice-weekly meetings with CERA Agency Managers to discuss the frequent changes to the MSHDA guidance in order to gain a full understanding of the program requirements and regulations. Information is then disseminated to Case Managers. We will continue to hold regular trainings for CERA Case Managers to ensure consistency in approach and understanding of required documentation and proper assistance calculation. CLA continues to conduct a quality review check of 100 percent of applications to enhance internal controls and oversight. Additionally, the CERA Program Manager completes random checks of assistance calculations and payments.
2022-007 - FINDING - Insufficient Controls over Payroll Charged to a Research Grant Federal Agency: National Institute of Health Assistance Listing Number: 93.397 Program Names and Award Numbers: Cancer Centers Support Grants (The Chicago Cancer Health Equity Collaborative a/k/a ChicagoCHEC), U54CA202995 Program Expenditures: $1,083,258 Questioned Costs: None Northeastern Illinois University (University) did not pay an employee for the time worked on a grant for a 3-month period when the employee worked those hours. During the testing of 60 expenditures selected from various research and development grants, we noted one (2%) expenditure tested for allowability was for retroactive pay to an employee originally only paid half of the hours worked on a grant for a 3-month period. The employee?s reported work hours were adjusted between periods to match available funding under the assumption that additional funding would be secured in a timely manner. The sample was not intended to be, and was not, a statistically valid sample. Uniform Guidance (2 CFR 200.430(i)) states charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. In accordance with Department of Labor regulations implementing the Fair Labor Standards Act (FLSA) (29 CFR part 516), charges for the salaries and wages of nonexempt employees must also be supported by records indicating the total number of hours worked each day. Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards establish and maintain effective internal control designed to reasonably ensure compliance with Federal laws, statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that all allowability policies are followed. University officials stated there was a significant delay by the funding agency in approving the usage of unspent grant funds from a prior period due to a delay in accepting the final financial status report for the previous grant period resulting in the University creating the payroll situation above. University?s response to delays in securing funding to pay employee resulted in costs being paid and charged to the grant in the wrong time periods. (Finding Code No. 2022-007). RECOMMENDATION - We recommend the University ensure procedures for payroll charges for employees are always for the actual hours worked within a given pay period according to the applicable regulations. UNIVERSITY RESPONSE - The University agrees with the recommendation.
2022-006 -FINDING - Insufficient Controls over Expenses Charged to TRIO Grant Federal Agency: Department of Education Assistance Listing Number: 84.042 Program Names and Award Numbers: TRIO ? Student Support Services, P042A200421 Program Expenditures: $809,380 Questioned Costs: $19,174 Northeastern Illinois University (University) charged unallowable expenditures to the Federal TRIO Program (TRIO) - Student Support Services grant During the testing of 40 expenditures selected from all of the TRIO grants, we noted one (3%) expenditure from the TRIO Student Support Services grant was an unallowable direct cost. It was for a legal settlement of $17,500 paid to an employee plus directly associated costs of $1,674. There was no approval request sent to the Department of Education. The sample was not intended to be, and was not, a statistically valid sample. Uniform Guidance (2 CFR 200.441) state that costs resulting from non-Federal entity violations of, alleged violations of, or failure to comply with, Federal, state, tribal, local or foreign laws and regulations are unallowable, except when incurred as a result of compliance with specific provisions of the Federal award, or with prior written approval of the Federal awarding agency. Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards establish and maintain effective internal control designed to reasonably ensure compliance with Federal laws, statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that all allowability policies are followed. University officials stated, there was inadequate communication between the departments involved. Failure to adequately review costs allowable under the uniform guidance principles resulted in the University overstating expenditures charged to the grant. (Finding Code No. 2022-006) RECOMMENDATION - We recommend the University ensure costs charged to grants are allowable under the Uniform Guidance. UNIVERSITY?S RESPONSE - The University agrees with the recommendation.
2022-005 - FINDING - Noncompliance with Grant Report Requirements Federal Agency: Department of Education Assistance Listing Numbers: 84.425 Program Names and Award Numbers: Education Stabilization Fund Under the Coronavirus Aid, Relief, And Economic Security Act [COVID-19 Higher Education Emergency Relief Fund: MSI Portion (P425L200096)); COVID-19 Higher Education Emergency Relief Fund: Institution Portion (P425F200852); COVID-19 Higher Education Emergency Relief Fund: Student Portion (P425E201821); and COVID-19 Governor's Emergency Education Relief Fund (21GEERNEIU)] Program Expenditures: $18,210,693 Questioned Costs: None Northeastern Illinois University (University) did not have adequate procedures in place to ensure the Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) reporting requirements were submitted accurately and timely. During our testing of the University?s compliance with the grant reporting requirements for HEERF, we noted the University did not review the required reports to ensure accuracy and compliance with the reporting requirements of the grant agreement. We noted the following: Four of 4 (100%) Quarterly Public Reports for the Student Aid portion were not correctly completed. The reports were missing 3 of the 7 requirements. The missing requirements were items 1, 4 and 5 described below. The Federal Register Document No. 2020-19041 released on August 31, 2020 directs each HEERF - Student Portion participating institutions to post the following information on the institution?s primary website no later than 10 days after the end of each calendar quarter (September 30, and December 31, March 31, June 30) thereafter: 1) an acknowledgement that the institution signed and returned to the Department of Education (Department) the Certification and Agreement and the assurance that the institution has used, or intends to use, no less than 50 percent of the funds; 2) the total amount of funds that the institution will receive or has received from the Department; 3) the total amount of grants distributed to students; 4) the estimated total number of students at the institution eligible to participate and receive the grant; 5) the total number of students who have received the grant; 6) the method(s) used by the institution to determine which students receive the grant and how they would receive; and, 7) any instructions, directions or guidance provided by the institution to students concerning the grant. Three out of 8 (38%) Quarterly Public Reports were posted to the University website 1 day late in one instance and not posted to the University?s website in two instances. The Department of Education Quarterly Budget and Expenditure Reporting Form requires the University to post the Quarterly Public Reports covering each quarterly reporting period (September 30, December 31, March 31, June 30), no later than 10 days after the end of each calendar quarter. Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards establish and maintain effective internal control designed to reasonably ensure compliance with Federal laws, statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that all earmarking requirements are reviewed to ensure compliance. University officials stated required reports were not timely and accurately submitted due to turnover within the University resulting in staffing constraints. Failure to meet grant reporting requirements is noncompliance with federal regulations and could result in loss of grant funding in future years. (Finding Code No. 2022-005, 2021-008, 2020-011) RECOMMENDATION - We recommend the University improve its grant reporting and monitoring process to adhere with grant request for proposal and application agreement. UNIVERSITY RESPONSE - The University agrees with the recommendation.
2022-005 - FINDING - Noncompliance with Grant Report Requirements Federal Agency: Department of Education Assistance Listing Numbers: 84.425 Program Names and Award Numbers: Education Stabilization Fund Under the Coronavirus Aid, Relief, And Economic Security Act [COVID-19 Higher Education Emergency Relief Fund: MSI Portion (P425L200096)); COVID-19 Higher Education Emergency Relief Fund: Institution Portion (P425F200852); COVID-19 Higher Education Emergency Relief Fund: Student Portion (P425E201821); and COVID-19 Governor's Emergency Education Relief Fund (21GEERNEIU)] Program Expenditures: $18,210,693 Questioned Costs: None Northeastern Illinois University (University) did not have adequate procedures in place to ensure the Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) reporting requirements were submitted accurately and timely. During our testing of the University?s compliance with the grant reporting requirements for HEERF, we noted the University did not review the required reports to ensure accuracy and compliance with the reporting requirements of the grant agreement. We noted the following: Four of 4 (100%) Quarterly Public Reports for the Student Aid portion were not correctly completed. The reports were missing 3 of the 7 requirements. The missing requirements were items 1, 4 and 5 described below. The Federal Register Document No. 2020-19041 released on August 31, 2020 directs each HEERF - Student Portion participating institutions to post the following information on the institution?s primary website no later than 10 days after the end of each calendar quarter (September 30, and December 31, March 31, June 30) thereafter: 1) an acknowledgement that the institution signed and returned to the Department of Education (Department) the Certification and Agreement and the assurance that the institution has used, or intends to use, no less than 50 percent of the funds; 2) the total amount of funds that the institution will receive or has received from the Department; 3) the total amount of grants distributed to students; 4) the estimated total number of students at the institution eligible to participate and receive the grant; 5) the total number of students who have received the grant; 6) the method(s) used by the institution to determine which students receive the grant and how they would receive; and, 7) any instructions, directions or guidance provided by the institution to students concerning the grant. Three out of 8 (38%) Quarterly Public Reports were posted to the University website 1 day late in one instance and not posted to the University?s website in two instances. The Department of Education Quarterly Budget and Expenditure Reporting Form requires the University to post the Quarterly Public Reports covering each quarterly reporting period (September 30, December 31, March 31, June 30), no later than 10 days after the end of each calendar quarter. Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards establish and maintain effective internal control designed to reasonably ensure compliance with Federal laws, statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that all earmarking requirements are reviewed to ensure compliance. University officials stated required reports were not timely and accurately submitted due to turnover within the University resulting in staffing constraints. Failure to meet grant reporting requirements is noncompliance with federal regulations and could result in loss of grant funding in future years. (Finding Code No. 2022-005, 2021-008, 2020-011) RECOMMENDATION - We recommend the University improve its grant reporting and monitoring process to adhere with grant request for proposal and application agreement. UNIVERSITY RESPONSE - The University agrees with the recommendation.
2022-005 - FINDING - Noncompliance with Grant Report Requirements Federal Agency: Department of Education Assistance Listing Numbers: 84.425 Program Names and Award Numbers: Education Stabilization Fund Under the Coronavirus Aid, Relief, And Economic Security Act [COVID-19 Higher Education Emergency Relief Fund: MSI Portion (P425L200096)); COVID-19 Higher Education Emergency Relief Fund: Institution Portion (P425F200852); COVID-19 Higher Education Emergency Relief Fund: Student Portion (P425E201821); and COVID-19 Governor's Emergency Education Relief Fund (21GEERNEIU)] Program Expenditures: $18,210,693 Questioned Costs: None Northeastern Illinois University (University) did not have adequate procedures in place to ensure the Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) reporting requirements were submitted accurately and timely. During our testing of the University?s compliance with the grant reporting requirements for HEERF, we noted the University did not review the required reports to ensure accuracy and compliance with the reporting requirements of the grant agreement. We noted the following: Four of 4 (100%) Quarterly Public Reports for the Student Aid portion were not correctly completed. The reports were missing 3 of the 7 requirements. The missing requirements were items 1, 4 and 5 described below. The Federal Register Document No. 2020-19041 released on August 31, 2020 directs each HEERF - Student Portion participating institutions to post the following information on the institution?s primary website no later than 10 days after the end of each calendar quarter (September 30, and December 31, March 31, June 30) thereafter: 1) an acknowledgement that the institution signed and returned to the Department of Education (Department) the Certification and Agreement and the assurance that the institution has used, or intends to use, no less than 50 percent of the funds; 2) the total amount of funds that the institution will receive or has received from the Department; 3) the total amount of grants distributed to students; 4) the estimated total number of students at the institution eligible to participate and receive the grant; 5) the total number of students who have received the grant; 6) the method(s) used by the institution to determine which students receive the grant and how they would receive; and, 7) any instructions, directions or guidance provided by the institution to students concerning the grant. Three out of 8 (38%) Quarterly Public Reports were posted to the University website 1 day late in one instance and not posted to the University?s website in two instances. The Department of Education Quarterly Budget and Expenditure Reporting Form requires the University to post the Quarterly Public Reports covering each quarterly reporting period (September 30, December 31, March 31, June 30), no later than 10 days after the end of each calendar quarter. Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards establish and maintain effective internal control designed to reasonably ensure compliance with Federal laws, statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that all earmarking requirements are reviewed to ensure compliance. University officials stated required reports were not timely and accurately submitted due to turnover within the University resulting in staffing constraints. Failure to meet grant reporting requirements is noncompliance with federal regulations and could result in loss of grant funding in future years. (Finding Code No. 2022-005, 2021-008, 2020-011) RECOMMENDATION - We recommend the University improve its grant reporting and monitoring process to adhere with grant request for proposal and application agreement. UNIVERSITY RESPONSE - The University agrees with the recommendation.
2022-005 - FINDING - Noncompliance with Grant Report Requirements Federal Agency: Department of Education Assistance Listing Numbers: 84.425 Program Names and Award Numbers: Education Stabilization Fund Under the Coronavirus Aid, Relief, And Economic Security Act [COVID-19 Higher Education Emergency Relief Fund: MSI Portion (P425L200096)); COVID-19 Higher Education Emergency Relief Fund: Institution Portion (P425F200852); COVID-19 Higher Education Emergency Relief Fund: Student Portion (P425E201821); and COVID-19 Governor's Emergency Education Relief Fund (21GEERNEIU)] Program Expenditures: $18,210,693 Questioned Costs: None Northeastern Illinois University (University) did not have adequate procedures in place to ensure the Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) reporting requirements were submitted accurately and timely. During our testing of the University?s compliance with the grant reporting requirements for HEERF, we noted the University did not review the required reports to ensure accuracy and compliance with the reporting requirements of the grant agreement. We noted the following: Four of 4 (100%) Quarterly Public Reports for the Student Aid portion were not correctly completed. The reports were missing 3 of the 7 requirements. The missing requirements were items 1, 4 and 5 described below. The Federal Register Document No. 2020-19041 released on August 31, 2020 directs each HEERF - Student Portion participating institutions to post the following information on the institution?s primary website no later than 10 days after the end of each calendar quarter (September 30, and December 31, March 31, June 30) thereafter: 1) an acknowledgement that the institution signed and returned to the Department of Education (Department) the Certification and Agreement and the assurance that the institution has used, or intends to use, no less than 50 percent of the funds; 2) the total amount of funds that the institution will receive or has received from the Department; 3) the total amount of grants distributed to students; 4) the estimated total number of students at the institution eligible to participate and receive the grant; 5) the total number of students who have received the grant; 6) the method(s) used by the institution to determine which students receive the grant and how they would receive; and, 7) any instructions, directions or guidance provided by the institution to students concerning the grant. Three out of 8 (38%) Quarterly Public Reports were posted to the University website 1 day late in one instance and not posted to the University?s website in two instances. The Department of Education Quarterly Budget and Expenditure Reporting Form requires the University to post the Quarterly Public Reports covering each quarterly reporting period (September 30, December 31, March 31, June 30), no later than 10 days after the end of each calendar quarter. Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards establish and maintain effective internal control designed to reasonably ensure compliance with Federal laws, statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that all earmarking requirements are reviewed to ensure compliance. University officials stated required reports were not timely and accurately submitted due to turnover within the University resulting in staffing constraints. Failure to meet grant reporting requirements is noncompliance with federal regulations and could result in loss of grant funding in future years. (Finding Code No. 2022-005, 2021-008, 2020-011) RECOMMENDATION - We recommend the University improve its grant reporting and monitoring process to adhere with grant request for proposal and application agreement. UNIVERSITY RESPONSE - The University agrees with the recommendation.
2022-005 - FINDING - Noncompliance with Grant Report Requirements Federal Agency: Department of Education Assistance Listing Numbers: 84.425 Program Names and Award Numbers: Education Stabilization Fund Under the Coronavirus Aid, Relief, And Economic Security Act [COVID-19 Higher Education Emergency Relief Fund: MSI Portion (P425L200096)); COVID-19 Higher Education Emergency Relief Fund: Institution Portion (P425F200852); COVID-19 Higher Education Emergency Relief Fund: Student Portion (P425E201821); and COVID-19 Governor's Emergency Education Relief Fund (21GEERNEIU)] Program Expenditures: $18,210,693 Questioned Costs: None Northeastern Illinois University (University) did not have adequate procedures in place to ensure the Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) reporting requirements were submitted accurately and timely. During our testing of the University?s compliance with the grant reporting requirements for HEERF, we noted the University did not review the required reports to ensure accuracy and compliance with the reporting requirements of the grant agreement. We noted the following: Four of 4 (100%) Quarterly Public Reports for the Student Aid portion were not correctly completed. The reports were missing 3 of the 7 requirements. The missing requirements were items 1, 4 and 5 described below. The Federal Register Document No. 2020-19041 released on August 31, 2020 directs each HEERF - Student Portion participating institutions to post the following information on the institution?s primary website no later than 10 days after the end of each calendar quarter (September 30, and December 31, March 31, June 30) thereafter: 1) an acknowledgement that the institution signed and returned to the Department of Education (Department) the Certification and Agreement and the assurance that the institution has used, or intends to use, no less than 50 percent of the funds; 2) the total amount of funds that the institution will receive or has received from the Department; 3) the total amount of grants distributed to students; 4) the estimated total number of students at the institution eligible to participate and receive the grant; 5) the total number of students who have received the grant; 6) the method(s) used by the institution to determine which students receive the grant and how they would receive; and, 7) any instructions, directions or guidance provided by the institution to students concerning the grant. Three out of 8 (38%) Quarterly Public Reports were posted to the University website 1 day late in one instance and not posted to the University?s website in two instances. The Department of Education Quarterly Budget and Expenditure Reporting Form requires the University to post the Quarterly Public Reports covering each quarterly reporting period (September 30, December 31, March 31, June 30), no later than 10 days after the end of each calendar quarter. Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards establish and maintain effective internal control designed to reasonably ensure compliance with Federal laws, statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that all earmarking requirements are reviewed to ensure compliance. University officials stated required reports were not timely and accurately submitted due to turnover within the University resulting in staffing constraints. Failure to meet grant reporting requirements is noncompliance with federal regulations and could result in loss of grant funding in future years. (Finding Code No. 2022-005, 2021-008, 2020-011) RECOMMENDATION - We recommend the University improve its grant reporting and monitoring process to adhere with grant request for proposal and application agreement. UNIVERSITY RESPONSE - The University agrees with the recommendation.
2022-005 - FINDING - Noncompliance with Grant Report Requirements Federal Agency: Department of Education Assistance Listing Numbers: 84.425 Program Names and Award Numbers: Education Stabilization Fund Under the Coronavirus Aid, Relief, And Economic Security Act [COVID-19 Higher Education Emergency Relief Fund: MSI Portion (P425L200096)); COVID-19 Higher Education Emergency Relief Fund: Institution Portion (P425F200852); COVID-19 Higher Education Emergency Relief Fund: Student Portion (P425E201821); and COVID-19 Governor's Emergency Education Relief Fund (21GEERNEIU)] Program Expenditures: $18,210,693 Questioned Costs: None Northeastern Illinois University (University) did not have adequate procedures in place to ensure the Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) reporting requirements were submitted accurately and timely. During our testing of the University?s compliance with the grant reporting requirements for HEERF, we noted the University did not review the required reports to ensure accuracy and compliance with the reporting requirements of the grant agreement. We noted the following: Four of 4 (100%) Quarterly Public Reports for the Student Aid portion were not correctly completed. The reports were missing 3 of the 7 requirements. The missing requirements were items 1, 4 and 5 described below. The Federal Register Document No. 2020-19041 released on August 31, 2020 directs each HEERF - Student Portion participating institutions to post the following information on the institution?s primary website no later than 10 days after the end of each calendar quarter (September 30, and December 31, March 31, June 30) thereafter: 1) an acknowledgement that the institution signed and returned to the Department of Education (Department) the Certification and Agreement and the assurance that the institution has used, or intends to use, no less than 50 percent of the funds; 2) the total amount of funds that the institution will receive or has received from the Department; 3) the total amount of grants distributed to students; 4) the estimated total number of students at the institution eligible to participate and receive the grant; 5) the total number of students who have received the grant; 6) the method(s) used by the institution to determine which students receive the grant and how they would receive; and, 7) any instructions, directions or guidance provided by the institution to students concerning the grant. Three out of 8 (38%) Quarterly Public Reports were posted to the University website 1 day late in one instance and not posted to the University?s website in two instances. The Department of Education Quarterly Budget and Expenditure Reporting Form requires the University to post the Quarterly Public Reports covering each quarterly reporting period (September 30, December 31, March 31, June 30), no later than 10 days after the end of each calendar quarter. Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards establish and maintain effective internal control designed to reasonably ensure compliance with Federal laws, statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that all earmarking requirements are reviewed to ensure compliance. University officials stated required reports were not timely and accurately submitted due to turnover within the University resulting in staffing constraints. Failure to meet grant reporting requirements is noncompliance with federal regulations and could result in loss of grant funding in future years. (Finding Code No. 2022-005, 2021-008, 2020-011) RECOMMENDATION - We recommend the University improve its grant reporting and monitoring process to adhere with grant request for proposal and application agreement. UNIVERSITY RESPONSE - The University agrees with the recommendation.
Noncompliance and Material Weakness 2 CFR ? 400.1 gives regulatory effect for the U. S. Department of Agriculture to the Office of Management and Budget guidance in subparts A through F of 2 CFR part 200, as supplemented by this part, as USDA policies and procedures for uniform administrative requirements, cost principles, and audit requirement for Federal awards. 2 CFR ? 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR ? 200.514(c) requires auditors to obtain an understanding of the non-Federal entity?s internal control over Federal programs sufficient to plan the audit to support a low assessed level of control risk of noncompliance for major programs, and, unless internal control is likely to be ineffective in preventing or detecting noncompliance, plan the testing of internal control over compliance for major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program and perform testing of internal control as planned. 7 CFR ? 210.7(c) states, in part, to be entitled to reimbursement under this part, each school food authority shall ensure that the Claims for Reimbursement . . . accurately reflects the number of lunches and meal supplements served to eligible children, and the school food authority shall, at a minimum: (iii) Base Claims for Reimbursement on lunch counts, taken daily at the point of service, which correctly identify the number of free, reduced price and paid lunches served to eligible children; (iv) Correctly record, consolidate and report those lunch and supplement counts on the Claim for Reimbursement; and (v) Ensure that Claims for Reimbursement do not request payment for any excess lunches produced, as prohibited in ? 210.10(a)(2), or non-Program lunches (i.e., a la carte or adult lunches) or for more than one meal supplement per child per day. 7 CFR ? 210.8(c) states the Claim for Reimbursement shall include data in sufficient detail to justify the reimbursement claimed and to enable the State agency to provide the Report of School Program Operations required under ?210.5(d) of this part. Such data shall include, at a minimum, the number of free, reduced price and paid lunches and meal supplements served to eligible children. The claim shall be signed by a school food authority official. Six out of twenty (30%) site claim forms submitted by the District to the Ohio Department of Education were inaccurate, since the District claimed more meals served than what was actually distributed. These errors occurred due to a weakness in internal controls, which failed to ensure site claim forms for reimbursable meals served at each building and submitted by the District to the Ohio Department of Education were entered correctly. Failure to properly report the number of eligible meals resulted in the District receiving unsubstantiated reimbursements totaling $4,823. The District should implement policies and procedures to help ensure that monthly site claim forms for all District buildings are reviewed and submitted to reflect actual counts for reimbursable meals served.
Noncompliance and Material Weakness 2 CFR ? 400.1 gives regulatory effect for the U. S. Department of Agriculture to the Office of Management and Budget guidance in subparts A through F of 2 CFR part 200, as supplemented by this part, as USDA policies and procedures for uniform administrative requirements, cost principles, and audit requirement for Federal awards. 2 CFR ? 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR ? 200.514(c) requires auditors to obtain an understanding of the non-Federal entity?s internal control over Federal programs sufficient to plan the audit to support a low assessed level of control risk of noncompliance for major programs, and, unless internal control is likely to be ineffective in preventing or detecting noncompliance, plan the testing of internal control over compliance for major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program and perform testing of internal control as planned. 7 CFR ? 210.7(c) states, in part, to be entitled to reimbursement under this part, each school food authority shall ensure that the Claims for Reimbursement . . . accurately reflects the number of lunches and meal supplements served to eligible children, and the school food authority shall, at a minimum: (iii) Base Claims for Reimbursement on lunch counts, taken daily at the point of service, which correctly identify the number of free, reduced price and paid lunches served to eligible children; (iv) Correctly record, consolidate and report those lunch and supplement counts on the Claim for Reimbursement; and (v) Ensure that Claims for Reimbursement do not request payment for any excess lunches produced, as prohibited in ? 210.10(a)(2), or non-Program lunches (i.e., a la carte or adult lunches) or for more than one meal supplement per child per day. 7 CFR ? 210.8(c) states the Claim for Reimbursement shall include data in sufficient detail to justify the reimbursement claimed and to enable the State agency to provide the Report of School Program Operations required under ?210.5(d) of this part. Such data shall include, at a minimum, the number of free, reduced price and paid lunches and meal supplements served to eligible children. The claim shall be signed by a school food authority official. Six out of twenty (30%) site claim forms submitted by the District to the Ohio Department of Education were inaccurate, since the District claimed more meals served than what was actually distributed. These errors occurred due to a weakness in internal controls, which failed to ensure site claim forms for reimbursable meals served at each building and submitted by the District to the Ohio Department of Education were entered correctly. Failure to properly report the number of eligible meals resulted in the District receiving unsubstantiated reimbursements totaling $4,823. The District should implement policies and procedures to help ensure that monthly site claim forms for all District buildings are reviewed and submitted to reflect actual counts for reimbursable meals served.
Noncompliance and Material Weakness 2 CFR ? 400.1 gives regulatory effect for the U. S. Department of Agriculture to the Office of Management and Budget guidance in subparts A through F of 2 CFR part 200, as supplemented by this part, as USDA policies and procedures for uniform administrative requirements, cost principles, and audit requirement for Federal awards. 2 CFR ? 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR ? 200.514(c) requires auditors to obtain an understanding of the non-Federal entity?s internal control over Federal programs sufficient to plan the audit to support a low assessed level of control risk of noncompliance for major programs, and, unless internal control is likely to be ineffective in preventing or detecting noncompliance, plan the testing of internal control over compliance for major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program and perform testing of internal control as planned. 7 CFR ? 210.7(c) states, in part, to be entitled to reimbursement under this part, each school food authority shall ensure that the Claims for Reimbursement . . . accurately reflects the number of lunches and meal supplements served to eligible children, and the school food authority shall, at a minimum: (iii) Base Claims for Reimbursement on lunch counts, taken daily at the point of service, which correctly identify the number of free, reduced price and paid lunches served to eligible children; (iv) Correctly record, consolidate and report those lunch and supplement counts on the Claim for Reimbursement; and (v) Ensure that Claims for Reimbursement do not request payment for any excess lunches produced, as prohibited in ? 210.10(a)(2), or non-Program lunches (i.e., a la carte or adult lunches) or for more than one meal supplement per child per day. 7 CFR ? 210.8(c) states the Claim for Reimbursement shall include data in sufficient detail to justify the reimbursement claimed and to enable the State agency to provide the Report of School Program Operations required under ?210.5(d) of this part. Such data shall include, at a minimum, the number of free, reduced price and paid lunches and meal supplements served to eligible children. The claim shall be signed by a school food authority official. Six out of twenty (30%) site claim forms submitted by the District to the Ohio Department of Education were inaccurate, since the District claimed more meals served than what was actually distributed. These errors occurred due to a weakness in internal controls, which failed to ensure site claim forms for reimbursable meals served at each building and submitted by the District to the Ohio Department of Education were entered correctly. Failure to properly report the number of eligible meals resulted in the District receiving unsubstantiated reimbursements totaling $4,823. The District should implement policies and procedures to help ensure that monthly site claim forms for all District buildings are reviewed and submitted to reflect actual counts for reimbursable meals served.
Noncompliance and Material Weakness 2 CFR ? 400.1 gives regulatory effect for the U. S. Department of Agriculture to the Office of Management and Budget guidance in subparts A through F of 2 CFR part 200, as supplemented by this part, as USDA policies and procedures for uniform administrative requirements, cost principles, and audit requirement for Federal awards. 2 CFR ? 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR ? 200.514(c) requires auditors to obtain an understanding of the non-Federal entity?s internal control over Federal programs sufficient to plan the audit to support a low assessed level of control risk of noncompliance for major programs, and, unless internal control is likely to be ineffective in preventing or detecting noncompliance, plan the testing of internal control over compliance for major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program and perform testing of internal control as planned. 7 CFR ? 210.7(c) states, in part, to be entitled to reimbursement under this part, each school food authority shall ensure that the Claims for Reimbursement . . . accurately reflects the number of lunches and meal supplements served to eligible children, and the school food authority shall, at a minimum: (iii) Base Claims for Reimbursement on lunch counts, taken daily at the point of service, which correctly identify the number of free, reduced price and paid lunches served to eligible children; (iv) Correctly record, consolidate and report those lunch and supplement counts on the Claim for Reimbursement; and (v) Ensure that Claims for Reimbursement do not request payment for any excess lunches produced, as prohibited in ? 210.10(a)(2), or non-Program lunches (i.e., a la carte or adult lunches) or for more than one meal supplement per child per day. 7 CFR ? 210.8(c) states the Claim for Reimbursement shall include data in sufficient detail to justify the reimbursement claimed and to enable the State agency to provide the Report of School Program Operations required under ?210.5(d) of this part. Such data shall include, at a minimum, the number of free, reduced price and paid lunches and meal supplements served to eligible children. The claim shall be signed by a school food authority official. Six out of twenty (30%) site claim forms submitted by the District to the Ohio Department of Education were inaccurate, since the District claimed more meals served than what was actually distributed. These errors occurred due to a weakness in internal controls, which failed to ensure site claim forms for reimbursable meals served at each building and submitted by the District to the Ohio Department of Education were entered correctly. Failure to properly report the number of eligible meals resulted in the District receiving unsubstantiated reimbursements totaling $4,823. The District should implement policies and procedures to help ensure that monthly site claim forms for all District buildings are reviewed and submitted to reflect actual counts for reimbursable meals served.
FINDING 2022-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Number and Year (or Other Identifying Number): FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion 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 Procurement and Suspension and Debarment compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 16 CHARLES A. BEARD MEMORIAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation did not properly procure one of seven vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The vendor was paid $72,780; however, a contract was not awarded as specified by Indiana code. As such, the School Corporation did not verify that the vendor was not excluded or disqualified from participation in federal assistance programs or activities. The lack of effective internal controls and noncompliance were isolated to the vendor noted above during fiscal year 2021-2022. 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 200.318(a) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non- Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. INDIANA STATE BOARD OF ACCOUNTS 17 CHARLES A. BEARD MEMORIAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases ? (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed a system of internal controls that would have ensured compliance with the compliance requirement listed above. Effect The failure to establish an effective internal controls system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Number and Year (or Other Identifying Number): FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion 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 Procurement and Suspension and Debarment compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 16 CHARLES A. BEARD MEMORIAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation did not properly procure one of seven vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The vendor was paid $72,780; however, a contract was not awarded as specified by Indiana code. As such, the School Corporation did not verify that the vendor was not excluded or disqualified from participation in federal assistance programs or activities. The lack of effective internal controls and noncompliance were isolated to the vendor noted above during fiscal year 2021-2022. 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 200.318(a) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non- Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. INDIANA STATE BOARD OF ACCOUNTS 17 CHARLES A. BEARD MEMORIAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases ? (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed a system of internal controls that would have ensured compliance with the compliance requirement listed above. Effect The failure to establish an effective internal controls system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Number and Year (or Other Identifying Number): FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion 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 Procurement and Suspension and Debarment compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 16 CHARLES A. BEARD MEMORIAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation did not properly procure one of seven vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The vendor was paid $72,780; however, a contract was not awarded as specified by Indiana code. As such, the School Corporation did not verify that the vendor was not excluded or disqualified from participation in federal assistance programs or activities. The lack of effective internal controls and noncompliance were isolated to the vendor noted above during fiscal year 2021-2022. 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 200.318(a) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non- Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. INDIANA STATE BOARD OF ACCOUNTS 17 CHARLES A. BEARD MEMORIAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases ? (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed a system of internal controls that would have ensured compliance with the compliance requirement listed above. Effect The failure to establish an effective internal controls system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2022-001 Finding: Special Tests - Wage Rate Requirements Federal Assistance Listing Number 84.425, 84.425D and 84.425C - COVID-19 Elementary and Secondary School Emergency Fund (ESSER) Passed-through Indiana Department of Education Award Numbers - 2021-2022; S425D200 013; S425U200 13; and S425C200 18 Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by Federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141?3144, 3146, and 3147). Non-Federal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the Non-Federal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). In addition, according to 2 CFR Part 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The School Corporation did not obtain certified payrolls for contractor or subcontractor work performed during the fiscal year ended June 30, 2022. Questioned Costs: Unknown. "Context: There were multiple construction projects charged to the grant during the year. Three of 23 contractors assigned to these projects were tested and the following was noted: - The School Corporation did not obtain any certified payrolls for the contractor and subcontractors tested." Effect: Certified Payrolls were not obtained or reviewed for the project so laborers and mechanics employed by contractors or subcontractors may not have been paid prevailing wage rates. Cause: The School Corporation was aware of the wage rate requirements as it applied to this grant; however they indicated to contractors and subcontractors that payroll information only need be submitted if requested. The School Corporation did not request this information. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the School Corporation implement a compliance review process over wage rate requirements, including facilities staff on-site weekly where projects are occurring to determine if work was completed towards the project, tracking certified payrolls or notification of no work performed and reviewing to help ensure wages are equal to or in excess of the prevailing wage rates. Views of Responsible Officials: Agree. See separate report for planned corrective actions.
2022-001 Finding: Special Tests - Wage Rate Requirements Federal Assistance Listing Number 84.425, 84.425D and 84.425C - COVID-19 Elementary and Secondary School Emergency Fund (ESSER) Passed-through Indiana Department of Education Award Numbers - 2021-2022; S425D200 013; S425U200 13; and S425C200 18 Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by Federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141?3144, 3146, and 3147). Non-Federal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the Non-Federal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). In addition, according to 2 CFR Part 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The School Corporation did not obtain certified payrolls for contractor or subcontractor work performed during the fiscal year ended June 30, 2022. Questioned Costs: Unknown. "Context: There were multiple construction projects charged to the grant during the year. Three of 23 contractors assigned to these projects were tested and the following was noted: - The School Corporation did not obtain any certified payrolls for the contractor and subcontractors tested." Effect: Certified Payrolls were not obtained or reviewed for the project so laborers and mechanics employed by contractors or subcontractors may not have been paid prevailing wage rates. Cause: The School Corporation was aware of the wage rate requirements as it applied to this grant; however they indicated to contractors and subcontractors that payroll information only need be submitted if requested. The School Corporation did not request this information. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the School Corporation implement a compliance review process over wage rate requirements, including facilities staff on-site weekly where projects are occurring to determine if work was completed towards the project, tracking certified payrolls or notification of no work performed and reviewing to help ensure wages are equal to or in excess of the prevailing wage rates. Views of Responsible Officials: Agree. See separate report for planned corrective actions.
2022-001 Finding: Special Tests - Wage Rate Requirements Federal Assistance Listing Number 84.425, 84.425D and 84.425C - COVID-19 Elementary and Secondary School Emergency Fund (ESSER) Passed-through Indiana Department of Education Award Numbers - 2021-2022; S425D200 013; S425U200 13; and S425C200 18 Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by Federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141?3144, 3146, and 3147). Non-Federal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the Non-Federal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). In addition, according to 2 CFR Part 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The School Corporation did not obtain certified payrolls for contractor or subcontractor work performed during the fiscal year ended June 30, 2022. Questioned Costs: Unknown. "Context: There were multiple construction projects charged to the grant during the year. Three of 23 contractors assigned to these projects were tested and the following was noted: - The School Corporation did not obtain any certified payrolls for the contractor and subcontractors tested." Effect: Certified Payrolls were not obtained or reviewed for the project so laborers and mechanics employed by contractors or subcontractors may not have been paid prevailing wage rates. Cause: The School Corporation was aware of the wage rate requirements as it applied to this grant; however they indicated to contractors and subcontractors that payroll information only need be submitted if requested. The School Corporation did not request this information. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the School Corporation implement a compliance review process over wage rate requirements, including facilities staff on-site weekly where projects are occurring to determine if work was completed towards the project, tracking certified payrolls or notification of no work performed and reviewing to help ensure wages are equal to or in excess of the prevailing wage rates. Views of Responsible Officials: Agree. See separate report for planned corrective actions.
2022-001 Finding: Special Tests - Wage Rate Requirements Federal Assistance Listing Number 84.425, 84.425D and 84.425C - COVID-19 Elementary and Secondary School Emergency Fund (ESSER) Passed-through Indiana Department of Education Award Numbers - 2021-2022; S425D200 013; S425U200 13; and S425C200 18 Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by Federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141?3144, 3146, and 3147). Non-Federal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the Non-Federal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). In addition, according to 2 CFR Part 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The School Corporation did not obtain certified payrolls for contractor or subcontractor work performed during the fiscal year ended June 30, 2022. Questioned Costs: Unknown. "Context: There were multiple construction projects charged to the grant during the year. Three of 23 contractors assigned to these projects were tested and the following was noted: - The School Corporation did not obtain any certified payrolls for the contractor and subcontractors tested." Effect: Certified Payrolls were not obtained or reviewed for the project so laborers and mechanics employed by contractors or subcontractors may not have been paid prevailing wage rates. Cause: The School Corporation was aware of the wage rate requirements as it applied to this grant; however they indicated to contractors and subcontractors that payroll information only need be submitted if requested. The School Corporation did not request this information. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the School Corporation implement a compliance review process over wage rate requirements, including facilities staff on-site weekly where projects are occurring to determine if work was completed towards the project, tracking certified payrolls or notification of no work performed and reviewing to help ensure wages are equal to or in excess of the prevailing wage rates. Views of Responsible Officials: Agree. See separate report for planned corrective actions.
2022-001 Finding: Special Tests - Wage Rate Requirements Federal Assistance Listing Number 84.425, 84.425D and 84.425C - COVID-19 Elementary and Secondary School Emergency Fund (ESSER) Passed-through Indiana Department of Education Award Numbers - 2021-2022; S425D200 013; S425U200 13; and S425C200 18 Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by Federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141?3144, 3146, and 3147). Non-Federal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the Non-Federal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). In addition, according to 2 CFR Part 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The School Corporation did not obtain certified payrolls for contractor or subcontractor work performed during the fiscal year ended June 30, 2022. Questioned Costs: Unknown. "Context: There were multiple construction projects charged to the grant during the year. Three of 23 contractors assigned to these projects were tested and the following was noted: - The School Corporation did not obtain any certified payrolls for the contractor and subcontractors tested." Effect: Certified Payrolls were not obtained or reviewed for the project so laborers and mechanics employed by contractors or subcontractors may not have been paid prevailing wage rates. Cause: The School Corporation was aware of the wage rate requirements as it applied to this grant; however they indicated to contractors and subcontractors that payroll information only need be submitted if requested. The School Corporation did not request this information. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the School Corporation implement a compliance review process over wage rate requirements, including facilities staff on-site weekly where projects are occurring to determine if work was completed towards the project, tracking certified payrolls or notification of no work performed and reviewing to help ensure wages are equal to or in excess of the prevailing wage rates. Views of Responsible Officials: Agree. See separate report for planned corrective actions.
Finding 2022-003 - Preparation of the SEFA Information on the Federal Program: All Federal programs Criteria or Specific Requirement: Title 2 CFR 200.508 ?Auditee Responsibilities? indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 ?Financial statements?). Title 2 CFR 200 Section 200.510 ?Financial Statements? requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non-Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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). Condition: The Aquarium did not appropriately identify and track its Federal expenditures incurred under direct and pass-through Federal awards during the year under audit. Cause: The Aquarium did not maintain appropriate internal controls to correctly identify and track awards provided from the federal government, including those received through pass through entities. Effect or Potential Effect: The Aquarium incurred expenditures in excess of the $750,000 threshold, requiring a Uniform Guidance compliance examination. Questioned Costs: None noted. Context: The SEFA must be prepared by the auditee (as described in ?Criteria? above). Identification as a Repeat Finding, if Applicable: This is not a repeat finding. Recommendation: We recommend that the Aquarium establish internal controls to correctly identify and track all Federal awards received either directly or indirectly. The expenditures incurred under direct and pass-through awards should be evaluated in aggregate periodically throughout the year (and at year-end) to determine if the Aquarium has reached the Uniform Guidance threshold. The Aquarium should ensure that the Uniform Guidance audit is completed, and the complete reporting package submitted to the Federal Audit Clearinghouse in advance of the reporting deadlines.
Finding 2022-003 - Preparation of the SEFA Information on the Federal Program: All Federal programs Criteria or Specific Requirement: Title 2 CFR 200.508 ?Auditee Responsibilities? indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 ?Financial statements?). Title 2 CFR 200 Section 200.510 ?Financial Statements? requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non-Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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). Condition: The Aquarium did not appropriately identify and track its Federal expenditures incurred under direct and pass-through Federal awards during the year under audit. Cause: The Aquarium did not maintain appropriate internal controls to correctly identify and track awards provided from the federal government, including those received through pass through entities. Effect or Potential Effect: The Aquarium incurred expenditures in excess of the $750,000 threshold, requiring a Uniform Guidance compliance examination. Questioned Costs: None noted. Context: The SEFA must be prepared by the auditee (as described in ?Criteria? above). Identification as a Repeat Finding, if Applicable: This is not a repeat finding. Recommendation: We recommend that the Aquarium establish internal controls to correctly identify and track all Federal awards received either directly or indirectly. The expenditures incurred under direct and pass-through awards should be evaluated in aggregate periodically throughout the year (and at year-end) to determine if the Aquarium has reached the Uniform Guidance threshold. The Aquarium should ensure that the Uniform Guidance audit is completed, and the complete reporting package submitted to the Federal Audit Clearinghouse in advance of the reporting deadlines.
Finding 2022-003 - Preparation of the SEFA Information on the Federal Program: All Federal programs Criteria or Specific Requirement: Title 2 CFR 200.508 ?Auditee Responsibilities? indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 ?Financial statements?). Title 2 CFR 200 Section 200.510 ?Financial Statements? requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non-Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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). Condition: The Aquarium did not appropriately identify and track its Federal expenditures incurred under direct and pass-through Federal awards during the year under audit. Cause: The Aquarium did not maintain appropriate internal controls to correctly identify and track awards provided from the federal government, including those received through pass through entities. Effect or Potential Effect: The Aquarium incurred expenditures in excess of the $750,000 threshold, requiring a Uniform Guidance compliance examination. Questioned Costs: None noted. Context: The SEFA must be prepared by the auditee (as described in ?Criteria? above). Identification as a Repeat Finding, if Applicable: This is not a repeat finding. Recommendation: We recommend that the Aquarium establish internal controls to correctly identify and track all Federal awards received either directly or indirectly. The expenditures incurred under direct and pass-through awards should be evaluated in aggregate periodically throughout the year (and at year-end) to determine if the Aquarium has reached the Uniform Guidance threshold. The Aquarium should ensure that the Uniform Guidance audit is completed, and the complete reporting package submitted to the Federal Audit Clearinghouse in advance of the reporting deadlines.
Finding 2022-003 - Preparation of the SEFA Information on the Federal Program: All Federal programs Criteria or Specific Requirement: Title 2 CFR 200.508 ?Auditee Responsibilities? indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 ?Financial statements?). Title 2 CFR 200 Section 200.510 ?Financial Statements? requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non-Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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). Condition: The Aquarium did not appropriately identify and track its Federal expenditures incurred under direct and pass-through Federal awards during the year under audit. Cause: The Aquarium did not maintain appropriate internal controls to correctly identify and track awards provided from the federal government, including those received through pass through entities. Effect or Potential Effect: The Aquarium incurred expenditures in excess of the $750,000 threshold, requiring a Uniform Guidance compliance examination. Questioned Costs: None noted. Context: The SEFA must be prepared by the auditee (as described in ?Criteria? above). Identification as a Repeat Finding, if Applicable: This is not a repeat finding. Recommendation: We recommend that the Aquarium establish internal controls to correctly identify and track all Federal awards received either directly or indirectly. The expenditures incurred under direct and pass-through awards should be evaluated in aggregate periodically throughout the year (and at year-end) to determine if the Aquarium has reached the Uniform Guidance threshold. The Aquarium should ensure that the Uniform Guidance audit is completed, and the complete reporting package submitted to the Federal Audit Clearinghouse in advance of the reporting deadlines.
Finding 2022-003 - Preparation of the SEFA Information on the Federal Program: All Federal programs Criteria or Specific Requirement: Title 2 CFR 200.508 ?Auditee Responsibilities? indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 ?Financial statements?). Title 2 CFR 200 Section 200.510 ?Financial Statements? requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non-Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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). Condition: The Aquarium did not appropriately identify and track its Federal expenditures incurred under direct and pass-through Federal awards during the year under audit. Cause: The Aquarium did not maintain appropriate internal controls to correctly identify and track awards provided from the federal government, including those received through pass through entities. Effect or Potential Effect: The Aquarium incurred expenditures in excess of the $750,000 threshold, requiring a Uniform Guidance compliance examination. Questioned Costs: None noted. Context: The SEFA must be prepared by the auditee (as described in ?Criteria? above). Identification as a Repeat Finding, if Applicable: This is not a repeat finding. Recommendation: We recommend that the Aquarium establish internal controls to correctly identify and track all Federal awards received either directly or indirectly. The expenditures incurred under direct and pass-through awards should be evaluated in aggregate periodically throughout the year (and at year-end) to determine if the Aquarium has reached the Uniform Guidance threshold. The Aquarium should ensure that the Uniform Guidance audit is completed, and the complete reporting package submitted to the Federal Audit Clearinghouse in advance of the reporting deadlines.
2022-002 - Allowable Costs/Cost Principles Federal Program Information: Department of Education - ALN: - 84.425 - Education Stabilization Fund Criteria: The following CFR(s) apply to this finding: 2 CFR 200.303 Condition: During audit procedures, it was identified that the Unit does not have a consistent, documented method over invoice and/or purchase order approval to ensure that only allowable costs are being charged to the program. Cause: The Unit has not adopted a policy documenting consistent internal controls for invoice and/or purchase order approval to ensure that only allowable costs are charged to the program. Effect: The Unit is at an increased risk for unallowable cost to be charged to the program. Identification of Questioned Costs: None identified. Context: The population for the test consisted of transactions of over 250 expenditures. 63 samples were selected using the haphazard method. Of the 63 samples, 17 did not have consistent, documented approval of invoices and/or purchase orders to ensure that only allowable costs were being charged to the program. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit develop and implement policies and procedures for a consistent, documented approval process to ensure that only allowable costs are charged to the program. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by Regional School Unit 01.
2022-002 - Allowable Costs/Cost Principles Federal Program Information: Department of Education - ALN: - 84.425 - Education Stabilization Fund Criteria: The following CFR(s) apply to this finding: 2 CFR 200.303 Condition: During audit procedures, it was identified that the Unit does not have a consistent, documented method over invoice and/or purchase order approval to ensure that only allowable costs are being charged to the program. Cause: The Unit has not adopted a policy documenting consistent internal controls for invoice and/or purchase order approval to ensure that only allowable costs are charged to the program. Effect: The Unit is at an increased risk for unallowable cost to be charged to the program. Identification of Questioned Costs: None identified. Context: The population for the test consisted of transactions of over 250 expenditures. 63 samples were selected using the haphazard method. Of the 63 samples, 17 did not have consistent, documented approval of invoices and/or purchase orders to ensure that only allowable costs were being charged to the program. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit develop and implement policies and procedures for a consistent, documented approval process to ensure that only allowable costs are charged to the program. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by Regional School Unit 01.
2022-002 - Allowable Costs/Cost Principles Federal Program Information: Department of Education - ALN: - 84.425 - Education Stabilization Fund Criteria: The following CFR(s) apply to this finding: 2 CFR 200.303 Condition: During audit procedures, it was identified that the Unit does not have a consistent, documented method over invoice and/or purchase order approval to ensure that only allowable costs are being charged to the program. Cause: The Unit has not adopted a policy documenting consistent internal controls for invoice and/or purchase order approval to ensure that only allowable costs are charged to the program. Effect: The Unit is at an increased risk for unallowable cost to be charged to the program. Identification of Questioned Costs: None identified. Context: The population for the test consisted of transactions of over 250 expenditures. 63 samples were selected using the haphazard method. Of the 63 samples, 17 did not have consistent, documented approval of invoices and/or purchase orders to ensure that only allowable costs were being charged to the program. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit develop and implement policies and procedures for a consistent, documented approval process to ensure that only allowable costs are charged to the program. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by Regional School Unit 01.
2022-002 - Allowable Costs/Cost Principles Federal Program Information: Department of Education - ALN: - 84.425 - Education Stabilization Fund Criteria: The following CFR(s) apply to this finding: 2 CFR 200.303 Condition: During audit procedures, it was identified that the Unit does not have a consistent, documented method over invoice and/or purchase order approval to ensure that only allowable costs are being charged to the program. Cause: The Unit has not adopted a policy documenting consistent internal controls for invoice and/or purchase order approval to ensure that only allowable costs are charged to the program. Effect: The Unit is at an increased risk for unallowable cost to be charged to the program. Identification of Questioned Costs: None identified. Context: The population for the test consisted of transactions of over 250 expenditures. 63 samples were selected using the haphazard method. Of the 63 samples, 17 did not have consistent, documented approval of invoices and/or purchase orders to ensure that only allowable costs were being charged to the program. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit develop and implement policies and procedures for a consistent, documented approval process to ensure that only allowable costs are charged to the program. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by Regional School Unit 01.
2022-002 - Allowable Costs/Cost Principles Federal Program Information: Department of Education - ALN: - 84.425 - Education Stabilization Fund Criteria: The following CFR(s) apply to this finding: 2 CFR 200.303 Condition: During audit procedures, it was identified that the Unit does not have a consistent, documented method over invoice and/or purchase order approval to ensure that only allowable costs are being charged to the program. Cause: The Unit has not adopted a policy documenting consistent internal controls for invoice and/or purchase order approval to ensure that only allowable costs are charged to the program. Effect: The Unit is at an increased risk for unallowable cost to be charged to the program. Identification of Questioned Costs: None identified. Context: The population for the test consisted of transactions of over 250 expenditures. 63 samples were selected using the haphazard method. Of the 63 samples, 17 did not have consistent, documented approval of invoices and/or purchase orders to ensure that only allowable costs were being charged to the program. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit develop and implement policies and procedures for a consistent, documented approval process to ensure that only allowable costs are charged to the program. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by Regional School Unit 01.
2022-002 - Allowable Costs/Cost Principles Federal Program Information: Department of Education - ALN: - 84.425 - Education Stabilization Fund Criteria: The following CFR(s) apply to this finding: 2 CFR 200.303 Condition: During audit procedures, it was identified that the Unit does not have a consistent, documented method over invoice and/or purchase order approval to ensure that only allowable costs are being charged to the program. Cause: The Unit has not adopted a policy documenting consistent internal controls for invoice and/or purchase order approval to ensure that only allowable costs are charged to the program. Effect: The Unit is at an increased risk for unallowable cost to be charged to the program. Identification of Questioned Costs: None identified. Context: The population for the test consisted of transactions of over 250 expenditures. 63 samples were selected using the haphazard method. Of the 63 samples, 17 did not have consistent, documented approval of invoices and/or purchase orders to ensure that only allowable costs were being charged to the program. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit develop and implement policies and procedures for a consistent, documented approval process to ensure that only allowable costs are charged to the program. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by Regional School Unit 01.
Criteria: 2 CFR Part 200.303 establishes internal control requirements over federal awards that provides reasonable assurance the entity is managing the federal award in compliance with Federal Statutes. Condition: The Organization contracted with a third party to determine eligibility of tenants. During the year, the third party failed to complete annual recertifications timely. Internal controls should be present to monitor the activities of the third party to ensure timely completion of recertifications. Cause: The Organization relied on a third-party provider to perform the work they were contracted to perform and did not implement internal controls to monitor the services provided to ensure they complied with Federal Statutes. Effect: Annual recertifications were not performed timely. Questioned Costs: None Recommendations: The Organization should implement internal controls to monitor the activities of third-party providers to ensure the services being provided are in compliance with Federal Statutes.
Criteria: 2 CFR Part 200.303 establishes internal control requirements over federal awards that provides reasonable assurance the entity is managing the federal award in compliance with Federal Statutes. Condition: The Organization contracted with a third party to determine eligibility of tenants. During the year, the third party failed to complete annual recertifications timely. Internal controls should be present to monitor the activities of the third party to ensure timely completion of recertifications. Cause: The Organization relied on a third-party provider to perform the work they were contracted to perform and did not implement internal controls to monitor the services provided to ensure they complied with Federal Statutes. Effect: Annual recertifications were not performed timely. Questioned Costs: None Recommendations: The Organization should implement internal controls to monitor the activities of third-party providers to ensure the services being provided are in compliance with Federal Statutes.
Criteria: 2 CFR Part 200.303 establishes internal control requirements over federal awards that provides reasonable assurance the entity is managing the federal award in compliance with Federal Statutes. Condition: The Organization contracted with a third party to determine eligibility of tenants. During the year, the third party failed to complete annual recertifications timely. Internal controls should be present to monitor the activities of the third party to ensure timely completion of recertifications. Cause: The Organization relied on a third-party provider to perform the work they were contracted to perform and did not implement internal controls to monitor the services provided to ensure they complied with Federal Statutes. Effect: Annual recertifications were not performed timely. Questioned Costs: None Recommendations: The Organization should implement internal controls to monitor the activities of third-party providers to ensure the services being provided are in compliance with Federal Statutes.
Criteria: 2 CFR Part 200.303 establishes internal control requirements over federal awards that provides reasonable assurance the entity is managing the federal award in compliance with Federal Statutes. Condition: The Organization contracted with a third party to determine eligibility of tenants. During the year, the third party failed to complete annual recertifications timely. Internal controls should be present to monitor the activities of the third party to ensure timely completion of recertifications. Cause: The Organization relied on a third-party provider to perform the work they were contracted to perform and did not implement internal controls to monitor the services provided to ensure they complied with Federal Statutes. Effect: Annual recertifications were not performed timely. Questioned Costs: None Recommendations: The Organization should implement internal controls to monitor the activities of third-party providers to ensure the services being provided are in compliance with Federal Statutes.