Finding 2022-001: Wage Rate Requirements Program Name: Education Stabilization Fund ? Assistance Listing 84.425D & 84.425U Awarding Agency: U.S. Department of Education, passed through Louisiana Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material instance of Non-compliance Questioned Costs: $288,517 for 84.425D and $56,627 for 84.425U. Total questioned cost is $345,144 for the program. Context / Criteria: 2 CFR 200.303(a) requires non-federal entities to establish and maintain internal controls over compliance with federal statutes, laws, and the terms and conditions of grant agreements. 2CFR Part 176, Subpart C requires all laborers and mechanics employed by contractors and subcontractors on projects funded with federal awards to be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of Chapter 31 of Title 40, United States Code. This includes a requirement for the contractor 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). Condition: The School District did not have controls in place to ensure construction contracts in excess of $2,000 included provisions for compliance with the Davis-Bacon Act. The School District did not obtain weekly certified payrolls from contractors for each week in which any contract work was performed. Cause / Effect: The School District entered into a contract with a construction manager for a project not funded by federal funds. Subsequent to the effective date of the contract, the School District began to utilize federal funds for payment of the contract. The contract was not amended to comply with the provisions of the Davis-Bacon Act. As a result, the School District was not in compliance with 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. Recommendation: We recommend management implement procedures to ensure construction contracts entered into that utilize federal funding are reviewed for compliance with federal requirements Views of Responsible Officials and Corrective actions: Management is in agreement with the finding. See accompanying Corrective Action Plan.
Finding 2022-001: Wage Rate Requirements Program Name: Education Stabilization Fund ? Assistance Listing 84.425D & 84.425U Awarding Agency: U.S. Department of Education, passed through Louisiana Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material instance of Non-compliance Questioned Costs: $288,517 for 84.425D and $56,627 for 84.425U. Total questioned cost is $345,144 for the program. Context / Criteria: 2 CFR 200.303(a) requires non-federal entities to establish and maintain internal controls over compliance with federal statutes, laws, and the terms and conditions of grant agreements. 2CFR Part 176, Subpart C requires all laborers and mechanics employed by contractors and subcontractors on projects funded with federal awards to be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of Chapter 31 of Title 40, United States Code. This includes a requirement for the contractor 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). Condition: The School District did not have controls in place to ensure construction contracts in excess of $2,000 included provisions for compliance with the Davis-Bacon Act. The School District did not obtain weekly certified payrolls from contractors for each week in which any contract work was performed. Cause / Effect: The School District entered into a contract with a construction manager for a project not funded by federal funds. Subsequent to the effective date of the contract, the School District began to utilize federal funds for payment of the contract. The contract was not amended to comply with the provisions of the Davis-Bacon Act. As a result, the School District was not in compliance with 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. Recommendation: We recommend management implement procedures to ensure construction contracts entered into that utilize federal funding are reviewed for compliance with federal requirements Views of Responsible Officials and Corrective actions: Management is in agreement with the finding. See accompanying Corrective Action Plan.
Finding 2022-001: Wage Rate Requirements Program Name: Education Stabilization Fund ? Assistance Listing 84.425D & 84.425U Awarding Agency: U.S. Department of Education, passed through Louisiana Department of Education Finding Type: Material Weakness on Internal Controls over Compliance and Material instance of Non-compliance Questioned Costs: $288,517 for 84.425D and $56,627 for 84.425U. Total questioned cost is $345,144 for the program. Context / Criteria: 2 CFR 200.303(a) requires non-federal entities to establish and maintain internal controls over compliance with federal statutes, laws, and the terms and conditions of grant agreements. 2CFR Part 176, Subpart C requires all laborers and mechanics employed by contractors and subcontractors on projects funded with federal awards to be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of Chapter 31 of Title 40, United States Code. This includes a requirement for the contractor 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). Condition: The School District did not have controls in place to ensure construction contracts in excess of $2,000 included provisions for compliance with the Davis-Bacon Act. The School District did not obtain weekly certified payrolls from contractors for each week in which any contract work was performed. Cause / Effect: The School District entered into a contract with a construction manager for a project not funded by federal funds. Subsequent to the effective date of the contract, the School District began to utilize federal funds for payment of the contract. The contract was not amended to comply with the provisions of the Davis-Bacon Act. As a result, the School District was not in compliance with 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. Recommendation: We recommend management implement procedures to ensure construction contracts entered into that utilize federal funding are reviewed for compliance with federal requirements Views of Responsible Officials and Corrective actions: Management is in agreement with the finding. See accompanying Corrective Action Plan.
Federal Agency: U.S. Department of the Treasury Program/Cluster: Coronavirus State and Local Fiscal Recovery Funds Federal Assistance Listing Number: 21.027 Pass-through: N/A Award No. and Year: N/A Compliance Requirement: Reporting Type of Finding: Significant Deficiency Criteria: Per 2 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. This includes internal controls over maintaining records of the preparer and approver of required reports. Condition: We identified 4 instances in which the City did not retain evidence to document the individual who reviewed the required reports prior to submission. Of the instances identified, 3 of the reports (1 interim, and 2 quarterly reports) had zero activity reported for the period. Cause: The City?s procedures did not include documenting the review of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted to the granting agency. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: All interim (1) and quarterly (3) financial reports were selected for testing. Repeat Finding from Prior Year(s): No. Recommendation: We recommend that the City revise its procedures to include evidence to document the individual who reviewed required reports prior to submission. Views of Responsible Officials: Management partially concurs with the finding. See separate corrective action plan.
2022 ? 003 ? Elementary and Secondary School Emergency Relief Fund Reporting Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425C200018, S425D200013, S425U210013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Other Matters Criteria: Grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. Amounts reports must be supported by the unit's records. Per 2 CFR 200.303, ""The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award 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: During our testing we noted that supporting documentation for key line items was insufficient or not provided. Proper controls around annual reporting requirements were not in place during the period under audit. In addition, one report was not submitted in a timely manner and 2 of the 6 reports were not properly approved. Questioned costs: None Context: CLA selected the entire population of reports. 5 of the 6 reports tested contained key elements that were not supported by the supporting documentation reviewed. In addition, 1 of the 6 reports tested were not submitted in a timely manner and 2 of the 6 reports were not properly approved. Cause: Lack of internal controls surrounding the reporting process were not in place during the period under audit. Effect: The failure to establish an effective internal control system may enable noncompliance with the grant agreement and the reporting compliance requirement. Noncompliance may go undetected. Repeat Finding: No. Recommendation: We recommend the Eastbrook Community School Corporation?s management establish a system of internal control to ensure compliance. Training over proper internal control development and implementation may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 004 ? Elementary and Secondary School Emergency Relief Fund Davis-Bacon Prevailing Wage Requirements Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425C200018, S425D200013, S425U210013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Qualified Opinion) Criteria: "2 CFR section 200.303 states in part: ""The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) "" 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)(ii)(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 ?" Condition: During our testing we noted that supporting documentation for key line items was insufficient or not provided. Proper controls around annual reporting requirements were not in place during the period under audit. In addition, one report was not submitted in a timely manner and 2 of the 6 reports were not properly approved. Questioned costs: $226,860 Context: In a statistically valid sample, 5 of 5 selections were not supported by appropriate documentation to perform the testing. The School Corporation did not have an internal control designed to collect the weekly payroll reports certifications from a construction company and its subcontractors for a building project. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. The School Corporation did not have an internal control in place to ensure the required weekly payroll reports certifications are collected and reviewed to ensure compliance with the wage rate requirements. Effect: The failure to establish an effective internal control system may enable noncompliance with the grant agreement and the reporting compliance requirement. Noncompliance may go undetected and could result in the loss of future federal funds to the School Corporation. Repeat Finding: No. Recommendation: We recommend the Eastbrook Community School Corporation?s management establish a system of internal control to ensure the required weekly payroll reports certifications are collected and reviewed to ensure compliance with the wage rate requirements. Training over proper internal control development and implementation may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 003 ? Elementary and Secondary School Emergency Relief Fund Reporting Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425C200018, S425D200013, S425U210013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Other Matters Criteria: Grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. Amounts reports must be supported by the unit's records. Per 2 CFR 200.303, ""The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award 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: During our testing we noted that supporting documentation for key line items was insufficient or not provided. Proper controls around annual reporting requirements were not in place during the period under audit. In addition, one report was not submitted in a timely manner and 2 of the 6 reports were not properly approved. Questioned costs: None Context: CLA selected the entire population of reports. 5 of the 6 reports tested contained key elements that were not supported by the supporting documentation reviewed. In addition, 1 of the 6 reports tested were not submitted in a timely manner and 2 of the 6 reports were not properly approved. Cause: Lack of internal controls surrounding the reporting process were not in place during the period under audit. Effect: The failure to establish an effective internal control system may enable noncompliance with the grant agreement and the reporting compliance requirement. Noncompliance may go undetected. Repeat Finding: No. Recommendation: We recommend the Eastbrook Community School Corporation?s management establish a system of internal control to ensure compliance. Training over proper internal control development and implementation may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 004 ? Elementary and Secondary School Emergency Relief Fund Davis-Bacon Prevailing Wage Requirements Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425C200018, S425D200013, S425U210013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Qualified Opinion) Criteria: "2 CFR section 200.303 states in part: ""The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) "" 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)(ii)(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 ?" Condition: During our testing we noted that supporting documentation for key line items was insufficient or not provided. Proper controls around annual reporting requirements were not in place during the period under audit. In addition, one report was not submitted in a timely manner and 2 of the 6 reports were not properly approved. Questioned costs: $226,860 Context: In a statistically valid sample, 5 of 5 selections were not supported by appropriate documentation to perform the testing. The School Corporation did not have an internal control designed to collect the weekly payroll reports certifications from a construction company and its subcontractors for a building project. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. The School Corporation did not have an internal control in place to ensure the required weekly payroll reports certifications are collected and reviewed to ensure compliance with the wage rate requirements. Effect: The failure to establish an effective internal control system may enable noncompliance with the grant agreement and the reporting compliance requirement. Noncompliance may go undetected and could result in the loss of future federal funds to the School Corporation. Repeat Finding: No. Recommendation: We recommend the Eastbrook Community School Corporation?s management establish a system of internal control to ensure the required weekly payroll reports certifications are collected and reviewed to ensure compliance with the wage rate requirements. Training over proper internal control development and implementation may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 003 ? Elementary and Secondary School Emergency Relief Fund Reporting Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425C200018, S425D200013, S425U210013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Other Matters Criteria: Grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. Amounts reports must be supported by the unit's records. Per 2 CFR 200.303, ""The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award 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: During our testing we noted that supporting documentation for key line items was insufficient or not provided. Proper controls around annual reporting requirements were not in place during the period under audit. In addition, one report was not submitted in a timely manner and 2 of the 6 reports were not properly approved. Questioned costs: None Context: CLA selected the entire population of reports. 5 of the 6 reports tested contained key elements that were not supported by the supporting documentation reviewed. In addition, 1 of the 6 reports tested were not submitted in a timely manner and 2 of the 6 reports were not properly approved. Cause: Lack of internal controls surrounding the reporting process were not in place during the period under audit. Effect: The failure to establish an effective internal control system may enable noncompliance with the grant agreement and the reporting compliance requirement. Noncompliance may go undetected. Repeat Finding: No. Recommendation: We recommend the Eastbrook Community School Corporation?s management establish a system of internal control to ensure compliance. Training over proper internal control development and implementation may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 004 ? Elementary and Secondary School Emergency Relief Fund Davis-Bacon Prevailing Wage Requirements Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425C200018, S425D200013, S425U210013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Qualified Opinion) Criteria: "2 CFR section 200.303 states in part: ""The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) "" 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)(ii)(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 ?" Condition: During our testing we noted that supporting documentation for key line items was insufficient or not provided. Proper controls around annual reporting requirements were not in place during the period under audit. In addition, one report was not submitted in a timely manner and 2 of the 6 reports were not properly approved. Questioned costs: $226,860 Context: In a statistically valid sample, 5 of 5 selections were not supported by appropriate documentation to perform the testing. The School Corporation did not have an internal control designed to collect the weekly payroll reports certifications from a construction company and its subcontractors for a building project. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. The School Corporation did not have an internal control in place to ensure the required weekly payroll reports certifications are collected and reviewed to ensure compliance with the wage rate requirements. Effect: The failure to establish an effective internal control system may enable noncompliance with the grant agreement and the reporting compliance requirement. Noncompliance may go undetected and could result in the loss of future federal funds to the School Corporation. Repeat Finding: No. Recommendation: We recommend the Eastbrook Community School Corporation?s management establish a system of internal control to ensure the required weekly payroll reports certifications are collected and reviewed to ensure compliance with the wage rate requirements. Training over proper internal control development and implementation may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 003 ? Elementary and Secondary School Emergency Relief Fund Reporting Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425C200018, S425D200013, S425U210013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Other Matters Criteria: Grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. Amounts reports must be supported by the unit's records. Per 2 CFR 200.303, ""The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award 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: During our testing we noted that supporting documentation for key line items was insufficient or not provided. Proper controls around annual reporting requirements were not in place during the period under audit. In addition, one report was not submitted in a timely manner and 2 of the 6 reports were not properly approved. Questioned costs: None Context: CLA selected the entire population of reports. 5 of the 6 reports tested contained key elements that were not supported by the supporting documentation reviewed. In addition, 1 of the 6 reports tested were not submitted in a timely manner and 2 of the 6 reports were not properly approved. Cause: Lack of internal controls surrounding the reporting process were not in place during the period under audit. Effect: The failure to establish an effective internal control system may enable noncompliance with the grant agreement and the reporting compliance requirement. Noncompliance may go undetected. Repeat Finding: No. Recommendation: We recommend the Eastbrook Community School Corporation?s management establish a system of internal control to ensure compliance. Training over proper internal control development and implementation may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 004 ? Elementary and Secondary School Emergency Relief Fund Davis-Bacon Prevailing Wage Requirements Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425C200018, S425D200013, S425U210013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Qualified Opinion) Criteria: "2 CFR section 200.303 states in part: ""The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) "" 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)(ii)(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 ?" Condition: During our testing we noted that supporting documentation for key line items was insufficient or not provided. Proper controls around annual reporting requirements were not in place during the period under audit. In addition, one report was not submitted in a timely manner and 2 of the 6 reports were not properly approved. Questioned costs: $226,860 Context: In a statistically valid sample, 5 of 5 selections were not supported by appropriate documentation to perform the testing. The School Corporation did not have an internal control designed to collect the weekly payroll reports certifications from a construction company and its subcontractors for a building project. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. The School Corporation did not have an internal control in place to ensure the required weekly payroll reports certifications are collected and reviewed to ensure compliance with the wage rate requirements. Effect: The failure to establish an effective internal control system may enable noncompliance with the grant agreement and the reporting compliance requirement. Noncompliance may go undetected and could result in the loss of future federal funds to the School Corporation. Repeat Finding: No. Recommendation: We recommend the Eastbrook Community School Corporation?s management establish a system of internal control to ensure the required weekly payroll reports certifications are collected and reviewed to ensure compliance with the wage rate requirements. Training over proper internal control development and implementation may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 003 ? Elementary and Secondary School Emergency Relief Fund Reporting Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425C200018, S425D200013, S425U210013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Other Matters Criteria: Grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. Amounts reports must be supported by the unit's records. Per 2 CFR 200.303, ""The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award 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: During our testing we noted that supporting documentation for key line items was insufficient or not provided. Proper controls around annual reporting requirements were not in place during the period under audit. In addition, one report was not submitted in a timely manner and 2 of the 6 reports were not properly approved. Questioned costs: None Context: CLA selected the entire population of reports. 5 of the 6 reports tested contained key elements that were not supported by the supporting documentation reviewed. In addition, 1 of the 6 reports tested were not submitted in a timely manner and 2 of the 6 reports were not properly approved. Cause: Lack of internal controls surrounding the reporting process were not in place during the period under audit. Effect: The failure to establish an effective internal control system may enable noncompliance with the grant agreement and the reporting compliance requirement. Noncompliance may go undetected. Repeat Finding: No. Recommendation: We recommend the Eastbrook Community School Corporation?s management establish a system of internal control to ensure compliance. Training over proper internal control development and implementation may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
Finding Number: 2022-002 Program: COVID-19 Higher Education Emergency Relief Fund (HEERF) Federal Agency Name: U.S. Department of Education Federal Award Year: July 1, 2021 ? June 30, 2022 Federal Assistance Listing Number: 84.425F Criteria There are three components to reporting for HEERF: 1) public reporting on the (a)(1) Student Aid Portion; 2) public reporting on the (a)(1) Institutional Portion (a)(2) and (a)(3) subprograms (Quarterly Reporting Form), as applicable; and 3) the annual report. The CARES Act 18004(e) and the CRRSAA 314(e) require an institution receiving funds under HEERF I and HEERF II to submit a report to the secretary, at such time in such a manner as the secretary may require. While ARP does not explicitly identify procedures by which institutions must report on their uses of HEERF grant funds, ED exercises this reporting authority under 2 CFR section 200.328 and 2 CFR section 200.329. Annual Reporting (all HEERF grantees) ED required an annual report from HEERF grantees in April 2022 that included reporting uses of HEERF I CARES Act funds, HEERF II CRRSAA funds, and HEERF III ARP funds for the 2021 calendar year. Quarterly Public Reporting for (a)(1) Institutional Portion, (a)(2), and (a)(3) funds The CARES, CRRSAA, and ARP institutional quarterly portion reporting requirements involve publicly posting completed forms on the institution?s website. The forms must be conspicuously posted on the institution?s primary website on the same page the reports of the IHE?s activities as to the emergency financial aid grants to students (Student Aid Portion) are posted. IHEs must post this quarterly report form no later than 10 days after the end of each calendar quarter apart from the first report, which was due October 30, 2020, and the report covering the first quarter of 2021, which was due by July 10, 2021. Quarterly Public Reporting for (a)(1) Student Aid Portion ED requires institutions that received Student Aid Portion awards under CARES Act, CRRSAA and ARP to publicly post certain information on their website. Under the requirements to post student aid public reporting for CRRSAA and ARP, there is a requirement to include certain information on their website. Institutions must publicly post their report as soon as possible, but no later than 30 days after the publication of the notice or 30 days after the date ED first obligated funds under HEERF I, II, or III to the institution for Emergency Financial Aid Grants to Students, whichever comes later. The report must be updated not later than 10 days after the end of each calendar quarter. Further, in accordance with 2 CFR 200.303(a), non-federal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2022, although all required reporting was found to be accurate and provided on a timely basis, in compliance with the reporting requirements, the College had not implemented a control that specifically addresses the accuracy and timeliness of the required reporting under HEERF. Cause The College?s HEERF reporting process did not include a control designed to monitor the timeliness and accuracy of the required reporting. Although identified as a finding in the prior year, the timing of the identification of this issue did not allow for the management of the College to implement a control that was responsive to the finding. Effect If appropriate controls are not designed and operating effectively over the HEERF reporting process, HEERF expenditures reported on the College?s website and to ED may be incomplete, inaccurate, or not posted within the timeframe required. Questioned Costs None noted. Prior Year Finding Yes ? 2021-001 Recommendation We recommend that the College implement a more thorough and detailed process and related internal controls to ensure timely and accurate reporting required under its Federal programs. Management?s Views Subsequent to June 30, 2022, management has reviewed its reporting requirements under its Federal programs and implemented controls to ensure accuracy and timeliness of required reporting. These include reconciliation of reporting to the College?s accounting records and a review of requirements to ensure timeliness. Anticipated Completion Date Completed ? October 31, 2022 Responsible Persons Gillian King, Chief of Staff
Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Assistance Listing Number: Student Financial Aid Cluster Award Period: July 1, 2021 to June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control Criteria or Specific Requirement: The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition: During our testing, we noted the College did not have a formal review of their monthly reconciliations related to Direct Loans, Pell, SEOG, FWS nor did they have a review prior to their G5 drawdowns. Likewise, the College did not have a formal review of their award packaging during the 2021-22 academic year. Lastly, the College did not have a formal review of their return of Title IV fund calculations. Questioned Costs: None Context: The College did not have proper internal controls in place during the 2021-22 academic year to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Cause: The College's processes and controls were not formally documented during the year as they had significant turnover in the financial aid department. Effect: The College is not following the compliance with federal statutes, regulations, and the terms and conditions of the federal award. Repeat Finding: No Recommendation: We recommend the College review its procedures to ensure the students' cost of attendance is correctly reported to ensure proper awarding. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Assistance Listing Number: Student Financial Aid Cluster Award Period: July 1, 2021 to June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control Criteria or Specific Requirement: The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition: During our testing, we noted the College did not have a formal review of their monthly reconciliations related to Direct Loans, Pell, SEOG, FWS nor did they have a review prior to their G5 drawdowns. Likewise, the College did not have a formal review of their award packaging during the 2021-22 academic year. Lastly, the College did not have a formal review of their return of Title IV fund calculations. Questioned Costs: None Context: The College did not have proper internal controls in place during the 2021-22 academic year to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Cause: The College's processes and controls were not formally documented during the year as they had significant turnover in the financial aid department. Effect: The College is not following the compliance with federal statutes, regulations, and the terms and conditions of the federal award. Repeat Finding: No Recommendation: We recommend the College review its procedures to ensure the students' cost of attendance is correctly reported to ensure proper awarding. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Assistance Listing Number: Student Financial Aid Cluster Award Period: July 1, 2021 to June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control Criteria or Specific Requirement: The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition: During our testing, we noted the College did not have a formal review of their monthly reconciliations related to Direct Loans, Pell, SEOG, FWS nor did they have a review prior to their G5 drawdowns. Likewise, the College did not have a formal review of their award packaging during the 2021-22 academic year. Lastly, the College did not have a formal review of their return of Title IV fund calculations. Questioned Costs: None Context: The College did not have proper internal controls in place during the 2021-22 academic year to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Cause: The College's processes and controls were not formally documented during the year as they had significant turnover in the financial aid department. Effect: The College is not following the compliance with federal statutes, regulations, and the terms and conditions of the federal award. Repeat Finding: No Recommendation: We recommend the College review its procedures to ensure the students' cost of attendance is correctly reported to ensure proper awarding. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Assistance Listing Number: Student Financial Aid Cluster Award Period: July 1, 2021 to June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control Criteria or Specific Requirement: The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition: During our testing, we noted the College did not have a formal review of their monthly reconciliations related to Direct Loans, Pell, SEOG, FWS nor did they have a review prior to their G5 drawdowns. Likewise, the College did not have a formal review of their award packaging during the 2021-22 academic year. Lastly, the College did not have a formal review of their return of Title IV fund calculations. Questioned Costs: None Context: The College did not have proper internal controls in place during the 2021-22 academic year to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Cause: The College's processes and controls were not formally documented during the year as they had significant turnover in the financial aid department. Effect: The College is not following the compliance with federal statutes, regulations, and the terms and conditions of the federal award. Repeat Finding: No Recommendation: We recommend the College review its procedures to ensure the students' cost of attendance is correctly reported to ensure proper awarding. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Assistance Listing Number: Student Financial Aid Cluster Award Period: July 1, 2021 to June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control Criteria or Specific Requirement: The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition: During our testing, we noted the College did not have a formal review of their monthly reconciliations related to Direct Loans, Pell, SEOG, FWS nor did they have a review prior to their G5 drawdowns. Likewise, the College did not have a formal review of their award packaging during the 2021-22 academic year. Lastly, the College did not have a formal review of their return of Title IV fund calculations. Questioned Costs: None Context: The College did not have proper internal controls in place during the 2021-22 academic year to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Cause: The College's processes and controls were not formally documented during the year as they had significant turnover in the financial aid department. Effect: The College is not following the compliance with federal statutes, regulations, and the terms and conditions of the federal award. Repeat Finding: No Recommendation: We recommend the College review its procedures to ensure the students' cost of attendance is correctly reported to ensure proper awarding. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Assistance Listing Number: Student Financial Aid Cluster Award Period: July 1, 2021 to June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control Criteria or Specific Requirement: The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition: During our testing, we noted the College did not have a formal review of their monthly reconciliations related to Direct Loans, Pell, SEOG, FWS nor did they have a review prior to their G5 drawdowns. Likewise, the College did not have a formal review of their award packaging during the 2021-22 academic year. Lastly, the College did not have a formal review of their return of Title IV fund calculations. Questioned Costs: None Context: The College did not have proper internal controls in place during the 2021-22 academic year to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Cause: The College's processes and controls were not formally documented during the year as they had significant turnover in the financial aid department. Effect: The College is not following the compliance with federal statutes, regulations, and the terms and conditions of the federal award. Repeat Finding: No Recommendation: We recommend the College review its procedures to ensure the students' cost of attendance is correctly reported to ensure proper awarding. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Assistance Listing Number: Student Financial Aid Cluster Award Period: July 1, 2021 to June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control Criteria or Specific Requirement: The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition: During our testing, we noted the College did not have a formal review of their monthly reconciliations related to Direct Loans, Pell, SEOG, FWS nor did they have a review prior to their G5 drawdowns. Likewise, the College did not have a formal review of their award packaging during the 2021-22 academic year. Lastly, the College did not have a formal review of their return of Title IV fund calculations. Questioned Costs: None Context: The College did not have proper internal controls in place during the 2021-22 academic year to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Cause: The College's processes and controls were not formally documented during the year as they had significant turnover in the financial aid department. Effect: The College is not following the compliance with federal statutes, regulations, and the terms and conditions of the federal award. Repeat Finding: No Recommendation: We recommend the College review its procedures to ensure the students' cost of attendance is correctly reported to ensure proper awarding. Views of responsible officials: There is no disagreement with the audit finding.
2022-001 Finding ? Federal Award Type of Finding: Federal Award ? Other non-compliance over Special Tests and Provisions AL Numbers: U.S. Department of Agriculture passed through ODHS 10.565, 10.568, 10.569, Food Distribution Cluster Repeat of Prior Year Finding: 2021-003 Criteria/Requirement: The commodity receipts and distributions recorded in the general ledger as revenue and expense should reconcile to the recording of inventory transactions. Verifiable records should be maintained pursuant to 27 CFR 250.19. According to section 2 CFR 200.303, the Organization should have internal controls in place to comply with requirements of the award and federal requirements regarding the accuracy of inventory activity. Condition/Context: Receipts recognized as commodity revenue and distributions recognized as expenses did not agree to the inventory transactions as recorded in the Primarius inventory system. Large inventory adjustments were recorded within Primarius to reconcile inventory amounts. Cause: The Organization relies on the inventory system to generate entries for the accounting system. The inventory system has known shortcomings that may create variances. Effect: Total USDA commodity inventory receipts and distributions recorded may not be accurate. Questioned Costs: None Recommendation: The Organization should incorporate another level of review or reconciliation process over the monthly USDA inventory receipts and distributions to agree inventory movement with recorded revenue and expense each period.
2022-001 Finding ? Federal Award Type of Finding: Federal Award ? Other non-compliance over Special Tests and Provisions AL Numbers: U.S. Department of Agriculture passed through ODHS 10.565, 10.568, 10.569, Food Distribution Cluster Repeat of Prior Year Finding: 2021-003 Criteria/Requirement: The commodity receipts and distributions recorded in the general ledger as revenue and expense should reconcile to the recording of inventory transactions. Verifiable records should be maintained pursuant to 27 CFR 250.19. According to section 2 CFR 200.303, the Organization should have internal controls in place to comply with requirements of the award and federal requirements regarding the accuracy of inventory activity. Condition/Context: Receipts recognized as commodity revenue and distributions recognized as expenses did not agree to the inventory transactions as recorded in the Primarius inventory system. Large inventory adjustments were recorded within Primarius to reconcile inventory amounts. Cause: The Organization relies on the inventory system to generate entries for the accounting system. The inventory system has known shortcomings that may create variances. Effect: Total USDA commodity inventory receipts and distributions recorded may not be accurate. Questioned Costs: None Recommendation: The Organization should incorporate another level of review or reconciliation process over the monthly USDA inventory receipts and distributions to agree inventory movement with recorded revenue and expense each period.
2022-001 Finding ? Federal Award Type of Finding: Federal Award ? Other non-compliance over Special Tests and Provisions AL Numbers: U.S. Department of Agriculture passed through ODHS 10.565, 10.568, 10.569, Food Distribution Cluster Repeat of Prior Year Finding: 2021-003 Criteria/Requirement: The commodity receipts and distributions recorded in the general ledger as revenue and expense should reconcile to the recording of inventory transactions. Verifiable records should be maintained pursuant to 27 CFR 250.19. According to section 2 CFR 200.303, the Organization should have internal controls in place to comply with requirements of the award and federal requirements regarding the accuracy of inventory activity. Condition/Context: Receipts recognized as commodity revenue and distributions recognized as expenses did not agree to the inventory transactions as recorded in the Primarius inventory system. Large inventory adjustments were recorded within Primarius to reconcile inventory amounts. Cause: The Organization relies on the inventory system to generate entries for the accounting system. The inventory system has known shortcomings that may create variances. Effect: Total USDA commodity inventory receipts and distributions recorded may not be accurate. Questioned Costs: None Recommendation: The Organization should incorporate another level of review or reconciliation process over the monthly USDA inventory receipts and distributions to agree inventory movement with recorded revenue and expense each period.
2022-001 Finding ? Federal Award Type of Finding: Federal Award ? Other non-compliance over Special Tests and Provisions AL Numbers: U.S. Department of Agriculture passed through ODHS 10.565, 10.568, 10.569, Food Distribution Cluster Repeat of Prior Year Finding: 2021-003 Criteria/Requirement: The commodity receipts and distributions recorded in the general ledger as revenue and expense should reconcile to the recording of inventory transactions. Verifiable records should be maintained pursuant to 27 CFR 250.19. According to section 2 CFR 200.303, the Organization should have internal controls in place to comply with requirements of the award and federal requirements regarding the accuracy of inventory activity. Condition/Context: Receipts recognized as commodity revenue and distributions recognized as expenses did not agree to the inventory transactions as recorded in the Primarius inventory system. Large inventory adjustments were recorded within Primarius to reconcile inventory amounts. Cause: The Organization relies on the inventory system to generate entries for the accounting system. The inventory system has known shortcomings that may create variances. Effect: Total USDA commodity inventory receipts and distributions recorded may not be accurate. Questioned Costs: None Recommendation: The Organization should incorporate another level of review or reconciliation process over the monthly USDA inventory receipts and distributions to agree inventory movement with recorded revenue and expense each period.
2022-001 Finding ? Federal Award Type of Finding: Federal Award ? Other non-compliance over Special Tests and Provisions AL Numbers: U.S. Department of Agriculture passed through ODHS 10.565, 10.568, 10.569, Food Distribution Cluster Repeat of Prior Year Finding: 2021-003 Criteria/Requirement: The commodity receipts and distributions recorded in the general ledger as revenue and expense should reconcile to the recording of inventory transactions. Verifiable records should be maintained pursuant to 27 CFR 250.19. According to section 2 CFR 200.303, the Organization should have internal controls in place to comply with requirements of the award and federal requirements regarding the accuracy of inventory activity. Condition/Context: Receipts recognized as commodity revenue and distributions recognized as expenses did not agree to the inventory transactions as recorded in the Primarius inventory system. Large inventory adjustments were recorded within Primarius to reconcile inventory amounts. Cause: The Organization relies on the inventory system to generate entries for the accounting system. The inventory system has known shortcomings that may create variances. Effect: Total USDA commodity inventory receipts and distributions recorded may not be accurate. Questioned Costs: None Recommendation: The Organization should incorporate another level of review or reconciliation process over the monthly USDA inventory receipts and distributions to agree inventory movement with recorded revenue and expense each period.
2022-004 Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Special Tests and Provisions Significant Deficiency in Internal Control Over Compliance Criteria ? 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition ? During our testing, there was no formal review separate from the preparer over the reserve fund reconciliation for the federal program and there was no formal review of the balance in comparison to the required minimum reserve balance. Cause ? The Health Center did not have an adequate internal control policy in place to ensure review and approval over the reserve fund. Effect ? The lack of adequate policies governing review increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs - None reported. Context - Sampling was not used. The Health Center has one reserve account, which includes the debt service and emergency and replacement reserve, that was tested. Repeat Finding from Prior Years ? No Recommendation - We recommend that the Health Center enhance internal control policies to ensure that formal documentation of reviews is present. Views of Responsible Officials - Management agrees with the finding.
FA 2022-001 Improve Budgetary Controls over Expenditures Compliance Requirements: Activities Allowed/Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D200012 (Year: 2020), S425D210012 (Year: 2021) Questioned Costs: $62,747.69 Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund program revealed instances in which expenditures had not been properly approved by the pass-through entity. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $199,433,680.30 were expended and reported on the DeKalb County Board of Education?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Additionally, provisions included in the Uniform Guidance, Section 200.403 ? Factors Affecting Allowability of Costs state that ?costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity? (g) Be adequately documented?? To assist school districts in improving their financial management systems and associated compliance over federal programs, GaDOE published the Financial Management for Georgia Local Units of Administration (FMGLUA) manual. The FMGLUA manual requires that LEAs submit a budget as part of each federal program?s Consolidated Application process. The program budget reflects details regarding the manner in which each school district intends to expend the program funds. The Consolidated Application, including the budget, for each program must be reviewed and approved by GaDOE personnel before the LEA is authorized to expend program funds. Amendments to the budget are to be submitted to and approved by GaDOE when a school district intends to spend funds in a manner not initially reported. Further, LEA personnel must also provide program-specific assurances related to the ESSER program within the Consolidated Application system. These assurances are reflected in the Uniform Guidance, Section 200.415 ? Required Certifications, and include provisions that require LEAs ?to assure that expenditures are proper and in accordance with the terms and conditions of the Federal award and approved project budgets?? Condition: A sample of 60 nonpersonal services expenditures was randomly selected for testing using a non-statistical sampling approach. Four individually significant items were also selected for testing. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. Upon completing this testing, it was noted that three individually significant items totaling $48,037.69 and two randomly selected expenditures totaling $14,710.00 were not appropriately approved by GaDOE through the Consolidated Application process as required. Questioned Costs: Upon testing a sample of $2,037,733.28 in nonpersonal services expenditures, known questioned costs of $14,710.00 were identified. Using the total nonpersonal services expenditure population of $47,278,482.26, we project the likely questioned costs to be approximately $798,116.60. In addition, known questioned costs identified for improper payments associated with individually significant items tested totaled $48,037.69; therefore, the known and likely questioned costs identified for all unallowable payments throughout the sample and individually significant items tested totaled $62,747.69 and $846,154.29, respectively. Cause: In discussing these deficiencies with management, they stated that inadequate staffing levels led to the School District?s failure to establish appropriate internal control procedures, such as a review by appropriate personnel to ensure compliance with the Consolidated Application prior to the expenditure of federal funds. Additionally, the existence of multiple programs and associated Consolidated Applications led to the School District?s failure to establish appropriate internal control procedures to ensure the expenditure was approved on the specific Consolidated Application that funded the expenditure. Effect: The School District was not in compliance with the Uniform Guidance or GaDOE guidance related to the ESSER program. Failure to accurately develop and amend budget information through the Consolidated Application process and verify compliance with applicable policies and regulations prior to the expenditure of federal program funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unapproved and unallowable expenditures. Recommendation: The School District should revise current internal control procedures related to the ESSER program. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that potential expenditures are approved through the Consolidated Application process and deemed to be allowable before spending federal funds. In addition, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.
FA 2022-002 Improve Controls over Indirect Costs Compliance Requirements: Activities Allowed/Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund COVID-19 ? 84.425U ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021) Questioned Costs: $559,442.53 Description: The School District charged indirect cost expenditures to the Elementary and Secondary School Emergency Relief Fund program in excess of the maximum amount allowed. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $199,433,680.30 were expended and reported on the DeKalb County Board of Education?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Additionally, provisions included in the Uniform Guidance, Section 200.403 ? Factors Affecting Allowability of Costs state that ?costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity, (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost?? To assist school districts in improving their financial management systems and associated compliance over federal programs, GaDOE published the Financial Management for Georgia Local Units of Administration (FMGLUA) manual. The FMGLUA manual requires that LEAs exclude certain costs in the calculation of the net expenditures to which the approved indirect cost rate can be applied, including the cost of capitalizable assets, rental costs, tuition remission, scholarships and fellowships, payments to charter schools, and subawards in excess of $25,000. Condition: A review of the School District?s accounting records and supporting documentation revealed that costs associated with capitalizable equipment, payments to charter schools, and rental costs were not appropriately deducted in the calculation of the net expenditures to which the approved unrestricted indirect cost rate was applied. Therefore, the School District claimed an additional $559,442.53 in indirect costs beyond the maximum indirect cost amount allowed. Questioned Costs: Known questioned costs of $559,442.53 were identified for excess indirect cost expenditures claimed. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: In discussing these deficiencies with management, they stated that inadequate controls over decentralized activity input led to the School District?s failure to establish appropriate internal control procedures over recording ledger activity. Effect: The School District is not in compliance with the Uniform Guidance or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate indirect cost amounts are charged to the ESSER program may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with these unallowable expenditures. Recommendation: The School District should revise current internal control procedures related to the ESSER program. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that ledger activity is recorded accurately. In addition, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.
FA 2022-003 Improve Controls over Equipment Compliance Requirement: Equipment and Real Property Management Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund COVID-19 ? 84.425U ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D200012 (Year: 2020), S425D210012 (Year: 2021) S425U210012 (Year: 2021) Questioned Costs: None Identified Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over equipment and real property management as it relates to the Elementary and Secondary School Emergency Relief Fund program. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $199,433,680.30 were expended and reported on the DeKalb County Board of Education?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Provisions included in the Uniform Guidance, Section 200.313(d)(1) state, ?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.? In addition, the Uniform Guidance, Section 200.313(d)(2) states, ?A physical inventory of the property must be taken, and the results reconciled with the property records at least once every two years.? Condition: The following deficiencies were noted when reviewing the ESSER program equipment listing and related invoice documentation: ? Equipment items totaling $163,730.00 were included on the financial statement capital asset listing but were excluded from the program equipment listing; therefore, property records did not include the following required components for the omitted equipment items: (1) A description of the property, (2) a serial number or other identification number, (3) the source of funding for the property (including the FAIN), (4) who holds title, (5) the acquisition date, (6) cost of the property, (7) percentage of Federal participation in the project costs for the Federal award under which the property was acquired, (8) the location, and (9) use and condition of the property. ? Building improvements of $3,573,167.42 were excluded from the program equipment listing. ? Because these items were not included on the program equipment listing, a complete physical inventory was not performed and reconciled back to the property records. Cause: In discussing this deficiency with the School District, they stated that those items included on the capital asset listing and excluded from the program equipment listing were discovered after preparation and submission of the program equipment listing but prior to the submission of the financial statement capital asset listing. In addition, the building improvements are capitalized at a higher threshold for financial statement purposes and were overlooked by the School District when preparing the program equipment listing. Effect: The School District is not in compliance with the Uniform Guidance or GaDOE guidance related to the ESSER program. Failure to maintain a complete and accurate equipment listing and reconcile results of the physical inventory performed to the property records exposes the School District to unnecessary risk of error and misuse of equipment and/or Federal funds. Recommendation: The School District should develop and maintain an equipment listing that reflects all required information, including a description, an identifying number, the source of funding, the title holder, the acquisition date, the cost, the percentage of federal participation in the project costs, the location, the use and condition, and any ultimate disposal data for each piece of equipment. In addition, management should implement controls to ensure that a complete physical inventory of equipment is performed, and the results are reconciled back to the equipment listing at least once every two years. Further, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.
FA 2022-001 Improve Budgetary Controls over Expenditures Compliance Requirements: Activities Allowed/Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D200012 (Year: 2020), S425D210012 (Year: 2021) Questioned Costs: $62,747.69 Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund program revealed instances in which expenditures had not been properly approved by the pass-through entity. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $199,433,680.30 were expended and reported on the DeKalb County Board of Education?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Additionally, provisions included in the Uniform Guidance, Section 200.403 ? Factors Affecting Allowability of Costs state that ?costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity? (g) Be adequately documented?? To assist school districts in improving their financial management systems and associated compliance over federal programs, GaDOE published the Financial Management for Georgia Local Units of Administration (FMGLUA) manual. The FMGLUA manual requires that LEAs submit a budget as part of each federal program?s Consolidated Application process. The program budget reflects details regarding the manner in which each school district intends to expend the program funds. The Consolidated Application, including the budget, for each program must be reviewed and approved by GaDOE personnel before the LEA is authorized to expend program funds. Amendments to the budget are to be submitted to and approved by GaDOE when a school district intends to spend funds in a manner not initially reported. Further, LEA personnel must also provide program-specific assurances related to the ESSER program within the Consolidated Application system. These assurances are reflected in the Uniform Guidance, Section 200.415 ? Required Certifications, and include provisions that require LEAs ?to assure that expenditures are proper and in accordance with the terms and conditions of the Federal award and approved project budgets?? Condition: A sample of 60 nonpersonal services expenditures was randomly selected for testing using a non-statistical sampling approach. Four individually significant items were also selected for testing. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. Upon completing this testing, it was noted that three individually significant items totaling $48,037.69 and two randomly selected expenditures totaling $14,710.00 were not appropriately approved by GaDOE through the Consolidated Application process as required. Questioned Costs: Upon testing a sample of $2,037,733.28 in nonpersonal services expenditures, known questioned costs of $14,710.00 were identified. Using the total nonpersonal services expenditure population of $47,278,482.26, we project the likely questioned costs to be approximately $798,116.60. In addition, known questioned costs identified for improper payments associated with individually significant items tested totaled $48,037.69; therefore, the known and likely questioned costs identified for all unallowable payments throughout the sample and individually significant items tested totaled $62,747.69 and $846,154.29, respectively. Cause: In discussing these deficiencies with management, they stated that inadequate staffing levels led to the School District?s failure to establish appropriate internal control procedures, such as a review by appropriate personnel to ensure compliance with the Consolidated Application prior to the expenditure of federal funds. Additionally, the existence of multiple programs and associated Consolidated Applications led to the School District?s failure to establish appropriate internal control procedures to ensure the expenditure was approved on the specific Consolidated Application that funded the expenditure. Effect: The School District was not in compliance with the Uniform Guidance or GaDOE guidance related to the ESSER program. Failure to accurately develop and amend budget information through the Consolidated Application process and verify compliance with applicable policies and regulations prior to the expenditure of federal program funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unapproved and unallowable expenditures. Recommendation: The School District should revise current internal control procedures related to the ESSER program. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that potential expenditures are approved through the Consolidated Application process and deemed to be allowable before spending federal funds. In addition, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.
FA 2022-002 Improve Controls over Indirect Costs Compliance Requirements: Activities Allowed/Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund COVID-19 ? 84.425U ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021) Questioned Costs: $559,442.53 Description: The School District charged indirect cost expenditures to the Elementary and Secondary School Emergency Relief Fund program in excess of the maximum amount allowed. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $199,433,680.30 were expended and reported on the DeKalb County Board of Education?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Additionally, provisions included in the Uniform Guidance, Section 200.403 ? Factors Affecting Allowability of Costs state that ?costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity, (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost?? To assist school districts in improving their financial management systems and associated compliance over federal programs, GaDOE published the Financial Management for Georgia Local Units of Administration (FMGLUA) manual. The FMGLUA manual requires that LEAs exclude certain costs in the calculation of the net expenditures to which the approved indirect cost rate can be applied, including the cost of capitalizable assets, rental costs, tuition remission, scholarships and fellowships, payments to charter schools, and subawards in excess of $25,000. Condition: A review of the School District?s accounting records and supporting documentation revealed that costs associated with capitalizable equipment, payments to charter schools, and rental costs were not appropriately deducted in the calculation of the net expenditures to which the approved unrestricted indirect cost rate was applied. Therefore, the School District claimed an additional $559,442.53 in indirect costs beyond the maximum indirect cost amount allowed. Questioned Costs: Known questioned costs of $559,442.53 were identified for excess indirect cost expenditures claimed. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: In discussing these deficiencies with management, they stated that inadequate controls over decentralized activity input led to the School District?s failure to establish appropriate internal control procedures over recording ledger activity. Effect: The School District is not in compliance with the Uniform Guidance or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate indirect cost amounts are charged to the ESSER program may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with these unallowable expenditures. Recommendation: The School District should revise current internal control procedures related to the ESSER program. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that ledger activity is recorded accurately. In addition, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.
Program Identification Finding Reference Number: F-2022-004 Assistance Listing Number: 32.009 Federal Program Title: Emergency Connectivity Fund Program (Significant Deficiency) Awarding Agency / Pass-Through Entity: Federal Communications Commission Award Number: Not Available Compliance Requirement: Equipment/Real Property Management; Special Tests and Provisions State Audit Guide Finding Code: 30000 and 50000 Criteria 47 CFR 54.1706 (c) states Emergency Connectivity Fund support for eligible equipment and services is limited to no more than one fixed broadband internet access connection per location, and one connected device and one Wi-Fi hotspot device per student, school staff member, or library patron. 2 CFR 200.303 (a) states that 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 During our audit, we noted that the District did not have sufficient controls in place within its Emergency Connectivity Fund (ECF) program to ensure that proper records were maintained for equipment acquired under the ECF program. The District utilized fundings from both ECF and another Federal grant, Elementary and Secondary School Emergency Relief II (ESSER II), for connectivity to meet the remote learning needs of students, school staff, and library patrons during the COVID-19 emergency period. We noted that eligible devices, such as connectivity devices and Wi-Fi hotspot devices, had originally been purchased using ESSER II grant. Subsequently, a portion of the costs were allocated/transferred to the ECF program. We obtained a list of equipment purchased with ECF funds for our review and noted that they were not in compliance with the ?per-user? limitation. The original listing of equipment indicated that twenty-six (26) individuals were distributed with more than one (1) device. After further inquiry, the District provided an updated equipment list which indicated that ten (10) individuals were distributed with more than one (1) device. Cause and Effect The condition was due to a lack of sufficient internal controls over maintaining accurate property/equipment records and internal controls over compliance with the ?per-user? limitation requirement. The District did not properly identify equipment funded with Federal awards to ensure maintenance of accurate property/equipment inventories. Also, the District did not maintain a proper tracking system to ensure compliance with the ?per-user? limitation requirement. Questioned Costs Not applicable. This finding is considered a programmatic non-compliance issue as well as a deficiency in the internal control system over equipment inventory management as the District has yet to submit the request for reimbursement. Recommendation We recommend that the District strengthen its policies and procedures related to maintaining accurate property/equipment records in order to comply with the program requirements. We also recommend that the District perform a thorough review of the year-end equipment list to ensure it is complete and accurate. We also recommend that the District review the listing of devices distributed to students/school staff to ensure that there are no other instances of non-compliance with the per-user limitation requirement, and that non-compliance devices be removed from the request for reimbursement to be submitted to the Federal Communications Commission. View of Responsible Officials and Corrective Action Plan The District acknowledges the need to strengthen the staff?s compliance to policies and procedures related to equipment tracking and property records. ECF is a new program and there was an urgent need for the District to provide the necessary equipment for connectivity to meet the remote learning needs of students/school staff during the COVID-19 emergency period. Beginning January 3, 2023, the District will provide additional training to staff as needed and will reiterate the policies and procedures to ensure compliance with program requirements. The District will conduct a thorough review of devices distributed to students/school staff prior to requesting any reimbursement from the program administrator to ensure compliance with the per-user limitation requirement. Name: Aaron Wai Title: Admin Services Manager, Information Technology Division E-mail: aaron.wai@lausd.net
FINDING 2022-003 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 or Years (or Other Identifying Numbers): S425D200013, S425D2100013, 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 was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation hired a third-party to complete capital asset records every two years. The third-party updated the capital assets records through the school year ended June 30, 2021; however, neither the third-party, nor the School Corporation maintained the records beyond that year. During fiscal year 2021-2022, the School Corporation purchased $1,081,254 of equipment for the boiler/chiller project with Elementary and Secondary School Emergency Relief (ESSER) III funds. The boiler/chiller project was not added to the property record which 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), 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, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property . The lack of internal controls and noncompliance were isolated to the property records for 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 200.313(d)(1) states: "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." Cause Management had not developed a system of internal controls that would have ensured compliance with 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 2022-004 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Number or Year (or Other Identifying Number): S425D200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, or implemented a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) annual data reports were complete and accurately submitted. The reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, for one of seven key line items tested, the School Corporation could not provide supporting documentation. The lack of supporting documentation for the Full Time Equivalent (FTE) key line item on the ESSER I, Year 1, annual report prevented us from verifying the accuracy of the line item. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 1 report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system 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 2022-005 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 or Years (or Other Identifying Numbers): S425D200013, S425D2100013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Finding: Material Weakness Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the 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 the required clause in the contract and received the payroll; however, the School Corporation did not have adequate policies or procedures to ensure that the required payrolls were submitted and reviewed for each week in which contract work was performed. The lack of internal controls was systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause Management had not developed or 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 could have enabled material noncompliance to go undetected. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 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 or Years (or Other Identifying Numbers): S425D200013, S425D2100013, 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 was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation hired a third-party to complete capital asset records every two years. The third-party updated the capital assets records through the school year ended June 30, 2021; however, neither the third-party, nor the School Corporation maintained the records beyond that year. During fiscal year 2021-2022, the School Corporation purchased $1,081,254 of equipment for the boiler/chiller project with Elementary and Secondary School Emergency Relief (ESSER) III funds. The boiler/chiller project was not added to the property record which 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), 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, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property . The lack of internal controls and noncompliance were isolated to the property records for 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 200.313(d)(1) states: "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." Cause Management had not developed a system of internal controls that would have ensured compliance with 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 2022-004 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Number or Year (or Other Identifying Number): S425D200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, or implemented a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) annual data reports were complete and accurately submitted. The reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, for one of seven key line items tested, the School Corporation could not provide supporting documentation. The lack of supporting documentation for the Full Time Equivalent (FTE) key line item on the ESSER I, Year 1, annual report prevented us from verifying the accuracy of the line item. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the ESSER I, Year 1 report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system 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 2022-005 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 or Years (or Other Identifying Numbers): S425D200013, S425D2100013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Finding: Material Weakness Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the 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 the required clause in the contract and received the payroll; however, the School Corporation did not have adequate policies or procedures to ensure that the required payrolls were submitted and reviewed for each week in which contract work was performed. The lack of internal controls was systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause Management had not developed or 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 could have enabled material noncompliance to go undetected. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 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 or Years (or Other Identifying Numbers): S425D200013, S425D2100013, 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 was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation hired a third-party to complete capital asset records every two years. The third-party updated the capital assets records through the school year ended June 30, 2021; however, neither the third-party, nor the School Corporation maintained the records beyond that year. During fiscal year 2021-2022, the School Corporation purchased $1,081,254 of equipment for the boiler/chiller project with Elementary and Secondary School Emergency Relief (ESSER) III funds. The boiler/chiller project was not added to the property record which 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), 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, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property . The lack of internal controls and noncompliance were isolated to the property records for 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 200.313(d)(1) states: "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." Cause Management had not developed a system of internal controls that would have ensured compliance with 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 - 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 or Years (or Other Identifying Numbers): S425D200013, S425D2100013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Finding: Material Weakness Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the 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 the required clause in the contract and received the payroll; however, the School Corporation did not have adequate policies or procedures to ensure that the required payrolls were submitted and reviewed for each week in which contract work was performed. The lack of internal controls was systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause Management had not developed or 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 could have enabled material noncompliance to go undetected. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 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 or Years (or Other Identifying Numbers): S425D200013, S425D2100013, 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 was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation hired a third-party to complete capital asset records every two years. The third-party updated the capital assets records through the school year ended June 30, 2021; however, neither the third-party, nor the School Corporation maintained the records beyond that year. During fiscal year 2021-2022, the School Corporation purchased $1,081,254 of equipment for the boiler/chiller project with Elementary and Secondary School Emergency Relief (ESSER) III funds. The boiler/chiller project was not added to the property record which 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), 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, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property . The lack of internal controls and noncompliance were isolated to the property records for 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 200.313(d)(1) states: "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." Cause Management had not developed a system of internal controls that would have ensured compliance with 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 - 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 or Years (or Other Identifying Numbers): S425D200013, S425D2100013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Finding: Material Weakness Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the 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 the required clause in the contract and received the payroll; however, the School Corporation did not have adequate policies or procedures to ensure that the required payrolls were submitted and reviewed for each week in which contract work was performed. The lack of internal controls was systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause Management had not developed or 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 could have enabled material noncompliance to go undetected. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2022-001: Special Tests and Provisions: Enrollment Reporting Program Name: Student Financial Assistance Cluster: Federal Direct Student Loans. Assistance Listing No. 84.268 Federal Pell Grant Program, Assistance Listing No. 84.063 Awarding Agency: U.S. Department of Education Finding Type: Significant Deficiency on Internal Controls over Compliance Questioned Costs: None Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, 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). In addition, the Department of Education relies on institution?s enrollments reports to determine a student?s enrollment status based on reductions or increases in attendance levels, withdrawals, graduations or approved leaves-of- absence. According to 34 CFR 690.83(b)(2) and 685.309, the University is required to submit changes in student attendance to to the National Student Loan Data System (NSLDS) at a minimum of every 60 days. Context/Condition: Of the 25 students selected for enrollment reporting testing, five students within the sample were reported to NSLDS outside the maximum 60-day window. This was not a statistically valid sample. Cause: The University did not have effective controls in place to ensure timely reporting of all status changes. Effect: Without timely notification of withdrawals or graduation, the NSLDS is unable to accurately determine when a student enters repayment status. Recommendation: We recommend that the University review and update internal controls to ensure student enrollment status in the NSLDS is updated in a timely manner to ensure compliance with Federal requirements. Views of Responsible Officials: Management agrees with the finding. See accompanying Corrective Action Plan.
Finding 2022-001: Special Tests and Provisions: Enrollment Reporting Program Name: Student Financial Assistance Cluster: Federal Direct Student Loans. Assistance Listing No. 84.268 Federal Pell Grant Program, Assistance Listing No. 84.063 Awarding Agency: U.S. Department of Education Finding Type: Significant Deficiency on Internal Controls over Compliance Questioned Costs: None Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, 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). In addition, the Department of Education relies on institution?s enrollments reports to determine a student?s enrollment status based on reductions or increases in attendance levels, withdrawals, graduations or approved leaves-of- absence. According to 34 CFR 690.83(b)(2) and 685.309, the University is required to submit changes in student attendance to to the National Student Loan Data System (NSLDS) at a minimum of every 60 days. Context/Condition: Of the 25 students selected for enrollment reporting testing, five students within the sample were reported to NSLDS outside the maximum 60-day window. This was not a statistically valid sample. Cause: The University did not have effective controls in place to ensure timely reporting of all status changes. Effect: Without timely notification of withdrawals or graduation, the NSLDS is unable to accurately determine when a student enters repayment status. Recommendation: We recommend that the University review and update internal controls to ensure student enrollment status in the NSLDS is updated in a timely manner to ensure compliance with Federal requirements. Views of Responsible Officials: Management agrees with the finding. See accompanying Corrective Action Plan.
FINDING 2022-001 Information on the federal program: Subject: Child Nutrition Cluster ? Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Numbers: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the reporting compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the reporting requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: We noted that for four claims in a sample of four, the Food Services Director prepared the sponsor claim reimbursement summary without a secondary, documented review to ensure the accuracy of the sponsor claim reimbursement summary. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation establish a review control to verify the sponsor claim reimbursement summaries are correct. This review should be performed by someone other than the individual submitting the claims and we recommend this review be formally documented. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-001 Information on the federal program: Subject: Child Nutrition Cluster ? Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Numbers: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the reporting compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the reporting requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: We noted that for four claims in a sample of four, the Food Services Director prepared the sponsor claim reimbursement summary without a secondary, documented review to ensure the accuracy of the sponsor claim reimbursement summary. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation establish a review control to verify the sponsor claim reimbursement summaries are correct. This review should be performed by someone other than the individual submitting the claims and we recommend this review be formally documented. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-001 Information on the federal program: Subject: Child Nutrition Cluster ? Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Numbers: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the reporting compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the reporting requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: We noted that for four claims in a sample of four, the Food Services Director prepared the sponsor claim reimbursement summary without a secondary, documented review to ensure the accuracy of the sponsor claim reimbursement summary. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation establish a review control to verify the sponsor claim reimbursement summaries are correct. This review should be performed by someone other than the individual submitting the claims and we recommend this review be formally documented. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-001 Information on the federal program: Subject: Child Nutrition Cluster ? Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Numbers: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the reporting compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the reporting requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: We noted that for four claims in a sample of four, the Food Services Director prepared the sponsor claim reimbursement summary without a secondary, documented review to ensure the accuracy of the sponsor claim reimbursement summary. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation establish a review control to verify the sponsor claim reimbursement summaries are correct. This review should be performed by someone other than the individual submitting the claims and we recommend this review be formally documented. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-001 Information on the federal program: Subject: Child Nutrition Cluster ? Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Numbers: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the reporting compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the reporting requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: We noted that for four claims in a sample of four, the Food Services Director prepared the sponsor claim reimbursement summary without a secondary, documented review to ensure the accuracy of the sponsor claim reimbursement summary. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation establish a review control to verify the sponsor claim reimbursement summaries are correct. This review should be performed by someone other than the individual submitting the claims and we recommend this review be formally documented. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.