FINDING 2022-005 Information on the federal program: Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027, 84.173 Federal Award Number: 20611-001-PN01, 21619-001-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Significant Deficiency Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:? (g) Be adequately documented.... " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed..." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range Condition: The School Corporation is a member of the Adams Wells Special Services Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its member schools. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the school corporation was responsible for ensuring and providing oversight of the Cooperative. There was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreements and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect: The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The Non-Public Proportionate Share expenditures for the 20611-001-PN01 and 21619-001-PN01 grant awards could not be verified for the individual member schools. Total non-public expenditures were posted as expended. The member school proportionate share expenditures were then determined by applying a budgeted percentage to the total non-public expenditures. These were the amounts reported to IDOE. As such, we were unable to identify if the minimum amount per member school was expended and properly reported to IDOE as required. The School Corporation?s Non-Public Proportionate Share for the 20611-001-PN01 and 21619-001-PN01 grant applications was $1,975 and $0, respectively. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish an effective system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-005 Information on the federal program: Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027, 84.173 Federal Award Number: 20611-001-PN01, 21619-001-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Significant Deficiency Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:? (g) Be adequately documented.... " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed..." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range Condition: The School Corporation is a member of the Adams Wells Special Services Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its member schools. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the school corporation was responsible for ensuring and providing oversight of the Cooperative. There was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreements and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect: The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The Non-Public Proportionate Share expenditures for the 20611-001-PN01 and 21619-001-PN01 grant awards could not be verified for the individual member schools. Total non-public expenditures were posted as expended. The member school proportionate share expenditures were then determined by applying a budgeted percentage to the total non-public expenditures. These were the amounts reported to IDOE. As such, we were unable to identify if the minimum amount per member school was expended and properly reported to IDOE as required. The School Corporation?s Non-Public Proportionate Share for the 20611-001-PN01 and 21619-001-PN01 grant applications was $1,975 and $0, respectively. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish an effective system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-005 Information on the federal program: Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027, 84.173 Federal Award Number: 20611-001-PN01, 21619-001-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Significant Deficiency Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:? (g) Be adequately documented.... " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed..." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range Condition: The School Corporation is a member of the Adams Wells Special Services Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its member schools. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the school corporation was responsible for ensuring and providing oversight of the Cooperative. There was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreements and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect: The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The Non-Public Proportionate Share expenditures for the 20611-001-PN01 and 21619-001-PN01 grant awards could not be verified for the individual member schools. Total non-public expenditures were posted as expended. The member school proportionate share expenditures were then determined by applying a budgeted percentage to the total non-public expenditures. These were the amounts reported to IDOE. As such, we were unable to identify if the minimum amount per member school was expended and properly reported to IDOE as required. The School Corporation?s Non-Public Proportionate Share for the 20611-001-PN01 and 21619-001-PN01 grant applications was $1,975 and $0, respectively. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish an effective system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-005 Information on the federal program: Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027, 84.173 Federal Award Number: 20611-001-PN01, 21619-001-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Significant Deficiency Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:? (g) Be adequately documented.... " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed..." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range Condition: The School Corporation is a member of the Adams Wells Special Services Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its member schools. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the school corporation was responsible for ensuring and providing oversight of the Cooperative. There was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreements and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect: The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The Non-Public Proportionate Share expenditures for the 20611-001-PN01 and 21619-001-PN01 grant awards could not be verified for the individual member schools. Total non-public expenditures were posted as expended. The member school proportionate share expenditures were then determined by applying a budgeted percentage to the total non-public expenditures. These were the amounts reported to IDOE. As such, we were unable to identify if the minimum amount per member school was expended and properly reported to IDOE as required. The School Corporation?s Non-Public Proportionate Share for the 20611-001-PN01 and 21619-001-PN01 grant applications was $1,975 and $0, respectively. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish an effective system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-005 Information on the federal program: Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027, 84.173 Federal Award Number: 20611-001-PN01, 21619-001-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Significant Deficiency Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:? (g) Be adequately documented.... " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed..." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range Condition: The School Corporation is a member of the Adams Wells Special Services Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its member schools. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the school corporation was responsible for ensuring and providing oversight of the Cooperative. There was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreements and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect: The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The Non-Public Proportionate Share expenditures for the 20611-001-PN01 and 21619-001-PN01 grant awards could not be verified for the individual member schools. Total non-public expenditures were posted as expended. The member school proportionate share expenditures were then determined by applying a budgeted percentage to the total non-public expenditures. These were the amounts reported to IDOE. As such, we were unable to identify if the minimum amount per member school was expended and properly reported to IDOE as required. The School Corporation?s Non-Public Proportionate Share for the 20611-001-PN01 and 21619-001-PN01 grant applications was $1,975 and $0, respectively. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish an effective system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-005 Information on the federal program: Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027, 84.173 Federal Award Number: 20611-001-PN01, 21619-001-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Significant Deficiency Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:? (g) Be adequately documented.... " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed..." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range Condition: The School Corporation is a member of the Adams Wells Special Services Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its member schools. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the school corporation was responsible for ensuring and providing oversight of the Cooperative. There was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreements and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect: The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The Non-Public Proportionate Share expenditures for the 20611-001-PN01 and 21619-001-PN01 grant awards could not be verified for the individual member schools. Total non-public expenditures were posted as expended. The member school proportionate share expenditures were then determined by applying a budgeted percentage to the total non-public expenditures. These were the amounts reported to IDOE. As such, we were unable to identify if the minimum amount per member school was expended and properly reported to IDOE as required. The School Corporation?s Non-Public Proportionate Share for the 20611-001-PN01 and 21619-001-PN01 grant applications was $1,975 and $0, respectively. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish an effective system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-005 Information on the federal program: Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027, 84.173 Federal Award Number: 20611-001-PN01, 21619-001-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Significant Deficiency Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:? (g) Be adequately documented.... " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed..." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range Condition: The School Corporation is a member of the Adams Wells Special Services Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its member schools. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the school corporation was responsible for ensuring and providing oversight of the Cooperative. There was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreements and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect: The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The Non-Public Proportionate Share expenditures for the 20611-001-PN01 and 21619-001-PN01 grant awards could not be verified for the individual member schools. Total non-public expenditures were posted as expended. The member school proportionate share expenditures were then determined by applying a budgeted percentage to the total non-public expenditures. These were the amounts reported to IDOE. As such, we were unable to identify if the minimum amount per member school was expended and properly reported to IDOE as required. The School Corporation?s Non-Public Proportionate Share for the 20611-001-PN01 and 21619-001-PN01 grant applications was $1,975 and $0, respectively. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish an effective system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-005 Information on the federal program: Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027, 84.173 Federal Award Number: 20611-001-PN01, 21619-001-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Significant Deficiency Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:? (g) Be adequately documented.... " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed..." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range Condition: The School Corporation is a member of the Adams Wells Special Services Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its member schools. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the school corporation was responsible for ensuring and providing oversight of the Cooperative. There was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreements and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect: The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The Non-Public Proportionate Share expenditures for the 20611-001-PN01 and 21619-001-PN01 grant awards could not be verified for the individual member schools. Total non-public expenditures were posted as expended. The member school proportionate share expenditures were then determined by applying a budgeted percentage to the total non-public expenditures. These were the amounts reported to IDOE. As such, we were unable to identify if the minimum amount per member school was expended and properly reported to IDOE as required. The School Corporation?s Non-Public Proportionate Share for the 20611-001-PN01 and 21619-001-PN01 grant applications was $1,975 and $0, respectively. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish an effective system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-006 Information on the federal program: 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 Numbers: 84.425D, 84.425U 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: Significant Deficiency 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." Condition: 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. Cause: Management had not developed a system of internal control that would have ensured compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: During the audit period, the School Corporation expended $1,685,526 in Economic Stabilization Funds (ESSER) for a building project. Although this project was included in the School Corporation?s capital asset records, it was recorded at the estimated total project cost of $6,256,000. In addition, the School Corporation did not designate the amount of the project that was paid with federal grant funds. The lack of internal controls was limited to the building project. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management does not agree with the finding and has prepared a corrective action plan.
FINDING 2022-007 Information on the federal program: Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425U Federal Award Numbers or Years (or Other Identifying Numbers): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Finding: Material Weakness, Qualified Opinion 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). . . ." Condition: An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions -? Wage Rate Requirements compliance requirement. All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid 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. SOUTH ADAMS SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS July 1, 2020 through June 30, 2022 54. Section III ? Federal Award Findings and Questioned Costs (Continued) FINDING 2022-007 (Continued) 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 enabled material noncompliance to go undetected. Questioned Costs: There were no questioned costs identified. Context: 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. Identification as a repeat finding: No. 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 and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-006 Information on the federal program: 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 Numbers: 84.425D, 84.425U 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: Significant Deficiency 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." Condition: 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. Cause: Management had not developed a system of internal control that would have ensured compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: During the audit period, the School Corporation expended $1,685,526 in Economic Stabilization Funds (ESSER) for a building project. Although this project was included in the School Corporation?s capital asset records, it was recorded at the estimated total project cost of $6,256,000. In addition, the School Corporation did not designate the amount of the project that was paid with federal grant funds. The lack of internal controls was limited to the building project. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management does not agree with the finding and has prepared a corrective action plan.
FINDING 2022-007 Information on the federal program: Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425U Federal Award Numbers or Years (or Other Identifying Numbers): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Finding: Material Weakness, Qualified Opinion 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). . . ." Condition: An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions -? Wage Rate Requirements compliance requirement. All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid 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. SOUTH ADAMS SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS July 1, 2020 through June 30, 2022 54. Section III ? Federal Award Findings and Questioned Costs (Continued) FINDING 2022-007 (Continued) 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 enabled material noncompliance to go undetected. Questioned Costs: There were no questioned costs identified. Context: 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. Identification as a repeat finding: No. 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 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 - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Other Matters 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 awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.318(i) states: "The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." 2 CFR 200.320(b) (Uniform Guidance) states: "Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a noncompetitive procurement can be used in accordance with ? 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bids method is the preferred method for procuring construction, if the conditions. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: 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 Procurement and Suspension and Debarment compliance requirements. Cause: The School?s management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment 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 Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement When the value of procurement of property or services exceeds the simplified acquisition threshold, customarily set at $250,000, a formal bid process must take place and a contract must be awarded. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold of $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. During fiscal year 2021, the School Corporation purchased food and supply items from one vendor with total purchases that fell within the small purchase threshold. The School Corporation did not obtain quotes, nor provide full and open competition. Additionally, there was no documentation available to support the rationale to limit competition. During fiscal year 2022, the School Corporation purchased food and supply items from one vendor with total purchases that exceeded the simplified acquisition threshold. The School Corporation did not solicit bids or award a contract. Documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit. Suspension and Debarment Nonfederal entities and contractors are subject to non-procurement debarment and suspension regulations. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or are ineligible for participation in Federal assistance programs or activities. This is done by checking SAM Exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. During fiscal years 2021 and 2022, the School Corporation entered into covered transactions with one vendor exceeding $25,000 but did not verify the vendor was not suspended or debarred or otherwise excluded from or ineligible for participation in federal assistance programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2022-002 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 Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness 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 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, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Cause: Management had not designed nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect: The failure to establish an effective internal control system places the school corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had not designed, nor implemented a system of internal control to ensure the Monthly Sponsor Claim for Reimbursement (Report) was complete and accurately submitted. The Report was prepared by the Food Service Director without an oversight or review process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting requirement. 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 - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Other Matters 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 awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.318(i) states: "The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." 2 CFR 200.320(b) (Uniform Guidance) states: "Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a noncompetitive procurement can be used in accordance with ? 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bids method is the preferred method for procuring construction, if the conditions. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: 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 Procurement and Suspension and Debarment compliance requirements. Cause: The School?s management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment 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 Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement When the value of procurement of property or services exceeds the simplified acquisition threshold, customarily set at $250,000, a formal bid process must take place and a contract must be awarded. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold of $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. During fiscal year 2021, the School Corporation purchased food and supply items from one vendor with total purchases that fell within the small purchase threshold. The School Corporation did not obtain quotes, nor provide full and open competition. Additionally, there was no documentation available to support the rationale to limit competition. During fiscal year 2022, the School Corporation purchased food and supply items from one vendor with total purchases that exceeded the simplified acquisition threshold. The School Corporation did not solicit bids or award a contract. Documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit. Suspension and Debarment Nonfederal entities and contractors are subject to non-procurement debarment and suspension regulations. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or are ineligible for participation in Federal assistance programs or activities. This is done by checking SAM Exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. During fiscal years 2021 and 2022, the School Corporation entered into covered transactions with one vendor exceeding $25,000 but did not verify the vendor was not suspended or debarred or otherwise excluded from or ineligible for participation in federal assistance programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2022-002 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 Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness 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 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, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Cause: Management had not designed nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect: The failure to establish an effective internal control system places the school corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had not designed, nor implemented a system of internal control to ensure the Monthly Sponsor Claim for Reimbursement (Report) was complete and accurately submitted. The Report was prepared by the Food Service Director without an oversight or review process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting requirement. 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 - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Other Matters 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 awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.318(i) states: "The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." 2 CFR 200.320(b) (Uniform Guidance) states: "Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a noncompetitive procurement can be used in accordance with ? 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bids method is the preferred method for procuring construction, if the conditions. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: 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 Procurement and Suspension and Debarment compliance requirements. Cause: The School?s management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment 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 Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement When the value of procurement of property or services exceeds the simplified acquisition threshold, customarily set at $250,000, a formal bid process must take place and a contract must be awarded. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold of $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. During fiscal year 2021, the School Corporation purchased food and supply items from one vendor with total purchases that fell within the small purchase threshold. The School Corporation did not obtain quotes, nor provide full and open competition. Additionally, there was no documentation available to support the rationale to limit competition. During fiscal year 2022, the School Corporation purchased food and supply items from one vendor with total purchases that exceeded the simplified acquisition threshold. The School Corporation did not solicit bids or award a contract. Documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit. Suspension and Debarment Nonfederal entities and contractors are subject to non-procurement debarment and suspension regulations. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or are ineligible for participation in Federal assistance programs or activities. This is done by checking SAM Exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. During fiscal years 2021 and 2022, the School Corporation entered into covered transactions with one vendor exceeding $25,000 but did not verify the vendor was not suspended or debarred or otherwise excluded from or ineligible for participation in federal assistance programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2022-002 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 Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness 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 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, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Cause: Management had not designed nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect: The failure to establish an effective internal control system places the school corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had not designed, nor implemented a system of internal control to ensure the Monthly Sponsor Claim for Reimbursement (Report) was complete and accurately submitted. The Report was prepared by the Food Service Director without an oversight or review process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-003 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded with?out soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. There were no documented internal controls over procurements made under the small and micro-purchase thresholds. For 3 of 6 purchases tested totaling $95,000, the School Corporation did not provide audit evidence that price quotations had been requested for purchases exceeding $10,000, but less than $150,000. Additionally, the School Corporation did not provide audit evidence that the one vendor paid $25,000 was verified to not be excluded or disqualified from participation in federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) (Uniform Guidance) states: "The non-Federal entity must use its own docu-mented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.318(a) (Revised Uniform Guidance) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acqui?sition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must confirm to the procurement standards identified in ?? 200.317 through 200.327." 2 CFR 200.320(b) (Uniform Guidance) states: "Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procure?ment methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases ? LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000). . . . (d) If the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed a system of internal controls that would have ensured compliance with the compliance requirement listed above. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal con-trols to ensure compliance and comply with the grant agreement and the Procurements and Suspension and Debarment compliance requirement. LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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: Child Nutrition Cluster - Special Tests and Provisions - School Food Service Accounts Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - School Food Service Accounts Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions - School Food Service Accounts compliance requirement. There was an internal control in place over the recording of receipts from the federal program claimed on the reimbursement claims, but it was not operating effectively. There were no documented internal controls over other types of receipts such as rebates and credits. Additionally, one of five reim-bursement receipts tested was not recorded in the financial records until 45 days after receipt. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." All financial transactions pertaining to the unit must be recorded in the records of the unit at the time of the transaction. (Accounting and Uniform Compliance Guidelines Manual for Indiana Public School Corporations, Chapter 1) All documents and entries to records must be made in a timely manner to ensure that accurate financial information is available to allow the unit to make informed management decisions and to help ensure compliance with IC 5-15-1-1. (Accounting and Uniform Compliance Guidelines Manual for Indiana Public School Corporations, Chapter 1) LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not developed a system of internal controls that would have ensured compliance with the compliance requirement listed above. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and Provisions - School Food Service Accounts compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal con-trols, to ensure compliance and comply with the grant agreement and the Special Tests and Provisions - School Food Service Accounts 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: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting 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 Reporting compliance requirement. The School Corporation had not designed, or implemented a system of internal control to ensure that the monthly claims for reimbursement were complete and accurately submitted. The monthly claims for reimbursement were prepared by the Business Manager without an oversight or review process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to design and implement an effective system of internal control could have enabled noncompliance with the grant agreement and the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting 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 Reporting compliance requirement. The School Corporation had not designed, or implemented a system of internal control to ensure that the monthly claims for reimbursement were complete and accurately submitted. The monthly claims for reimbursement were prepared by the Business Manager without an oversight or review process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to design and implement an effective system of internal control could have enabled noncompliance with the grant agreement and the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting 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 Reporting compliance requirement. The School Corporation had not designed, or implemented a system of internal control to ensure that the monthly claims for reimbursement were complete and accurately submitted. The monthly claims for reimbursement were prepared by the Business Manager without an oversight or review process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to design and implement an effective system of internal control could have enabled noncompliance with the grant agreement and the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting 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 Reporting compliance requirement. The School Corporation had not designed, or implemented a system of internal control to ensure that the monthly claims for reimbursement were complete and accurately submitted. The monthly claims for reimbursement were prepared by the Business Manager without an oversight or review process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to design and implement an effective system of internal control could have enabled noncompliance with the grant agreement and the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting 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 Reporting compliance requirement. The School Corporation had not designed, or implemented a system of internal control to ensure that the monthly claims for reimbursement were complete and accurately submitted. The monthly claims for reimbursement were prepared by the Business Manager without an oversight or review process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to design and implement an effective system of internal control could have enabled noncompliance with the grant agreement and the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting 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 Reporting compliance requirement. The School Corporation had not designed, or implemented a system of internal control to ensure that the monthly claims for reimbursement were complete and accurately submitted. The monthly claims for reimbursement were prepared by the Business Manager without an oversight or review process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to design and implement an effective system of internal control could have enabled noncompliance with the grant agreement and the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: Child Nutrition Cluster - Reporting Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting 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 Reporting compliance requirement. The School Corporation had not designed, or implemented a system of internal control to ensure that the monthly claims for reimbursement were complete and accurately submitted. The monthly claims for reimbursement were prepared by the Business Manager without an oversight or review process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to design and implement an effective system of internal control could have enabled noncompliance with the grant agreement and the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance 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.
FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Period of Performance 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 COVID-19 ? 84.425W ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund ? Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: $108,220 Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund program revealed that the School District?s internal control procedures were not operating appropriately to ensure that expenditures were allowable for the 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 $12,214,096 were expended and reported on the Tattnall 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 200.403 ? 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? (h) Cost must be incurred during the approved budget period?? Additionally, provisions included in the Uniform Guidance, Section 200.77 state, ?Period of performance means the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award.? Further, 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. Condition: A sample of 60 non-personal services expenditures was randomly selected for testing using a non-statistical sampling approach. In addition, equipment purchases were tested. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. This testing revealed the following deficiencies: ? Eight bus cameras, including installation fees, were purchased but were not installed and placed in service. These cameras were reflected on the Consolidated Application approved by GaDOE; however, the detailed budget line item stated that the cameras were to be installed and utilized, not stored in the event of future bus purchases. Therefore, $37,973 of these expenditures were deemed unallowable. ? Subscription charges related to bus cameras purchased were paid for a five-year period. Because the period of performance for this funding ends on September 30, 2024 and the liquidation period for the program ends 120 days thereafter, $69,034 of these expenditures were incurred after the period performance and deemed unallowable. ? One expenditure totaling $1,213 was not approved by GaDOE through the Consolidated Application process as required. Questioned Costs: Upon testing a sample of $257,408 in non-personal services expenditures, known questioned costs of $1,213 were identified. Using the total non-personal services expenditures population of $6,472,730, we project the likely questioned costs to be approximately $30,501. In addition, known questioned costs of $107,007 were also identified for expenditures that were not tested as part of a sample and were not incurred for a necessary and reasonable purpose and/or during the appropriate period. Therefore, the known questioned costs identified for the ESSER program totaled $108,220. Cause: In discussing these deficiencies with management, they stated that the Consolidated Application included the unallowable items purchased; however, the description reflected on the Consolidated Application did not agree to the items purchased. In addition, management was unaware that extra equipment and the multi-year service agreements on equipment were not allowable expenditures. Effect: The School District is not in compliance with the Uniform Guidance or GaDOE guidance related to the ESSER program. Additionally, failure to verify compliance with applicable policies and regulations, including reviewing approved budgets prior to the expenditure of federal program funds and ensuring that expenditures are incurred for a necessary and reasonable purpose and within the appropriate period of performance, 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 develop and/or modify its policies and procedures to ensure that potential expenditures are approved through the Consolidated Application process, fall within the respective federal program?s period of performance, and are deemed to be allowable before spending federal funds. 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 2022-002 Improve Controls over Equipment Compliance Requirement: Equipment and Real Property Management Internal Control Impact: Material Weakness Compliance Impact: Material 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 COVID-19 ? 84.425W ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund ? Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021), S425W210011 (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 $12,214,096 were expended and reported on the Tattnall 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 physically locating five equipment items: ? Property records did not include the following required components for all items tested: (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) percentage of Federal participation in the project costs for the Federal award under which the property was acquired, (6) the location, and (7) use and condition of the property. ? Two pieces of equipment with costs totaling $19,387 could not be physically located based on information included in the property records, and these items reflected serial numbers that did not agree to accounting records. ? The appropriate safeguarding and maintenance of three pieces of equipment with costs totaling $105,674 could not be determined based on the information included within the property records. ? While a physical inventory was performed, the results were not effectively reconciled to the equipment listing. Cause: In discussing these deficiencies with management, they stated that there are multiple inventory lists maintained by various personnel; however, there was no consistency among the listings. 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 2022-002 Improve Controls over Equipment Compliance Requirement: Equipment and Real Property Management Internal Control Impact: Material Weakness Compliance Impact: Material 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 COVID-19 ? 84.425W ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund ? Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021), S425W210011 (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 $12,214,096 were expended and reported on the Tattnall 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 physically locating five equipment items: ? Property records did not include the following required components for all items tested: (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) percentage of Federal participation in the project costs for the Federal award under which the property was acquired, (6) the location, and (7) use and condition of the property. ? Two pieces of equipment with costs totaling $19,387 could not be physically located based on information included in the property records, and these items reflected serial numbers that did not agree to accounting records. ? The appropriate safeguarding and maintenance of three pieces of equipment with costs totaling $105,674 could not be determined based on the information included within the property records. ? While a physical inventory was performed, the results were not effectively reconciled to the equipment listing. Cause: In discussing these deficiencies with management, they stated that there are multiple inventory lists maintained by various personnel; however, there was no consistency among the listings. 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 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Period of Performance 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 COVID-19 ? 84.425W ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund ? Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: $108,220 Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund program revealed that the School District?s internal control procedures were not operating appropriately to ensure that expenditures were allowable for the 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 $12,214,096 were expended and reported on the Tattnall 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 200.403 ? 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? (h) Cost must be incurred during the approved budget period?? Additionally, provisions included in the Uniform Guidance, Section 200.77 state, ?Period of performance means the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award.? Further, 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. Condition: A sample of 60 non-personal services expenditures was randomly selected for testing using a non-statistical sampling approach. In addition, equipment purchases were tested. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. This testing revealed the following deficiencies: ? Eight bus cameras, including installation fees, were purchased but were not installed and placed in service. These cameras were reflected on the Consolidated Application approved by GaDOE; however, the detailed budget line item stated that the cameras were to be installed and utilized, not stored in the event of future bus purchases. Therefore, $37,973 of these expenditures were deemed unallowable. ? Subscription charges related to bus cameras purchased were paid for a five-year period. Because the period of performance for this funding ends on September 30, 2024 and the liquidation period for the program ends 120 days thereafter, $69,034 of these expenditures were incurred after the period performance and deemed unallowable. ? One expenditure totaling $1,213 was not approved by GaDOE through the Consolidated Application process as required. Questioned Costs: Upon testing a sample of $257,408 in non-personal services expenditures, known questioned costs of $1,213 were identified. Using the total non-personal services expenditures population of $6,472,730, we project the likely questioned costs to be approximately $30,501. In addition, known questioned costs of $107,007 were also identified for expenditures that were not tested as part of a sample and were not incurred for a necessary and reasonable purpose and/or during the appropriate period. Therefore, the known questioned costs identified for the ESSER program totaled $108,220. Cause: In discussing these deficiencies with management, they stated that the Consolidated Application included the unallowable items purchased; however, the description reflected on the Consolidated Application did not agree to the items purchased. In addition, management was unaware that extra equipment and the multi-year service agreements on equipment were not allowable expenditures. Effect: The School District is not in compliance with the Uniform Guidance or GaDOE guidance related to the ESSER program. Additionally, failure to verify compliance with applicable policies and regulations, including reviewing approved budgets prior to the expenditure of federal program funds and ensuring that expenditures are incurred for a necessary and reasonable purpose and within the appropriate period of performance, 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 develop and/or modify its policies and procedures to ensure that potential expenditures are approved through the Consolidated Application process, fall within the respective federal program?s period of performance, and are deemed to be allowable before spending federal funds. 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 2022-002 Improve Controls over Equipment Compliance Requirement: Equipment and Real Property Management Internal Control Impact: Material Weakness Compliance Impact: Material 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 COVID-19 ? 84.425W ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund ? Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021), S425W210011 (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 $12,214,096 were expended and reported on the Tattnall 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 physically locating five equipment items: ? Property records did not include the following required components for all items tested: (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) percentage of Federal participation in the project costs for the Federal award under which the property was acquired, (6) the location, and (7) use and condition of the property. ? Two pieces of equipment with costs totaling $19,387 could not be physically located based on information included in the property records, and these items reflected serial numbers that did not agree to accounting records. ? The appropriate safeguarding and maintenance of three pieces of equipment with costs totaling $105,674 could not be determined based on the information included within the property records. ? While a physical inventory was performed, the results were not effectively reconciled to the equipment listing. Cause: In discussing these deficiencies with management, they stated that there are multiple inventory lists maintained by various personnel; however, there was no consistency among the listings. 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 2022-002 Improve Controls over Equipment Compliance Requirement: Equipment and Real Property Management Internal Control Impact: Material Weakness Compliance Impact: Material 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 COVID-19 ? 84.425W ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund ? Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021), S425W210011 (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 $12,214,096 were expended and reported on the Tattnall 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 physically locating five equipment items: ? Property records did not include the following required components for all items tested: (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) percentage of Federal participation in the project costs for the Federal award under which the property was acquired, (6) the location, and (7) use and condition of the property. ? Two pieces of equipment with costs totaling $19,387 could not be physically located based on information included in the property records, and these items reflected serial numbers that did not agree to accounting records. ? The appropriate safeguarding and maintenance of three pieces of equipment with costs totaling $105,674 could not be determined based on the information included within the property records. ? While a physical inventory was performed, the results were not effectively reconciled to the equipment listing. Cause: In discussing these deficiencies with management, they stated that there are multiple inventory lists maintained by various personnel; however, there was no consistency among the listings. 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 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Period of Performance 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 COVID-19 ? 84.425W ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund ? Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: $108,220 Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund program revealed that the School District?s internal control procedures were not operating appropriately to ensure that expenditures were allowable for the 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 $12,214,096 were expended and reported on the Tattnall 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 200.403 ? 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? (h) Cost must be incurred during the approved budget period?? Additionally, provisions included in the Uniform Guidance, Section 200.77 state, ?Period of performance means the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award.? Further, 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. Condition: A sample of 60 non-personal services expenditures was randomly selected for testing using a non-statistical sampling approach. In addition, equipment purchases were tested. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. This testing revealed the following deficiencies: ? Eight bus cameras, including installation fees, were purchased but were not installed and placed in service. These cameras were reflected on the Consolidated Application approved by GaDOE; however, the detailed budget line item stated that the cameras were to be installed and utilized, not stored in the event of future bus purchases. Therefore, $37,973 of these expenditures were deemed unallowable. ? Subscription charges related to bus cameras purchased were paid for a five-year period. Because the period of performance for this funding ends on September 30, 2024 and the liquidation period for the program ends 120 days thereafter, $69,034 of these expenditures were incurred after the period performance and deemed unallowable. ? One expenditure totaling $1,213 was not approved by GaDOE through the Consolidated Application process as required. Questioned Costs: Upon testing a sample of $257,408 in non-personal services expenditures, known questioned costs of $1,213 were identified. Using the total non-personal services expenditures population of $6,472,730, we project the likely questioned costs to be approximately $30,501. In addition, known questioned costs of $107,007 were also identified for expenditures that were not tested as part of a sample and were not incurred for a necessary and reasonable purpose and/or during the appropriate period. Therefore, the known questioned costs identified for the ESSER program totaled $108,220. Cause: In discussing these deficiencies with management, they stated that the Consolidated Application included the unallowable items purchased; however, the description reflected on the Consolidated Application did not agree to the items purchased. In addition, management was unaware that extra equipment and the multi-year service agreements on equipment were not allowable expenditures. Effect: The School District is not in compliance with the Uniform Guidance or GaDOE guidance related to the ESSER program. Additionally, failure to verify compliance with applicable policies and regulations, including reviewing approved budgets prior to the expenditure of federal program funds and ensuring that expenditures are incurred for a necessary and reasonable purpose and within the appropriate period of performance, 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 develop and/or modify its policies and procedures to ensure that potential expenditures are approved through the Consolidated Application process, fall within the respective federal program?s period of performance, and are deemed to be allowable before spending federal funds. 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 2022-002 Improve Controls over Equipment Compliance Requirement: Equipment and Real Property Management Internal Control Impact: Material Weakness Compliance Impact: Material 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 COVID-19 ? 84.425W ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund ? Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021), S425W210011 (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 $12,214,096 were expended and reported on the Tattnall 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 physically locating five equipment items: ? Property records did not include the following required components for all items tested: (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) percentage of Federal participation in the project costs for the Federal award under which the property was acquired, (6) the location, and (7) use and condition of the property. ? Two pieces of equipment with costs totaling $19,387 could not be physically located based on information included in the property records, and these items reflected serial numbers that did not agree to accounting records. ? The appropriate safeguarding and maintenance of three pieces of equipment with costs totaling $105,674 could not be determined based on the information included within the property records. ? While a physical inventory was performed, the results were not effectively reconciled to the equipment listing. Cause: In discussing these deficiencies with management, they stated that there are multiple inventory lists maintained by various personnel; however, there was no consistency among the listings. 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 2022-002 Improve Controls over Equipment Compliance Requirement: Equipment and Real Property Management Internal Control Impact: Material Weakness Compliance Impact: Material 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 COVID-19 ? 84.425W ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund ? Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021), S425W210011 (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 $12,214,096 were expended and reported on the Tattnall 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 physically locating five equipment items: ? Property records did not include the following required components for all items tested: (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) percentage of Federal participation in the project costs for the Federal award under which the property was acquired, (6) the location, and (7) use and condition of the property. ? Two pieces of equipment with costs totaling $19,387 could not be physically located based on information included in the property records, and these items reflected serial numbers that did not agree to accounting records. ? The appropriate safeguarding and maintenance of three pieces of equipment with costs totaling $105,674 could not be determined based on the information included within the property records. ? While a physical inventory was performed, the results were not effectively reconciled to the equipment listing. Cause: In discussing these deficiencies with management, they stated that there are multiple inventory lists maintained by various personnel; however, there was no consistency among the listings. 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.
2022-050 Oregon Health Authority Improve review of expenditure transactions Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.268 Immunization Cooperative Agreements (COVID-19) Federal Award Numbers and Years: 5 NH23IP922626, 2022 (COVID-19); 6 NH23IP922626, 2022 (COVID-19) Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Type of Finding: Significant Deficiency Prior Year Finding: N/A Questioned Costs: N/A Criteria: 2 CFR 200.303 During fiscal year 2022, payroll for the Oregon Health Authority was processed through the Oregon State Payroll Application (OSPA). As part of each monthly payroll cycle, managers are expected to review and approve employee?s reported hours to ensure expenditures are accurate and are billed to the correct program(s). Although state policy requires managers to review the timesheets, the automated controls in the system will process the payroll without a review, effectively making the managerial review optional. The OSPA was retired as of November 30, 2022. However, the new Workday application that went into effect to replace the OSPA has the same weakness where payroll will process without regard for the managerial review. As part of our testing of program expenditures, we found that 3 of 134 timesheets were not reviewed by a manager prior to release into the payroll system. For each of these items, we were able to perform alternative procedures to verify that the amounts charged to the program were appropriate and there are no questioned costs. However, the lack of review increases the risk that inappropriate payroll costs may be charged to the program. We recommend management implement procedures to ensure that all employee payroll submissions are properly reviewed, and payroll is appropriately charged to the correct cost center or program.
2022-045 Oregon Health Authority Submit required FFATA reports Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.268 Immunization Cooperative Agreements; 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases; 93.958 Block Grants for Community Mental Health Services; 93.959 Block Grants for Prevention and Treatment of Substance Abuse Federal Award Numbers and Years: 93.268: 5 NH23IP922626; 6 NH23IP922626; 93.323: 6 NU50CK000541; 93.958: 1B09SM083823, 2021; 93.959: 6B08TI083472, 2021; 6B08TI084667, 2022 Compliance Requirement: Reporting Type of Finding: Significant Deficiency; Noncompliance Prior Year Finding: N/A Questioned Costs: N/A Criteria: 2 CFR 170 Appendix A; 2 CFR 200.303 Federal regulations require recipients of federal awards to report certain subaward information in the FFATA Subaward Reporting System (FSRS) for subawards meeting the criteria for reporting. Reports must be submitted no later than the end of the month following the month in which the subawards were made. Federal regulations also require recipients of federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. We identified and reviewed the reporting status of all the department?s subawards subject to FFATA reporting during the audit period. We determined: ? Five of 30 Mental Health Block Grant (MHBG) subawards were not reported, totaling $4.2 million in obligations. ? 12 of 65 Substance Abuse Block Grant (SABG) subawards were not reported, totaling $6.2 million in obligations. ? Four of 37 Epidemiology and Laboratory Capacity (ELC) subawards were not reported, totaling almost $55.5 million in obligations. ? Five of 39 Immunization Cooperative Agreements subawards were not reported, totaling $6.3 million in obligations. Of the total not reported, one SABG, one ELC, and two Immunization subawards were not reported in the FSRS due to oversights in the department?s reporting process. The remaining unreported subawards resulted from the department?s suspension of FFATA reporting stemming from the federal replacement of the DUNS number with the Unique Entity Identifier (UEI) in May 2022. The department did not have UEI numbers for all subrecipients at the time of the replacement which prevented the department from submitting accurate reports. FFATA reporting was suspended through the end of state fiscal year 2022 and into the following state fiscal year. Although the department suspended FFATA reporting in the FSRS, a tracking spreadsheet was maintained that included all subaward award information needed for reporting once reporting is resumed. We recommend department management resume FFATA reporting as soon as feasible and ensure all necessary subawards are reported. We further recommend department management implement controls to ensure all subawards are appropriately tracked and reported.
2022-052 Oregon Health Authority Improve review of expenditure transactions Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (COVID-19) Federal Award Numbers and Years: 6 NU50CK000541, 2021 (COVID-19) Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Type of Finding: Significant Deficiency, Noncompliance Prior Year Finding: N/A Questioned Costs: $35,416 (known) (COVID-19) Criteria: 2 CFR 200.303 As part of our testing, we reviewed expenditures charged to the program to ensure they were properly approved and an appropriate use of program resources. We randomly selected 25 of 2,355 non-payroll transactions as the basis for our testing. For one of the transactions, there was no evidence the expenditures had been reviewed and approved as appropriate expenditures for the program. The specific transaction was for cell phones and data plans on wireless devices and consisted of 584 separate devices. Only 24 (2.5%) of those devices had been approved by a manager. The department will pay the vendor for the full amount of the invoice. Managers are expected to review the charges for their unit and verify they are directed to the proper cost center. The $35,416 in questioned costs represents the charges for the devices without approval. Also, during fiscal year 2022, payroll for the department was processed through the Oregon State Payroll Application (OSPA). As part of each monthly payroll cycle, managers are expected to review and approve employee?s reported hours to ensure expenditures are accurate and are billed to the correct program(s). Although state policy requires managers to review the timesheets, the automated controls in the system will process the payroll without a review, effectively making the managerial review optional. The OSPA was retired as of November 30, 2022; however, the replacement payroll system operates in a similar manner for managerial review. As part of our testing of payroll expenditures, we found one of 25 randomly selected timesheets were not reviewed by a manager prior to release into the payroll system. We were able to perform alternative procedures to verify the amounts charged to the program were appropriate and there are no questioned costs. The lack of review increases the risk that inappropriate costs may be charged to federal programs. We recommend management ensure wireless device charges are properly reviewed, and expenditures are charged to the correct cost center or program. We also recommend management implement procedures to ensure all employee payroll submissions are reviewed and approved by program management.
2022-045 Oregon Health Authority Submit required FFATA reports Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.268 Immunization Cooperative Agreements; 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases; 93.958 Block Grants for Community Mental Health Services; 93.959 Block Grants for Prevention and Treatment of Substance Abuse Federal Award Numbers and Years: 93.268: 5 NH23IP922626; 6 NH23IP922626; 93.323: 6 NU50CK000541; 93.958: 1B09SM083823, 2021; 93.959: 6B08TI083472, 2021; 6B08TI084667, 2022 Compliance Requirement: Reporting Type of Finding: Significant Deficiency; Noncompliance Prior Year Finding: N/A Questioned Costs: N/A Criteria: 2 CFR 170 Appendix A; 2 CFR 200.303 Federal regulations require recipients of federal awards to report certain subaward information in the FFATA Subaward Reporting System (FSRS) for subawards meeting the criteria for reporting. Reports must be submitted no later than the end of the month following the month in which the subawards were made. Federal regulations also require recipients of federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. We identified and reviewed the reporting status of all the department?s subawards subject to FFATA reporting during the audit period. We determined: ? Five of 30 Mental Health Block Grant (MHBG) subawards were not reported, totaling $4.2 million in obligations. ? 12 of 65 Substance Abuse Block Grant (SABG) subawards were not reported, totaling $6.2 million in obligations. ? Four of 37 Epidemiology and Laboratory Capacity (ELC) subawards were not reported, totaling almost $55.5 million in obligations. ? Five of 39 Immunization Cooperative Agreements subawards were not reported, totaling $6.3 million in obligations. Of the total not reported, one SABG, one ELC, and two Immunization subawards were not reported in the FSRS due to oversights in the department?s reporting process. The remaining unreported subawards resulted from the department?s suspension of FFATA reporting stemming from the federal replacement of the DUNS number with the Unique Entity Identifier (UEI) in May 2022. The department did not have UEI numbers for all subrecipients at the time of the replacement which prevented the department from submitting accurate reports. FFATA reporting was suspended through the end of state fiscal year 2022 and into the following state fiscal year. Although the department suspended FFATA reporting in the FSRS, a tracking spreadsheet was maintained that included all subaward award information needed for reporting once reporting is resumed. We recommend department management resume FFATA reporting as soon as feasible and ensure all necessary subawards are reported. We further recommend department management implement controls to ensure all subawards are appropriately tracked and reported.
2022-033 Oregon Housing and Community Services Ensure financial reports are submitted Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.568 Low-Income Home Energy Assistance Program, 93.568 Low-Income Home Energy Assistance Program (COVID-19) Federal Award Numbers and Years: 2002ORLIEA, 2020; 2102ORE5C6, 2021 (COVID-19) Compliance Requirement: Reporting Type of Finding: Material Weakness; Material Noncompliance Prior Year Finding: 2021 ? 012 Questioned Costs: N/A Criteria: 2 CFR ? 200.303(a), (c)-(d); 2 CFR ? 200.328 Department management is responsible for establishing and maintaining effective internal control that provides reasonable assurance the department is managing the federal award in compliance with the terms and conditions of the federal award. Additionally, management is responsible for evaluating and monitoring the department?s compliance with the terms and conditions of federal awards and taking prompt action when instances of noncompliance are identified. Federal Financial Reports, SF-425?s, are required to be submitted annually for each open grant award ninety days after the end of the federal fiscal year. The department did not submit SF-425?s for two of the four open grants for the federal fiscal period ended September 30, 2021. This is an improvement from the prior fiscal year when the department hadn?t submitted any of the SF-425 reports for open grants. Department management cited a federal reporting system issue where awards are not appropriately tied to the correct grant identification number, which has hindered their ability to submit financial reports. As a result, the department was not in compliance with financial reporting requirements in accordance with the terms and conditions of their grant agreements. We recommend department management work with their federal partners to determine if unsubmitted reports should be completed and to ensure reporting compliance in future fiscal periods.
2022-033 Oregon Housing and Community Services Ensure financial reports are submitted Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.568 Low-Income Home Energy Assistance Program, 93.568 Low-Income Home Energy Assistance Program (COVID-19) Federal Award Numbers and Years: 2002ORLIEA, 2020; 2102ORE5C6, 2021 (COVID-19) Compliance Requirement: Reporting Type of Finding: Material Weakness; Material Noncompliance Prior Year Finding: 2021 ? 012 Questioned Costs: N/A Criteria: 2 CFR ? 200.303(a), (c)-(d); 2 CFR ? 200.328 Department management is responsible for establishing and maintaining effective internal control that provides reasonable assurance the department is managing the federal award in compliance with the terms and conditions of the federal award. Additionally, management is responsible for evaluating and monitoring the department?s compliance with the terms and conditions of federal awards and taking prompt action when instances of noncompliance are identified. Federal Financial Reports, SF-425?s, are required to be submitted annually for each open grant award ninety days after the end of the federal fiscal year. The department did not submit SF-425?s for two of the four open grants for the federal fiscal period ended September 30, 2021. This is an improvement from the prior fiscal year when the department hadn?t submitted any of the SF-425 reports for open grants. Department management cited a federal reporting system issue where awards are not appropriately tied to the correct grant identification number, which has hindered their ability to submit financial reports. As a result, the department was not in compliance with financial reporting requirements in accordance with the terms and conditions of their grant agreements. We recommend department management work with their federal partners to determine if unsubmitted reports should be completed and to ensure reporting compliance in future fiscal periods.
2022-041 Oregon Health Authority Ensure expenditures of federal funds are recorded to the appropriate program Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.958 Block Grants for Community Mental Health Services (COVID-19), 93.959 Block Grants for Prevention and Treatment of Substance Abuse (COVID-19) Federal Award Numbers and Years: 93.958: 1B09SM083994, 1B09SM085378 (COVID-19); 93.959: 1B08TI083513, 1B08TI083963 (COVID-19) Compliance Requirement: Activities Allowed or Unallowed Type of Finding: Material Weakness; Material Noncompliance Prior Year Finding: N/A Questioned Costs: 93.958 - $2,268,421 (known COVID-19) Criteria: 2 CFR 200.303; 42 USC 300x-1 The department was required to submit a spending plan documenting the intended use of the awarded COVID-19 funding allocations under the Mental Health Block Grant (MHBG) and Substance Abuse Block Grant (SABG). The expenditure of COVID-19 funding should align with each block grant?s approved spending plan. Federal regulations also require recipients of federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal statutes, regulations, and terms and conditions of the Federal award. Our testing of state fiscal year 2022 MHBG COVID-19 expenditures identified $10.4 million in workforce development incentive payments inappropriately recorded under the MHBG. Further inquiry into the payments revealed the department determined during state fiscal year 2023 these expenditures were not included in the MHBG COVID-19 spending plans and were not allowable activities under the MHBG. The department determined incentive payments totaling $8.1 million in COVID-19 expenditures should have been recorded under the SABG in accordance with the SABG COVID-19 spending plans. The department subsequently moved the $8.1 million of the combined $10.4 million total COVID-19 incentive payment expenditures to the SABG; however, the remaining $2.3 million in incentive payment expenditures were left in the MHBG as a funding source had yet to be determined. An adjustment to the Schedule of Expenditures of Federal Awards (SEFA) was required to move the $8.1 million in COVID-19 spending from the MHBG to SABG. The remaining $2.3 million is considered questioned costs under the MHBG. We recommend department management ensure controls are properly designed and implemented to record only allowable expenditures to the appropriate federal programs.
2022-044 Oregon Health Authority Implement a consistent methodology for calculation of maintenance of effort Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.958 Block Grants for Community Mental Health Services; 93.959 Block Grants for Prevention and Treatment of Substance Abuse Federal Award Numbers and Years: 93.958: 1B09SM082625, 2020; 1B09SM083823, 2021; 1B09SM086032, 2022; 93.959: 1B08TI083068, 2020; 6B08TI083472, 2021; 6B08TI084667, 2022 Compliance Requirement: Matching, Level of Effort, Earmarking Type of Finding: Material Weakness Prior Year Finding: N/A Questioned Costs: N/A Criteria: 42 USC 300x-2(a)(1)(C); 42 USC 300x-4(b)(1); 42 USC 300x-9(c)(1); 42 USC 300x-22(b)(1)(C); 42 USC 300x-30(a); 2 CFR 200.303 The Mental Health Block Grant and Substance Abuse Block Grant are subject to various Maintenance of Effort and Earmarking requirements. These requirements ensure the department meets minimum expenditure thresholds. Federal regulations require recipients of federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Based on auditor recalculations, we determined the department was in compliance with the applicable Maintenance of Effort and Earmarking requirements during state fiscal year 2022. However, we noted the following control weaknesses in the department?s calculations and demonstration of their compliance with the requirements: ? The department is required to expend 10% of the federal award for early serious mental illness and a first episode psychosis treatment services under the Mental Health Block Grant. The 10% set aside is calculated and budgeted when federal awards are granted. However, tracking of expenditures is not performed to ensure compliance is achieved. ? The department is required to maintain state expenditures for community mental health services and authorized substance abuse activities at a level not less than the average expenditures of the prior two state fiscal years. The department is also required to ensure expenditures for systems of integrated services for children with serious emotional disturbance and substance abuse treatment for pregnant women and women with dependent children is not less than the amount expended for these services in fiscal year 1994. The applicable expenditures were not consistently or accurately calculated by the department in each of the state fiscal years included in the Maintenance of Effort determinations. Additionally, no written procedures exist for the calculations. The department is at risk of noncompliance without controls in place to help ensure expenditures are tracked and calculations are consistently applied across fiscal years. We recommend department management implement controls to ensure applicable expenditures are adequately tracked and calculations applicable to the maintenance of effort requirements are consistently performed across fiscal years. We further recommend department management work with the federal awarding agency to submit corrected maintenance of effort totals to ensure appropriateness of future maintenance of effort determinations.
2022-045 Oregon Health Authority Submit required FFATA reports Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.268 Immunization Cooperative Agreements; 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases; 93.958 Block Grants for Community Mental Health Services; 93.959 Block Grants for Prevention and Treatment of Substance Abuse Federal Award Numbers and Years: 93.268: 5 NH23IP922626; 6 NH23IP922626; 93.323: 6 NU50CK000541; 93.958: 1B09SM083823, 2021; 93.959: 6B08TI083472, 2021; 6B08TI084667, 2022 Compliance Requirement: Reporting Type of Finding: Significant Deficiency; Noncompliance Prior Year Finding: N/A Questioned Costs: N/A Criteria: 2 CFR 170 Appendix A; 2 CFR 200.303 Federal regulations require recipients of federal awards to report certain subaward information in the FFATA Subaward Reporting System (FSRS) for subawards meeting the criteria for reporting. Reports must be submitted no later than the end of the month following the month in which the subawards were made. Federal regulations also require recipients of federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. We identified and reviewed the reporting status of all the department?s subawards subject to FFATA reporting during the audit period. We determined: ? Five of 30 Mental Health Block Grant (MHBG) subawards were not reported, totaling $4.2 million in obligations. ? 12 of 65 Substance Abuse Block Grant (SABG) subawards were not reported, totaling $6.2 million in obligations. ? Four of 37 Epidemiology and Laboratory Capacity (ELC) subawards were not reported, totaling almost $55.5 million in obligations. ? Five of 39 Immunization Cooperative Agreements subawards were not reported, totaling $6.3 million in obligations. Of the total not reported, one SABG, one ELC, and two Immunization subawards were not reported in the FSRS due to oversights in the department?s reporting process. The remaining unreported subawards resulted from the department?s suspension of FFATA reporting stemming from the federal replacement of the DUNS number with the Unique Entity Identifier (UEI) in May 2022. The department did not have UEI numbers for all subrecipients at the time of the replacement which prevented the department from submitting accurate reports. FFATA reporting was suspended through the end of state fiscal year 2022 and into the following state fiscal year. Although the department suspended FFATA reporting in the FSRS, a tracking spreadsheet was maintained that included all subaward award information needed for reporting once reporting is resumed. We recommend department management resume FFATA reporting as soon as feasible and ensure all necessary subawards are reported. We further recommend department management implement controls to ensure all subawards are appropriately tracked and reported.
2022-041 Oregon Health Authority Ensure expenditures of federal funds are recorded to the appropriate program Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.958 Block Grants for Community Mental Health Services (COVID-19), 93.959 Block Grants for Prevention and Treatment of Substance Abuse (COVID-19) Federal Award Numbers and Years: 93.958: 1B09SM083994, 1B09SM085378 (COVID-19); 93.959: 1B08TI083513, 1B08TI083963 (COVID-19) Compliance Requirement: Activities Allowed or Unallowed Type of Finding: Material Weakness; Material Noncompliance Prior Year Finding: N/A Questioned Costs: 93.958 - $2,268,421 (known COVID-19) Criteria: 2 CFR 200.303; 42 USC 300x-1 The department was required to submit a spending plan documenting the intended use of the awarded COVID-19 funding allocations under the Mental Health Block Grant (MHBG) and Substance Abuse Block Grant (SABG). The expenditure of COVID-19 funding should align with each block grant?s approved spending plan. Federal regulations also require recipients of federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal statutes, regulations, and terms and conditions of the Federal award. Our testing of state fiscal year 2022 MHBG COVID-19 expenditures identified $10.4 million in workforce development incentive payments inappropriately recorded under the MHBG. Further inquiry into the payments revealed the department determined during state fiscal year 2023 these expenditures were not included in the MHBG COVID-19 spending plans and were not allowable activities under the MHBG. The department determined incentive payments totaling $8.1 million in COVID-19 expenditures should have been recorded under the SABG in accordance with the SABG COVID-19 spending plans. The department subsequently moved the $8.1 million of the combined $10.4 million total COVID-19 incentive payment expenditures to the SABG; however, the remaining $2.3 million in incentive payment expenditures were left in the MHBG as a funding source had yet to be determined. An adjustment to the Schedule of Expenditures of Federal Awards (SEFA) was required to move the $8.1 million in COVID-19 spending from the MHBG to SABG. The remaining $2.3 million is considered questioned costs under the MHBG. We recommend department management ensure controls are properly designed and implemented to record only allowable expenditures to the appropriate federal programs.
2022-044 Oregon Health Authority Implement a consistent methodology for calculation of maintenance of effort Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.958 Block Grants for Community Mental Health Services; 93.959 Block Grants for Prevention and Treatment of Substance Abuse Federal Award Numbers and Years: 93.958: 1B09SM082625, 2020; 1B09SM083823, 2021; 1B09SM086032, 2022; 93.959: 1B08TI083068, 2020; 6B08TI083472, 2021; 6B08TI084667, 2022 Compliance Requirement: Matching, Level of Effort, Earmarking Type of Finding: Material Weakness Prior Year Finding: N/A Questioned Costs: N/A Criteria: 42 USC 300x-2(a)(1)(C); 42 USC 300x-4(b)(1); 42 USC 300x-9(c)(1); 42 USC 300x-22(b)(1)(C); 42 USC 300x-30(a); 2 CFR 200.303 The Mental Health Block Grant and Substance Abuse Block Grant are subject to various Maintenance of Effort and Earmarking requirements. These requirements ensure the department meets minimum expenditure thresholds. Federal regulations require recipients of federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Based on auditor recalculations, we determined the department was in compliance with the applicable Maintenance of Effort and Earmarking requirements during state fiscal year 2022. However, we noted the following control weaknesses in the department?s calculations and demonstration of their compliance with the requirements: ? The department is required to expend 10% of the federal award for early serious mental illness and a first episode psychosis treatment services under the Mental Health Block Grant. The 10% set aside is calculated and budgeted when federal awards are granted. However, tracking of expenditures is not performed to ensure compliance is achieved. ? The department is required to maintain state expenditures for community mental health services and authorized substance abuse activities at a level not less than the average expenditures of the prior two state fiscal years. The department is also required to ensure expenditures for systems of integrated services for children with serious emotional disturbance and substance abuse treatment for pregnant women and women with dependent children is not less than the amount expended for these services in fiscal year 1994. The applicable expenditures were not consistently or accurately calculated by the department in each of the state fiscal years included in the Maintenance of Effort determinations. Additionally, no written procedures exist for the calculations. The department is at risk of noncompliance without controls in place to help ensure expenditures are tracked and calculations are consistently applied across fiscal years. We recommend department management implement controls to ensure applicable expenditures are adequately tracked and calculations applicable to the maintenance of effort requirements are consistently performed across fiscal years. We further recommend department management work with the federal awarding agency to submit corrected maintenance of effort totals to ensure appropriateness of future maintenance of effort determinations.
2022-045 Oregon Health Authority Submit required FFATA reports Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.268 Immunization Cooperative Agreements; 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases; 93.958 Block Grants for Community Mental Health Services; 93.959 Block Grants for Prevention and Treatment of Substance Abuse Federal Award Numbers and Years: 93.268: 5 NH23IP922626; 6 NH23IP922626; 93.323: 6 NU50CK000541; 93.958: 1B09SM083823, 2021; 93.959: 6B08TI083472, 2021; 6B08TI084667, 2022 Compliance Requirement: Reporting Type of Finding: Significant Deficiency; Noncompliance Prior Year Finding: N/A Questioned Costs: N/A Criteria: 2 CFR 170 Appendix A; 2 CFR 200.303 Federal regulations require recipients of federal awards to report certain subaward information in the FFATA Subaward Reporting System (FSRS) for subawards meeting the criteria for reporting. Reports must be submitted no later than the end of the month following the month in which the subawards were made. Federal regulations also require recipients of federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. We identified and reviewed the reporting status of all the department?s subawards subject to FFATA reporting during the audit period. We determined: ? Five of 30 Mental Health Block Grant (MHBG) subawards were not reported, totaling $4.2 million in obligations. ? 12 of 65 Substance Abuse Block Grant (SABG) subawards were not reported, totaling $6.2 million in obligations. ? Four of 37 Epidemiology and Laboratory Capacity (ELC) subawards were not reported, totaling almost $55.5 million in obligations. ? Five of 39 Immunization Cooperative Agreements subawards were not reported, totaling $6.3 million in obligations. Of the total not reported, one SABG, one ELC, and two Immunization subawards were not reported in the FSRS due to oversights in the department?s reporting process. The remaining unreported subawards resulted from the department?s suspension of FFATA reporting stemming from the federal replacement of the DUNS number with the Unique Entity Identifier (UEI) in May 2022. The department did not have UEI numbers for all subrecipients at the time of the replacement which prevented the department from submitting accurate reports. FFATA reporting was suspended through the end of state fiscal year 2022 and into the following state fiscal year. Although the department suspended FFATA reporting in the FSRS, a tracking spreadsheet was maintained that included all subaward award information needed for reporting once reporting is resumed. We recommend department management resume FFATA reporting as soon as feasible and ensure all necessary subawards are reported. We further recommend department management implement controls to ensure all subawards are appropriately tracked and reported.
2022-044 Oregon Health Authority Implement a consistent methodology for calculation of maintenance of effort Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.958 Block Grants for Community Mental Health Services; 93.959 Block Grants for Prevention and Treatment of Substance Abuse Federal Award Numbers and Years: 93.958: 1B09SM082625, 2020; 1B09SM083823, 2021; 1B09SM086032, 2022; 93.959: 1B08TI083068, 2020; 6B08TI083472, 2021; 6B08TI084667, 2022 Compliance Requirement: Matching, Level of Effort, Earmarking Type of Finding: Material Weakness Prior Year Finding: N/A Questioned Costs: N/A Criteria: 42 USC 300x-2(a)(1)(C); 42 USC 300x-4(b)(1); 42 USC 300x-9(c)(1); 42 USC 300x-22(b)(1)(C); 42 USC 300x-30(a); 2 CFR 200.303 The Mental Health Block Grant and Substance Abuse Block Grant are subject to various Maintenance of Effort and Earmarking requirements. These requirements ensure the department meets minimum expenditure thresholds. Federal regulations require recipients of federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Based on auditor recalculations, we determined the department was in compliance with the applicable Maintenance of Effort and Earmarking requirements during state fiscal year 2022. However, we noted the following control weaknesses in the department?s calculations and demonstration of their compliance with the requirements: ? The department is required to expend 10% of the federal award for early serious mental illness and a first episode psychosis treatment services under the Mental Health Block Grant. The 10% set aside is calculated and budgeted when federal awards are granted. However, tracking of expenditures is not performed to ensure compliance is achieved. ? The department is required to maintain state expenditures for community mental health services and authorized substance abuse activities at a level not less than the average expenditures of the prior two state fiscal years. The department is also required to ensure expenditures for systems of integrated services for children with serious emotional disturbance and substance abuse treatment for pregnant women and women with dependent children is not less than the amount expended for these services in fiscal year 1994. The applicable expenditures were not consistently or accurately calculated by the department in each of the state fiscal years included in the Maintenance of Effort determinations. Additionally, no written procedures exist for the calculations. The department is at risk of noncompliance without controls in place to help ensure expenditures are tracked and calculations are consistently applied across fiscal years. We recommend department management implement controls to ensure applicable expenditures are adequately tracked and calculations applicable to the maintenance of effort requirements are consistently performed across fiscal years. We further recommend department management work with the federal awarding agency to submit corrected maintenance of effort totals to ensure appropriateness of future maintenance of effort determinations.
2022-045 Oregon Health Authority Submit required FFATA reports Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.268 Immunization Cooperative Agreements; 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases; 93.958 Block Grants for Community Mental Health Services; 93.959 Block Grants for Prevention and Treatment of Substance Abuse Federal Award Numbers and Years: 93.268: 5 NH23IP922626; 6 NH23IP922626; 93.323: 6 NU50CK000541; 93.958: 1B09SM083823, 2021; 93.959: 6B08TI083472, 2021; 6B08TI084667, 2022 Compliance Requirement: Reporting Type of Finding: Significant Deficiency; Noncompliance Prior Year Finding: N/A Questioned Costs: N/A Criteria: 2 CFR 170 Appendix A; 2 CFR 200.303 Federal regulations require recipients of federal awards to report certain subaward information in the FFATA Subaward Reporting System (FSRS) for subawards meeting the criteria for reporting. Reports must be submitted no later than the end of the month following the month in which the subawards were made. Federal regulations also require recipients of federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. We identified and reviewed the reporting status of all the department?s subawards subject to FFATA reporting during the audit period. We determined: ? Five of 30 Mental Health Block Grant (MHBG) subawards were not reported, totaling $4.2 million in obligations. ? 12 of 65 Substance Abuse Block Grant (SABG) subawards were not reported, totaling $6.2 million in obligations. ? Four of 37 Epidemiology and Laboratory Capacity (ELC) subawards were not reported, totaling almost $55.5 million in obligations. ? Five of 39 Immunization Cooperative Agreements subawards were not reported, totaling $6.3 million in obligations. Of the total not reported, one SABG, one ELC, and two Immunization subawards were not reported in the FSRS due to oversights in the department?s reporting process. The remaining unreported subawards resulted from the department?s suspension of FFATA reporting stemming from the federal replacement of the DUNS number with the Unique Entity Identifier (UEI) in May 2022. The department did not have UEI numbers for all subrecipients at the time of the replacement which prevented the department from submitting accurate reports. FFATA reporting was suspended through the end of state fiscal year 2022 and into the following state fiscal year. Although the department suspended FFATA reporting in the FSRS, a tracking spreadsheet was maintained that included all subaward award information needed for reporting once reporting is resumed. We recommend department management resume FFATA reporting as soon as feasible and ensure all necessary subawards are reported. We further recommend department management implement controls to ensure all subawards are appropriately tracked and reported.
Level of Effort - Maintenance of effort- Significant Deficiency in Internal Control over Compliance Title I Grants to Local Educational Agencies AL#84.010A Passed through Texas Education Agency 21610101108908 22610101108908 Criteria: Per Texas Education Agency(TEA)guidance on ESEA Section 8521, when the district (LEA) is awarded ESSA Funds, LEA's are required to comply with Level of Effort - Maintenance of Effort(MOE) on which the District must maintain a minimum of 90%of its expenditures for public education from state and local funds from one year to the next. Per 2cfr 200.303, non-federal entities should establish and maintain effective internal control over compliance, such as monitoring expenditures on the state and local funds throughout the year. Condition: Preliminary calculation of the MOE compliance using 2021-2022 fiscal year data to be finalized subsequent to year end, shows that the LEA will not pass four compliance tests to comply with MOE. Cause: District continued to have a decrease in student enrollment and had a significant number of staff change of funding source. District also received alternative sources of revenues that made the district expend more with those other grants causing the noncompliance in MOE. Effect: Per section 8521(b)(1), ESEA, If the LEA fails to meet MOE compliance requirements and if the LEA failed to meet the MOE requirement in one or more of the five immediately preceding fiscal years, the District could receive notification form TEA indicating that a reduction of the amount of funds allocated under ESEA-covered programs in exact proportion to the LEA'S failure to meet the requirements would occur. No noncompliance in MOE has been noted in the five years preceding the fiscal year. Actual effect of noncompliance will be dependent on the District's MOE compliance in the subsequent years. Perspective: Previous five-year annual Moe reports and the report available as of the date of testing based on 2020-2021 fiscal year data shows the District has been and is in compliance with MOE requirements. However, preliminary calculations using 2021-2022 fiscal year data show the District will not comply with MOE requirements when final report become available. Questioned Costs: $0 Auditors' Recommendation: CRI recommends monitoring of enrollment projections and coordinating meetings with human resources and payroll departments to identify timely impact when staff funding changes occur. CRI also recommends quarterly reviews of actual expenditures compared to budget to ensure that MOE tests will be met by the year-end. Management Reponse: Management agrees with the finding. See corrective action plan on page 181.
Level of Effort - Maintenance of effort- Significant Deficiency in Internal Control over Compliance Title I Grants to Local Educational Agencies AL#84.010A Passed through Texas Education Agency 21610101108908 22610101108908 Criteria: Per Texas Education Agency(TEA)guidance on ESEA Section 8521, when the district (LEA) is awarded ESSA Funds, LEA's are required to comply with Level of Effort - Maintenance of Effort(MOE) on which the District must maintain a minimum of 90%of its expenditures for public education from state and local funds from one year to the next. Per 2cfr 200.303, non-federal entities should establish and maintain effective internal control over compliance, such as monitoring expenditures on the state and local funds throughout the year. Condition: Preliminary calculation of the MOE compliance using 2021-2022 fiscal year data to be finalized subsequent to year end, shows that the LEA will not pass four compliance tests to comply with MOE. Cause: District continued to have a decrease in student enrollment and had a significant number of staff change of funding source. District also received alternative sources of revenues that made the district expend more with those other grants causing the noncompliance in MOE. Effect: Per section 8521(b)(1), ESEA, If the LEA fails to meet MOE compliance requirements and if the LEA failed to meet the MOE requirement in one or more of the five immediately preceding fiscal years, the District could receive notification form TEA indicating that a reduction of the amount of funds allocated under ESEA-covered programs in exact proportion to the LEA'S failure to meet the requirements would occur. No noncompliance in MOE has been noted in the five years preceding the fiscal year. Actual effect of noncompliance will be dependent on the District's MOE compliance in the subsequent years. Perspective: Previous five-year annual Moe reports and the report available as of the date of testing based on 2020-2021 fiscal year data shows the District has been and is in compliance with MOE requirements. However, preliminary calculations using 2021-2022 fiscal year data show the District will not comply with MOE requirements when final report become available. Questioned Costs: $0 Auditors' Recommendation: CRI recommends monitoring of enrollment projections and coordinating meetings with human resources and payroll departments to identify timely impact when staff funding changes occur. CRI also recommends quarterly reviews of actual expenditures compared to budget to ensure that MOE tests will be met by the year-end. Management Reponse: Management agrees with the finding. See corrective action plan on page 181.
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 accurate information was presented in order to be in 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 effective reviews could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by the review process not ensuring there was accurate reporting of the activities of the programs. Questioned Costs: There were $619 of known questioned costs identified. The known questioned costs were calculated taking the number of meals overclaimed times the IDOE reimbursement rate for lunch for the month in which the error was noted. The net overclaimed reimbursement amount was $619. Context: We noted that for one claim in a sample of four, the school lunch meal count was overclaimed for the month. We noted that in October 2020 the School Corporation had overclaimed lunches by 173 meals. We noted that the sponsor claim reimbursement form had been reviewed, however, the lack of an effective review allowed the error to go unnoticed. 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.