Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.
Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.
Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.
Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.
Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.
Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.
2022 ? 004: Reporting Federal Agency: Department of Education Federal Program Title: COVID-19 HEERF Student Aid Portion AND COVID-19 HEERF Institutional Portion Assistance Listing Number: 84.425E and 84.425F Federal Award Identification Number and Year: P425E201204 and P425F201455 Award Period: July 1, 2021, through June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance Other Matters Criteria or specific requirement: Per Uniform Guidance 2 CFR 200.303, non-Federal entities receiving Federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. The initial reporting for this grant requires the report to be submitted to the Institution?s website within 30 days of the signed Certification Agreement or 30 days after the electronic announcement dated May 6, whichever is later. Institutions were then required to update their websites every 45 days after initial upload. This was changed to quarterly on August 31, 2020. Condition: During our testing of the reporting process, we noted that documentation to support some of the amounts reported for student reports was not retained. Additionally, it was noted there was no documentation of the review/approval process during the first three quarters, and that no support of when the reports were submitted to the website or Emergency Student Funds were retained, preventing us from testing if they were submitted timely. Questioned costs: None Context: A robust tracking system was not employed for all the various reporting requirements including documentation of review and maintenance of records or recorded numbers. Cause: Summit Academy OIC did not have a robust system in place to document and track reporting requirements. Effect: No evidence to support that the reports were completed on time. Repeat finding: Yes ? 2021-001 Recommendation: We recommend the Organization establish a system to track due dates of reports to ensure timely submission and retain documents to support the submission and accuracy of the reports. Views of responsible officials: There is no disagreement with the audit finding.
2022 ? 004: Reporting Federal Agency: Department of Education Federal Program Title: COVID-19 HEERF Student Aid Portion AND COVID-19 HEERF Institutional Portion Assistance Listing Number: 84.425E and 84.425F Federal Award Identification Number and Year: P425E201204 and P425F201455 Award Period: July 1, 2021, through June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance Other Matters Criteria or specific requirement: Per Uniform Guidance 2 CFR 200.303, non-Federal entities receiving Federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. The initial reporting for this grant requires the report to be submitted to the Institution?s website within 30 days of the signed Certification Agreement or 30 days after the electronic announcement dated May 6, whichever is later. Institutions were then required to update their websites every 45 days after initial upload. This was changed to quarterly on August 31, 2020. Condition: During our testing of the reporting process, we noted that documentation to support some of the amounts reported for student reports was not retained. Additionally, it was noted there was no documentation of the review/approval process during the first three quarters, and that no support of when the reports were submitted to the website or Emergency Student Funds were retained, preventing us from testing if they were submitted timely. Questioned costs: None Context: A robust tracking system was not employed for all the various reporting requirements including documentation of review and maintenance of records or recorded numbers. Cause: Summit Academy OIC did not have a robust system in place to document and track reporting requirements. Effect: No evidence to support that the reports were completed on time. Repeat finding: Yes ? 2021-001 Recommendation: We recommend the Organization establish a system to track due dates of reports to ensure timely submission and retain documents to support the submission and accuracy of the reports. Views of responsible officials: There is no disagreement with the audit finding.
2022-002 Department of Health and Human Services Federal Financial Assistance Listing #93.461 COVID-19 HRSA Claims Reimbursement for the Uninsured Program and the COVID-19 Coverage Assistance Fund Activities Allowed or Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR 200.303 (a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: Our testing identified one instance in which health services provided to a patient were reimbursed under the federal program, and the health services provided did not meet the terms and conditions of the federal program. Cause: Through the coding process, an incorrect Dx Code was included in the system, and therefore, the patient?s health services flowed into Monument Health?s Uninsured Program workflow which resulted in $3,563 of health services being reimbursed under the federal program. Effect: Funds were received under the federal program for health services provided which did not meet the terms and conditions of the federal program. Questioned Costs: None reported. Context: A non-statistical sample of 60 patients were selected for testing, which accounted for $1,659,497 of $4,344,728 of monies received from the federal agency. Repeat Finding from Prior Years: No Recommendation: We recommend management review health services provided to patients to ensure the health services provided are allowable to be reimbursed under the terms and conditions of the federal program. Views of Responsible Officials: Management agrees with the finding.
Finding No. 2022-001 Education Stabilization Fund: U.S. Department of Education: COVID-19 ? Higher Education Emergency Relief Fund ? Student Aid Portion, Assistance Listing 84.425E (award number P425E201772) COVID-19 ? Higher Education Emergency Relief Fund ? Institutional Aid Portion, Assistance Listing 84.425F (award number P425F204328) Statistically valid sample: No and it was not intended to be. Repeat finding: This is a repeat finding from the prior year single audit report (finding no. 2021-001). Compliance Requirement ? Reporting ? Significant Deficiency and Noncompliance Criteria Quarterly Public Reporting for (a)(1) Institutional Portion, (a)(2), and (a)(3) funds (Assistance Listings 84.425F, 84.425J, 84.425K, 84.425L, 84.425M, 84.425N, 84.425S, 84.425T as applicable) The CARES, CRRSAA, and ARP institutional quarterly portion reporting requirements involve publicly posting completed forms on the institution?s website. The forms must be conspicuously posted on the institution?s primary website on the same page the reports of the IHE?s activities as to the emergency financial aid grants to students (Student Aid Portion) are posted. Auditors should determine if an institution was both timely and accurate in publicly posting its Quarterly Reporting Form from October 30, 2020, onward and sample these quarterly public reports and reconcile the publicly reported amounts with underlying documentation to ensure accuracy. ED understands that this information may be unique and challenging to audit, particularly because auditors are asked to verify information posted on a webpage which may not be accessible during audit fieldwork. For these public reporting requirements, auditors may accept as evidence of compliance, contemporarily produced emails, webmaster logs, or other relevant documentation establishing a good-faith indication that the institution posted the required information at approximately the timelines established by the public reporting requirements (HEERF Grant Program Auditing Requirements, General Requirements and Information ? All HEERF Grantees). Quarterly Public Reporting for (a)(1) Student Aid Portion (Assistance Listings 84.425E) For CARES, beginning on May 6, 2020, ED required institutions that received a HEERF I Section 18004(a)(1) Student Aid Portion award to publicly post certain information on their website no later than 30 days after award, and update that information every 45 days thereafter (by posting a new report). This was announced through an electronic announcement (EA). On August 31, 2020, ED revised the EA by decreasing the frequency of reporting after the initial 30-day period from every 45 days thereafter to every calendar quarter. Grantees posting a 45-day report on or after August 31, 2020, should instead post a report every calendar quarter, with the first calendar quarter report due by October 10, 2020, and covering the period from after their last 45-day or 30-day report through the end of the calendar quarter on September 30, 2020. On May 13, 2021, ED published an additional notice for student aid public reporting under CRRSAA and ARP, which requires that institutions publicly post certain information on their website. Institutions must publicly post their report as soon as possible, but no later than 30 days after the publication of the notice or 30 days after the date ED first obligated funds under HEERF I, II, or III to the institution for Emergency Financial Aid Grants to Students, whichever comes later. The report must be updated no later than 10 days after the end of each calendar quarter (September 30, and December 31, March 31, June 30). Key Line Items ? The following are identified as critical information for the Quarterly Public Reporting for Student Aid Portion: 1. Item #3: The total amount of Emergency Financial Aid Grants distributed to students under the CARES (a)(1) subprogram and the CRRSAA and ARP (a)(1) subprograms as of the date of submission (i.e., as of the initial report and every calendar quarter thereafter). 2. Item #4: The estimated total number of students at the institution that are eligible to receive Emergency Financial Aid Grants to Students under the CARES (a)(1) subprogram and the CRRSAA and ARP (a)(1) subprograms. 3. Item #5: The total number of students who have received an Emergency Financial Aid Grant to students under the CARES (a)(1) subprogram and the CRRSAA and ARP (a)(1) subprograms. 4. Item #6: The method(s) used by the institution to determine which students receive Emergency Financial Aid Grants and how much they would receive under the CARES (a)(1) subprogram and the CRRSAA and ARP (a)(1) subprograms. Further, the non-Federal entity must establish and maintain an effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award (2 CFR 200.303). Condition and Context During the year ended June 30, 2022, the University submitted 3 reports for Higher Education Emergency Relief Fund (HEERF) III related to the Institutional Aid Portion and 3 reports for the Student Aid Portion. The Manager of Financial Planning, Budgeting & Analysis and Assistant Vice President for Financial Aid and Undergraduate Admissions prepared each Institutional Aid and Student Aid report, respectively, utilizing the disbursement detail as well as other available support from the University?s information systems. The reports were then shared with management, who reviewed them and approved them via email, which was retained to show management?s authorization to post the reports. For the Institutional Aid report posted for the quarter ended December 31, 2021, the University inaccurately included lost revenue associated with fiscal year 2021, which would not have been allowable under the HEERF requirements. While the University was able to provide contractual services that were incurred in fiscal year 2022 to support the amounts expended, the report was not accurately prepared since ultimately the funds were not used to cover lost revenue. In addition, for the Student Aid report for the quarter ended December 31, 2021, we noted that the University did not include the method used to determine which students received a grant and the amount of such grant (key line item #6). Cause Management?s review is not at the precision level necessary to ensure that the Institutional Aid report was accurately prepared or that the key line items related to the Student Aid report are included in the report. Effect The University may submit reports that are incomplete or inaccurate. Questioned Costs There were no questioned costs identified as the University had eligible contractual service costs incurred (Institutional Aid report) and the key line item identified as missing does not have a monetary impact on the program (Student Aid report). Recommendation The University should strengthen its policies and practices to ensure that management?s review is precise enough to ensure that reports are complete and accurate. Views of Responsible Official Management agrees with the recommendation. The University will ensure that each report submission that is required to support spending under each of the Higher Education Emergency Relief Funds and other related funding programs has formal supporting documentation to evidence appropriate review of the report. This issue of how eligible students were determined and how the amounts distributed were determined was identified on the Q4 2021 Report due to the timing of the test work in the prior year Single Audit. This issue was corrected in the Q1 2022 Report and all available funding has been spent. The Assistant Vice President for Financial Aid has ensured that the total number of students eligible to receive a grant and the total number of students who receive grants is properly reviewed and documented. The Manager of Financial Planning, Budgeting and Analysis will ensure that all submitted Institutional Aid Reports are properly reconciled to actual expenditures rather than anticipated expenditures. The Q4 2021 Report was revised and reposted to reflect that expenditures were related to other costs rather than lost revenue. Each Student Aid Report and Institutional Aid Report will be reviewed and approved by the Associate Vice President for Finance. This review and approval will be documented in the file. The submitted Reports will also be provided to the CFO, Vice President for Finance and Treasurer.
Finding No. 2022-001 Education Stabilization Fund: U.S. Department of Education: COVID-19 ? Higher Education Emergency Relief Fund ? Student Aid Portion, Assistance Listing 84.425E (award number P425E201772) COVID-19 ? Higher Education Emergency Relief Fund ? Institutional Aid Portion, Assistance Listing 84.425F (award number P425F204328) Statistically valid sample: No and it was not intended to be. Repeat finding: This is a repeat finding from the prior year single audit report (finding no. 2021-001). Compliance Requirement ? Reporting ? Significant Deficiency and Noncompliance Criteria Quarterly Public Reporting for (a)(1) Institutional Portion, (a)(2), and (a)(3) funds (Assistance Listings 84.425F, 84.425J, 84.425K, 84.425L, 84.425M, 84.425N, 84.425S, 84.425T as applicable) The CARES, CRRSAA, and ARP institutional quarterly portion reporting requirements involve publicly posting completed forms on the institution?s website. The forms must be conspicuously posted on the institution?s primary website on the same page the reports of the IHE?s activities as to the emergency financial aid grants to students (Student Aid Portion) are posted. Auditors should determine if an institution was both timely and accurate in publicly posting its Quarterly Reporting Form from October 30, 2020, onward and sample these quarterly public reports and reconcile the publicly reported amounts with underlying documentation to ensure accuracy. ED understands that this information may be unique and challenging to audit, particularly because auditors are asked to verify information posted on a webpage which may not be accessible during audit fieldwork. For these public reporting requirements, auditors may accept as evidence of compliance, contemporarily produced emails, webmaster logs, or other relevant documentation establishing a good-faith indication that the institution posted the required information at approximately the timelines established by the public reporting requirements (HEERF Grant Program Auditing Requirements, General Requirements and Information ? All HEERF Grantees). Quarterly Public Reporting for (a)(1) Student Aid Portion (Assistance Listings 84.425E) For CARES, beginning on May 6, 2020, ED required institutions that received a HEERF I Section 18004(a)(1) Student Aid Portion award to publicly post certain information on their website no later than 30 days after award, and update that information every 45 days thereafter (by posting a new report). This was announced through an electronic announcement (EA). On August 31, 2020, ED revised the EA by decreasing the frequency of reporting after the initial 30-day period from every 45 days thereafter to every calendar quarter. Grantees posting a 45-day report on or after August 31, 2020, should instead post a report every calendar quarter, with the first calendar quarter report due by October 10, 2020, and covering the period from after their last 45-day or 30-day report through the end of the calendar quarter on September 30, 2020. On May 13, 2021, ED published an additional notice for student aid public reporting under CRRSAA and ARP, which requires that institutions publicly post certain information on their website. Institutions must publicly post their report as soon as possible, but no later than 30 days after the publication of the notice or 30 days after the date ED first obligated funds under HEERF I, II, or III to the institution for Emergency Financial Aid Grants to Students, whichever comes later. The report must be updated no later than 10 days after the end of each calendar quarter (September 30, and December 31, March 31, June 30). Key Line Items ? The following are identified as critical information for the Quarterly Public Reporting for Student Aid Portion: 1. Item #3: The total amount of Emergency Financial Aid Grants distributed to students under the CARES (a)(1) subprogram and the CRRSAA and ARP (a)(1) subprograms as of the date of submission (i.e., as of the initial report and every calendar quarter thereafter). 2. Item #4: The estimated total number of students at the institution that are eligible to receive Emergency Financial Aid Grants to Students under the CARES (a)(1) subprogram and the CRRSAA and ARP (a)(1) subprograms. 3. Item #5: The total number of students who have received an Emergency Financial Aid Grant to students under the CARES (a)(1) subprogram and the CRRSAA and ARP (a)(1) subprograms. 4. Item #6: The method(s) used by the institution to determine which students receive Emergency Financial Aid Grants and how much they would receive under the CARES (a)(1) subprogram and the CRRSAA and ARP (a)(1) subprograms. Further, the non-Federal entity must establish and maintain an effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award (2 CFR 200.303). Condition and Context During the year ended June 30, 2022, the University submitted 3 reports for Higher Education Emergency Relief Fund (HEERF) III related to the Institutional Aid Portion and 3 reports for the Student Aid Portion. The Manager of Financial Planning, Budgeting & Analysis and Assistant Vice President for Financial Aid and Undergraduate Admissions prepared each Institutional Aid and Student Aid report, respectively, utilizing the disbursement detail as well as other available support from the University?s information systems. The reports were then shared with management, who reviewed them and approved them via email, which was retained to show management?s authorization to post the reports. For the Institutional Aid report posted for the quarter ended December 31, 2021, the University inaccurately included lost revenue associated with fiscal year 2021, which would not have been allowable under the HEERF requirements. While the University was able to provide contractual services that were incurred in fiscal year 2022 to support the amounts expended, the report was not accurately prepared since ultimately the funds were not used to cover lost revenue. In addition, for the Student Aid report for the quarter ended December 31, 2021, we noted that the University did not include the method used to determine which students received a grant and the amount of such grant (key line item #6). Cause Management?s review is not at the precision level necessary to ensure that the Institutional Aid report was accurately prepared or that the key line items related to the Student Aid report are included in the report. Effect The University may submit reports that are incomplete or inaccurate. Questioned Costs There were no questioned costs identified as the University had eligible contractual service costs incurred (Institutional Aid report) and the key line item identified as missing does not have a monetary impact on the program (Student Aid report). Recommendation The University should strengthen its policies and practices to ensure that management?s review is precise enough to ensure that reports are complete and accurate. Views of Responsible Official Management agrees with the recommendation. The University will ensure that each report submission that is required to support spending under each of the Higher Education Emergency Relief Funds and other related funding programs has formal supporting documentation to evidence appropriate review of the report. This issue of how eligible students were determined and how the amounts distributed were determined was identified on the Q4 2021 Report due to the timing of the test work in the prior year Single Audit. This issue was corrected in the Q1 2022 Report and all available funding has been spent. The Assistant Vice President for Financial Aid has ensured that the total number of students eligible to receive a grant and the total number of students who receive grants is properly reviewed and documented. The Manager of Financial Planning, Budgeting and Analysis will ensure that all submitted Institutional Aid Reports are properly reconciled to actual expenditures rather than anticipated expenditures. The Q4 2021 Report was revised and reposted to reflect that expenditures were related to other costs rather than lost revenue. Each Student Aid Report and Institutional Aid Report will be reviewed and approved by the Associate Vice President for Finance. This review and approval will be documented in the file. The submitted Reports will also be provided to the CFO, Vice President for Finance and Treasurer.
Finding No. 2022-002 Education Stabilization Fund: U.S. Department of Education: COVID-19 ? Higher Education Emergency Relief Fund ? Institutional Aid Portion, Assistance Listing 84.425F (award number P425F204328) Statistically valid sample: No and it was not intended to be. Repeat finding: Not a repeat finding. Compliance Requirement ? Procurement ? Significant Deficiency and Noncompliance Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: ? For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). For those procurements supported by HEERF grant funds, auditors should determine if institutions sufficiently documented rationales and determinations in making any sole source awards during the time of national emergency due to the coronavirus. Exceptions from the competitive procurement requirements of the Uniform Guidance may be accepted if institutions have documented that the public exigency or emergency would not permit a delay, in accordance with 2 CFR section 200.320(f)(2). A circumstance that may influence this determination is the length of time between the procurements and the emergency at issue. Specifically, exceptions are more likely to be acceptable the closer the procurement occurred to the March 13, 2020 declaration of the national emergency. Further, the non-Federal entity must establish and maintain an effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award (2 CFR 200.303). Condition and Context The University?s procurement policy for procurements over $10,000 is to either competitively bid it or document the sole source justification for why competitive bidding was not able to be completed. Based on our test work, for two of our seven selections, the University did not properly document its compliance with the procurement policy. For one selection, we noted that the University did not properly retain documentation for the competitive bidding, while for the other selection, the University did not properly document within the vendor?s procurement file that it was sole sourced due to the pandemic and needing the services in an expedited fashion as allowed per the HEERF requirements. Cause The documentation of procurement decisions was not properly retained to support the decisions made during the time period. Effect The University was not in compliance with their procurement policy. Questioned Costs There were no questioned costs identified as the University contracted with the respective parties in both cases and the costs were allowable under the HEERF requirements. Recommendation The University should strengthen its policies and practices to ensure that documentation is retained for all procurement decisions in order to support compliance with their procurement policy. Views of Responsible Official Management agrees with the recommendation. The University will ensure that all procurement decisions comply with the Stevens Procurement Policy and are properly documented, including the procurement method used (e.g., competitive bidding or sole source justification). The Director of Procurement will ensure that all Stevens employees responsible for making purchasing decisions at the University are familiar with the Procurement Policy and the need to ensure full compliance even when making purchasing decisions during emergency situations (e.g., COVID pandemic). The Director of Procurement will ensure compliance with the Stevens Procurement Policy.
Finding No. 2022-003 Research and Development Cluster: U.S. Department of Defense: Improved Ventilation of the Edematous Lung, Assistance Listing 93.838 (award number: 1R01HL113577-01A1) Statistically valid sample: No and it was not intended to be. Repeat finding: This is a repeat finding from the prior year single audit report (finding no. 2021-002). Compliance Requirement ? Equipment and Real Property ? Significant Deficiency and Noncompliance Criteria Per guidance included in 2 CFR part 200.313, non-Federal entities other than States must follow regulations which require that: 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 Federal award identification number), who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Further, the non-Federal entity must establish and maintain an effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award (2 CFR 200.303). Condition and Context Utilizing the listing of equipment additions provided by the Plant Fund manager, the Fixed Asset Specialist schedules a visit with the asset custodian to identify and tag the equipment. This process consists of affixing a barcode asset tag to the equipment. After tagging the equipment, the Fixed Asset Specialist will create an entry in Kuali. This entry will automatically generate a unique asset number in Kuali, for which, the Fixed Asset Specialist will then add all the required data related to that asset, including the tag number. We selected twenty-five pieces of equipment and noted for one selection, the asset?s tag was not included in the Kuali Asset Management System, therefore the property records were not accurate. Cause Management did not properly ensure that the tag number was included within fixed asset management system. Effect The University may not be able to properly identify equipment funded with federal awards to ensure proper inventorying, safeguarding, and maintenance. Questioned Costs There are no questioned costs associated with this finding as the equipment was within the University?s possession. Recommendation The University should strengthen its policies and procedures related to maintaining property records and tagging equipment. Views of Responsible Official Management agrees with the recommendation. The University will ensure that each individual fixed asset is appropriately tagged and that the information for the asset reconciles to the information reported in the Stevens Kuali Financial System. The Division of Finance has instituted an additional procedure to generate monthly asset tagging reports to address this issue and ensure that all assets are tagged in a timely manner. In addition, the Staff Accountant takes a picture of the asset tag for new assets which is attached to the supporting documentation in the Kuali Financial System. The Senior Accountant reviews the documentation for each asset and ensures that the appropriate asset tag is reflected in the Kuali Financial System. The Division of Finance engages an outside firm to conduct a complete physical inventory every two years. The Executive Director of Finance and Controller, the Senior Accountant and the Staff Accountant will ensure that all asset records are properly reflected in the Kuali Financial System.
FINDING 2022-002 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 Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the 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 micropurchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation did not enter into a contract, as required, with the sole vendor that was less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The School Corporation purchased goods and services in the amount of $74,906 and $82,070 during fiscal years 2020-2021 and 2021-2022, respectively, with the vendor. Additionally, the School Corporation did not verify the vendor was neither suspended nor debarred, or otherwise excluded or disqualified from participating in federal assistance programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 16 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(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. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases ? (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 17 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states in part: "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 established a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect The failure to design and implement 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 control to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, 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): FY 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the 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 micropurchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation did not enter into a contract, as required, with the sole vendor that was less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The School Corporation purchased goods and services in the amount of $74,906 and $82,070 during fiscal years 2020-2021 and 2021-2022, respectively, with the vendor. Additionally, the School Corporation did not verify the vendor was neither suspended nor debarred, or otherwise excluded or disqualified from participating in federal assistance programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 16 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(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. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases ? (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 17 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states in part: "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 established a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect The failure to design and implement 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 control to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, 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): FY 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the 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 micropurchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation did not enter into a contract, as required, with the sole vendor that was less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The School Corporation purchased goods and services in the amount of $74,906 and $82,070 during fiscal years 2020-2021 and 2021-2022, respectively, with the vendor. Additionally, the School Corporation did not verify the vendor was neither suspended nor debarred, or otherwise excluded or disqualified from participating in federal assistance programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 16 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(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. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases ? (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 17 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states in part: "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 established a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect The failure to design and implement 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 control to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, 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): FY 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the 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 micropurchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation did not enter into a contract, as required, with the sole vendor that was less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The School Corporation purchased goods and services in the amount of $74,906 and $82,070 during fiscal years 2020-2021 and 2021-2022, respectively, with the vendor. Additionally, the School Corporation did not verify the vendor was neither suspended nor debarred, or otherwise excluded or disqualified from participating in federal assistance programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 16 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(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. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases ? (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 17 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states in part: "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 established a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect The failure to design and implement 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 control to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, 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): FY 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the 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 micropurchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation did not enter into a contract, as required, with the sole vendor that was less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The School Corporation purchased goods and services in the amount of $74,906 and $82,070 during fiscal years 2020-2021 and 2021-2022, respectively, with the vendor. Additionally, the School Corporation did not verify the vendor was neither suspended nor debarred, or otherwise excluded or disqualified from participating in federal assistance programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 16 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(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. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases ? (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 17 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states in part: "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 established a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect The failure to design and implement 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 control to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, 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): FY 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the 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 micropurchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation did not enter into a contract, as required, with the sole vendor that was less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The School Corporation purchased goods and services in the amount of $74,906 and $82,070 during fiscal years 2020-2021 and 2021-2022, respectively, with the vendor. Additionally, the School Corporation did not verify the vendor was neither suspended nor debarred, or otherwise excluded or disqualified from participating in federal assistance programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 16 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(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. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases ? (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 17 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states in part: "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 established a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect The failure to design and implement 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 control to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425D Federal Award Number or Year (or Other Identifying Number): S425D200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 18 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Two of four annual data reports due and submitted during the audit period contained errors. The Elementary and Secondary School Emergency Relief (ESSER) I, Year 1 annual data report overstated total expenditures by $72,046. The ESSER I, Year 2 annual data report overstated total expenditures by $2,303. 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 Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." INDIANA STATE BOARD OF ACCOUNTS 19 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not established a system of internal controls that would have ensured compliance with the Reporting compliance requirement. The ESSER1, Year 1 report included expenditures past the reporting period. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425D Federal Award Number or Year (or Other Identifying Number): S425D200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 18 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Two of four annual data reports due and submitted during the audit period contained errors. The Elementary and Secondary School Emergency Relief (ESSER) I, Year 1 annual data report overstated total expenditures by $72,046. The ESSER I, Year 2 annual data report overstated total expenditures by $2,303. 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 Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." INDIANA STATE BOARD OF ACCOUNTS 19 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not established a system of internal controls that would have ensured compliance with the Reporting compliance requirement. The ESSER1, Year 1 report included expenditures past the reporting period. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425D Federal Award Number or Year (or Other Identifying Number): S425D200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 18 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Two of four annual data reports due and submitted during the audit period contained errors. The Elementary and Secondary School Emergency Relief (ESSER) I, Year 1 annual data report overstated total expenditures by $72,046. The ESSER I, Year 2 annual data report overstated total expenditures by $2,303. 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 Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." INDIANA STATE BOARD OF ACCOUNTS 19 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not established a system of internal controls that would have ensured compliance with the Reporting compliance requirement. The ESSER1, Year 1 report included expenditures past the reporting period. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2022 ? 002 ? Child Nutrition Cluster Program Income Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: FY 2020-2021, FY 2021-2022 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Other Matters. Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.307 states in part: ?Ordinarily program income must be deducted from total allowable costs to determine the net allowable costs. Program income must be used for current costs unless the Federal awarding agency authorizes otherwise. Program income that the non-Federal entity did not anticipate at the time of the Federal award must be used to reduce the Federal award and non-Federal entity contributions rather than to increase the funds committed to the project.? Condition: During our testing, we noted the Crawfordsville Community School Corporation did not have adequate internal controls designed to ensure that program income requirements were being met. Questioned costs: Known - $620.87, Likely - $6,269.37. Known and questioned costs less than program materiality. Context: Using a statistically valid sample, CLA identified noncompliance in 2 of 60 samples tested. These related to 1) "extra money" for which support was unable to be provided to identify the source to verify it is an appropriate source of program income, and 2) a manual calculation error in the recording of one week's program income. Both of these may have been caught through an effective internal control structure, however there was no evidence for any of the selections that an appropriate control structure was in place and operating to ensure program income was properly determined and recorded. Cause: Management had not previously developed a system of internal controls that would ensure compliance with the program income compliance requirement. This was identified in the prior audit, but due to the timing of the prior audit recommendations, changes to implement an effective internal control structure did not occur until late 2022.. Effect: The Crawfordsville Community School Corporation is not in compliance with program requirements over program income. The failure to establish an effective internal control system may enable noncompliance with the grant agreement and the federal program income compliance requirement. Noncompliance may go undetected. Repeat Finding: No. Recommendation: We recommend the Crawfordsville Community School Corporation establish a system of internal control to ensure compliance. Training over proper internal control development and implementation may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 002 ? Child Nutrition Cluster Program Income Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: FY 2020-2021, FY 2021-2022 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Other Matters. Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.307 states in part: ?Ordinarily program income must be deducted from total allowable costs to determine the net allowable costs. Program income must be used for current costs unless the Federal awarding agency authorizes otherwise. Program income that the non-Federal entity did not anticipate at the time of the Federal award must be used to reduce the Federal award and non-Federal entity contributions rather than to increase the funds committed to the project.? Condition: During our testing, we noted the Crawfordsville Community School Corporation did not have adequate internal controls designed to ensure that program income requirements were being met. Questioned costs: Known - $620.87, Likely - $6,269.37. Known and questioned costs less than program materiality. Context: Using a statistically valid sample, CLA identified noncompliance in 2 of 60 samples tested. These related to 1) "extra money" for which support was unable to be provided to identify the source to verify it is an appropriate source of program income, and 2) a manual calculation error in the recording of one week's program income. Both of these may have been caught through an effective internal control structure, however there was no evidence for any of the selections that an appropriate control structure was in place and operating to ensure program income was properly determined and recorded. Cause: Management had not previously developed a system of internal controls that would ensure compliance with the program income compliance requirement. This was identified in the prior audit, but due to the timing of the prior audit recommendations, changes to implement an effective internal control structure did not occur until late 2022.. Effect: The Crawfordsville Community School Corporation is not in compliance with program requirements over program income. The failure to establish an effective internal control system may enable noncompliance with the grant agreement and the federal program income compliance requirement. Noncompliance may go undetected. Repeat Finding: No. Recommendation: We recommend the Crawfordsville Community School Corporation establish a system of internal control to ensure compliance. Training over proper internal control development and implementation may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 002 ? Child Nutrition Cluster Program Income Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: FY 2020-2021, FY 2021-2022 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Other Matters. Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.307 states in part: ?Ordinarily program income must be deducted from total allowable costs to determine the net allowable costs. Program income must be used for current costs unless the Federal awarding agency authorizes otherwise. Program income that the non-Federal entity did not anticipate at the time of the Federal award must be used to reduce the Federal award and non-Federal entity contributions rather than to increase the funds committed to the project.? Condition: During our testing, we noted the Crawfordsville Community School Corporation did not have adequate internal controls designed to ensure that program income requirements were being met. Questioned costs: Known - $620.87, Likely - $6,269.37. Known and questioned costs less than program materiality. Context: Using a statistically valid sample, CLA identified noncompliance in 2 of 60 samples tested. These related to 1) "extra money" for which support was unable to be provided to identify the source to verify it is an appropriate source of program income, and 2) a manual calculation error in the recording of one week's program income. Both of these may have been caught through an effective internal control structure, however there was no evidence for any of the selections that an appropriate control structure was in place and operating to ensure program income was properly determined and recorded. Cause: Management had not previously developed a system of internal controls that would ensure compliance with the program income compliance requirement. This was identified in the prior audit, but due to the timing of the prior audit recommendations, changes to implement an effective internal control structure did not occur until late 2022.. Effect: The Crawfordsville Community School Corporation is not in compliance with program requirements over program income. The failure to establish an effective internal control system may enable noncompliance with the grant agreement and the federal program income compliance requirement. Noncompliance may go undetected. Repeat Finding: No. Recommendation: We recommend the Crawfordsville Community School Corporation establish a system of internal control to ensure compliance. Training over proper internal control development and implementation may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 002 ? Child Nutrition Cluster Program Income Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: FY 2020-2021, FY 2021-2022 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Other Matters. Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.307 states in part: ?Ordinarily program income must be deducted from total allowable costs to determine the net allowable costs. Program income must be used for current costs unless the Federal awarding agency authorizes otherwise. Program income that the non-Federal entity did not anticipate at the time of the Federal award must be used to reduce the Federal award and non-Federal entity contributions rather than to increase the funds committed to the project.? Condition: During our testing, we noted the Crawfordsville Community School Corporation did not have adequate internal controls designed to ensure that program income requirements were being met. Questioned costs: Known - $620.87, Likely - $6,269.37. Known and questioned costs less than program materiality. Context: Using a statistically valid sample, CLA identified noncompliance in 2 of 60 samples tested. These related to 1) "extra money" for which support was unable to be provided to identify the source to verify it is an appropriate source of program income, and 2) a manual calculation error in the recording of one week's program income. Both of these may have been caught through an effective internal control structure, however there was no evidence for any of the selections that an appropriate control structure was in place and operating to ensure program income was properly determined and recorded. Cause: Management had not previously developed a system of internal controls that would ensure compliance with the program income compliance requirement. This was identified in the prior audit, but due to the timing of the prior audit recommendations, changes to implement an effective internal control structure did not occur until late 2022.. Effect: The Crawfordsville Community School Corporation is not in compliance with program requirements over program income. The failure to establish an effective internal control system may enable noncompliance with the grant agreement and the federal program income compliance requirement. Noncompliance may go undetected. Repeat Finding: No. Recommendation: We recommend the Crawfordsville Community School Corporation establish a system of internal control to ensure compliance. Training over proper internal control development and implementation may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 002 ? Child Nutrition Cluster Program Income Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: FY 2020-2021, FY 2021-2022 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Other Matters. Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.307 states in part: ?Ordinarily program income must be deducted from total allowable costs to determine the net allowable costs. Program income must be used for current costs unless the Federal awarding agency authorizes otherwise. Program income that the non-Federal entity did not anticipate at the time of the Federal award must be used to reduce the Federal award and non-Federal entity contributions rather than to increase the funds committed to the project.? Condition: During our testing, we noted the Crawfordsville Community School Corporation did not have adequate internal controls designed to ensure that program income requirements were being met. Questioned costs: Known - $620.87, Likely - $6,269.37. Known and questioned costs less than program materiality. Context: Using a statistically valid sample, CLA identified noncompliance in 2 of 60 samples tested. These related to 1) "extra money" for which support was unable to be provided to identify the source to verify it is an appropriate source of program income, and 2) a manual calculation error in the recording of one week's program income. Both of these may have been caught through an effective internal control structure, however there was no evidence for any of the selections that an appropriate control structure was in place and operating to ensure program income was properly determined and recorded. Cause: Management had not previously developed a system of internal controls that would ensure compliance with the program income compliance requirement. This was identified in the prior audit, but due to the timing of the prior audit recommendations, changes to implement an effective internal control structure did not occur until late 2022.. Effect: The Crawfordsville Community School Corporation is not in compliance with program requirements over program income. The failure to establish an effective internal control system may enable noncompliance with the grant agreement and the federal program income compliance requirement. Noncompliance may go undetected. Repeat Finding: No. Recommendation: We recommend the Crawfordsville Community School Corporation establish a system of internal control to ensure compliance. Training over proper internal control development and implementation may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 002 ? Child Nutrition Cluster Program Income Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: FY 2020-2021, FY 2021-2022 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Other Matters. Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.307 states in part: ?Ordinarily program income must be deducted from total allowable costs to determine the net allowable costs. Program income must be used for current costs unless the Federal awarding agency authorizes otherwise. Program income that the non-Federal entity did not anticipate at the time of the Federal award must be used to reduce the Federal award and non-Federal entity contributions rather than to increase the funds committed to the project.? Condition: During our testing, we noted the Crawfordsville Community School Corporation did not have adequate internal controls designed to ensure that program income requirements were being met. Questioned costs: Known - $620.87, Likely - $6,269.37. Known and questioned costs less than program materiality. Context: Using a statistically valid sample, CLA identified noncompliance in 2 of 60 samples tested. These related to 1) "extra money" for which support was unable to be provided to identify the source to verify it is an appropriate source of program income, and 2) a manual calculation error in the recording of one week's program income. Both of these may have been caught through an effective internal control structure, however there was no evidence for any of the selections that an appropriate control structure was in place and operating to ensure program income was properly determined and recorded. Cause: Management had not previously developed a system of internal controls that would ensure compliance with the program income compliance requirement. This was identified in the prior audit, but due to the timing of the prior audit recommendations, changes to implement an effective internal control structure did not occur until late 2022.. Effect: The Crawfordsville Community School Corporation is not in compliance with program requirements over program income. The failure to establish an effective internal control system may enable noncompliance with the grant agreement and the federal program income compliance requirement. Noncompliance may go undetected. Repeat Finding: No. Recommendation: We recommend the Crawfordsville Community School Corporation establish a system of internal control to ensure compliance. Training over proper internal control development and implementation may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 002 ? Child Nutrition Cluster Program Income Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: FY 2020-2021, FY 2021-2022 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Other Matters. Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.307 states in part: ?Ordinarily program income must be deducted from total allowable costs to determine the net allowable costs. Program income must be used for current costs unless the Federal awarding agency authorizes otherwise. Program income that the non-Federal entity did not anticipate at the time of the Federal award must be used to reduce the Federal award and non-Federal entity contributions rather than to increase the funds committed to the project.? Condition: During our testing, we noted the Crawfordsville Community School Corporation did not have adequate internal controls designed to ensure that program income requirements were being met. Questioned costs: Known - $620.87, Likely - $6,269.37. Known and questioned costs less than program materiality. Context: Using a statistically valid sample, CLA identified noncompliance in 2 of 60 samples tested. These related to 1) "extra money" for which support was unable to be provided to identify the source to verify it is an appropriate source of program income, and 2) a manual calculation error in the recording of one week's program income. Both of these may have been caught through an effective internal control structure, however there was no evidence for any of the selections that an appropriate control structure was in place and operating to ensure program income was properly determined and recorded. Cause: Management had not previously developed a system of internal controls that would ensure compliance with the program income compliance requirement. This was identified in the prior audit, but due to the timing of the prior audit recommendations, changes to implement an effective internal control structure did not occur until late 2022.. Effect: The Crawfordsville Community School Corporation is not in compliance with program requirements over program income. The failure to establish an effective internal control system may enable noncompliance with the grant agreement and the federal program income compliance requirement. Noncompliance may go undetected. Repeat Finding: No. Recommendation: We recommend the Crawfordsville Community School Corporation establish a system of internal control to ensure compliance. Training over proper internal control development and implementation may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 002 ? Child Nutrition Cluster Program Income Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: FY 2020-2021, FY 2021-2022 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Other Matters. Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.307 states in part: ?Ordinarily program income must be deducted from total allowable costs to determine the net allowable costs. Program income must be used for current costs unless the Federal awarding agency authorizes otherwise. Program income that the non-Federal entity did not anticipate at the time of the Federal award must be used to reduce the Federal award and non-Federal entity contributions rather than to increase the funds committed to the project.? Condition: During our testing, we noted the Crawfordsville Community School Corporation did not have adequate internal controls designed to ensure that program income requirements were being met. Questioned costs: Known - $620.87, Likely - $6,269.37. Known and questioned costs less than program materiality. Context: Using a statistically valid sample, CLA identified noncompliance in 2 of 60 samples tested. These related to 1) "extra money" for which support was unable to be provided to identify the source to verify it is an appropriate source of program income, and 2) a manual calculation error in the recording of one week's program income. Both of these may have been caught through an effective internal control structure, however there was no evidence for any of the selections that an appropriate control structure was in place and operating to ensure program income was properly determined and recorded. Cause: Management had not previously developed a system of internal controls that would ensure compliance with the program income compliance requirement. This was identified in the prior audit, but due to the timing of the prior audit recommendations, changes to implement an effective internal control structure did not occur until late 2022.. Effect: The Crawfordsville Community School Corporation is not in compliance with program requirements over program income. The failure to establish an effective internal control system may enable noncompliance with the grant agreement and the federal program income compliance requirement. Noncompliance may go undetected. Repeat Finding: No. Recommendation: We recommend the Crawfordsville Community School Corporation establish a system of internal control to ensure compliance. Training over proper internal control development and implementation may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
FINDING 2022-002 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 Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Other Matters Condition and Context 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. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. The School Corporation did not have adequate policies or procedures to ensure that contractors were paid prevailing wage rates for contracts in excess of $2,000 that were paid from federal grant funds. Two contracts during the audit period were subject to wage rate requirements. While the contracts for each contained the required prevailing wage rate clause, the School Corporation did not receive the certified payrolls from either contractor. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in ? 5.1, the following clauses. (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics . . . . (3) Payrolls and basic records. . . . (ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). The payrolls submitted shall set out accurately and completely all of the information required to be maintained under 29 CFR 5.5(a)(3)(i), except that full social security numbers and home addresses shall not be included on weekly transmittals. . . ." Cause A system of internal controls had not been developed nor implemented by management of the School Corporation to ensure compliance with the federal award and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Effect Without a proper system of internal controls in place that operated effectively, material noncompliance remained undetected. Noncompliance with the provisions of Federal statutes, regulations, the terms and conditions of the federal award, and the Special Tests and Provisions - Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls to ensure compliance and comply with the terms and conditions of the federal award as well as the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013,S425D210013, S425U200013 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, nor 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, nor implemented a system of internal controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. 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 A system of internal controls had not been designed nor implemented by management of the School Corporation to ensure compliance with the federal award and the Reporting compliance requirement. Effect The failure to design and implement an effective system of internal could have enabled noncompliance with the federal award 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 controls related to the federal award 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 2022-002 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 Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Other Matters Condition and Context 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. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. The School Corporation did not have adequate policies or procedures to ensure that contractors were paid prevailing wage rates for contracts in excess of $2,000 that were paid from federal grant funds. Two contracts during the audit period were subject to wage rate requirements. While the contracts for each contained the required prevailing wage rate clause, the School Corporation did not receive the certified payrolls from either contractor. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in ? 5.1, the following clauses. (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics . . . . (3) Payrolls and basic records. . . . (ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). The payrolls submitted shall set out accurately and completely all of the information required to be maintained under 29 CFR 5.5(a)(3)(i), except that full social security numbers and home addresses shall not be included on weekly transmittals. . . ." Cause A system of internal controls had not been developed nor implemented by management of the School Corporation to ensure compliance with the federal award and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Effect Without a proper system of internal controls in place that operated effectively, material noncompliance remained undetected. Noncompliance with the provisions of Federal statutes, regulations, the terms and conditions of the federal award, and the Special Tests and Provisions - Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls to ensure compliance and comply with the terms and conditions of the federal award as well as the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013,S425D210013, S425U200013 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, nor 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, nor implemented a system of internal controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. 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 A system of internal controls had not been designed nor implemented by management of the School Corporation to ensure compliance with the federal award and the Reporting compliance requirement. Effect The failure to design and implement an effective system of internal could have enabled noncompliance with the federal award 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 controls related to the federal award 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 2022-002 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 Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Other Matters Condition and Context 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. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. The School Corporation did not have adequate policies or procedures to ensure that contractors were paid prevailing wage rates for contracts in excess of $2,000 that were paid from federal grant funds. Two contracts during the audit period were subject to wage rate requirements. While the contracts for each contained the required prevailing wage rate clause, the School Corporation did not receive the certified payrolls from either contractor. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in ? 5.1, the following clauses. (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics . . . . (3) Payrolls and basic records. . . . (ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). The payrolls submitted shall set out accurately and completely all of the information required to be maintained under 29 CFR 5.5(a)(3)(i), except that full social security numbers and home addresses shall not be included on weekly transmittals. . . ." Cause A system of internal controls had not been developed nor implemented by management of the School Corporation to ensure compliance with the federal award and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Effect Without a proper system of internal controls in place that operated effectively, material noncompliance remained undetected. Noncompliance with the provisions of Federal statutes, regulations, the terms and conditions of the federal award, and the Special Tests and Provisions - Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls to ensure compliance and comply with the terms and conditions of the federal award as well as the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013,S425D210013, S425U200013 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, nor 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, nor implemented a system of internal controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. 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 A system of internal controls had not been designed nor implemented by management of the School Corporation to ensure compliance with the federal award and the Reporting compliance requirement. Effect The failure to design and implement an effective system of internal could have enabled noncompliance with the federal award 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 controls related to the federal award 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 2022-001 Subject: COVID-19 - Education Stabilization Fund - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425U Federal Award Number and Year (or Other Identifying Number): S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation was a participating member in the Central Nine Career Center (Center). As a member, the School Corporation was responsible for providing financial contributions to support the Center's operations. In 2019, the Center's Executive Director commissioned a facilities study for purposes of addressing the increase in enrollment at the Center. Based on the results of the study, the Center's Governing Board approved an expansion project in May of 2021, with the construction costs to be split between the member schools based upon each member school's student enrollment at the Center. As a result of that calculation, the School Corporation's contribution to the Center for the construction costs was $472,963. The School Corporation elected to use the American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER) funds awarded under the COVID-19 - Education Stabilization Fund to pay this obligation to the Center in December 2021. Although the School Corporation incurred the financial obligation within the grant's period of performance, the origins of the project predated the COVID-19 pandemic. The project's stated purpose did not provide any evidence that it was to prevent, prepare for, or respond to COVID-19. Additionally, the payment was made without proper supporting documentation. The claim for payment was prepared based upon an invoice submitted to the School Corporation from the Center that listed the amount due on a single line item without a breakdown or itemized detail to support the expense from the federal award. We consider the total payment of $472,963 to be questioned costs. The lack of internal controls and noncompliance was isolated to this single payment. 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). . . ." American Rescue Plan Act section 2001(e) states in part: "Uses of Funds. - A local education agency that receives funds under this section - . . . (2) shall use the remaining funds for any of the following: . . . (E) Coordination of preparedness and response efforts of local education agencies with State, local, Tribal, and territorial public health departments, and other relevant agencies, to improve coordinated responses among such entities to prevent, prepare for, and respond to coronavirus. . . . (G) Developing and implementing procedures and systems to improve the preparedness and response efforts of local educational agencies. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 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: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. . . . (g) be adequately documented. . . ." Cause The system of internal controls over the review of federal award expenditures developed by management of the School Corporation was not properly implemented, nor was it operating effectively to ensure expenditures were in compliance with the terms and conditions of the federal award, as well as the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect Without a proper system of internal controls in place that operated effectively, material noncompliance remained undetected. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funds to the School Corporation. Questioned Costs Questioned costs in the amount of $472,963, were identified as noted in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls to ensure expenditures made from federal awards are in compliance with the terms and conditions of the federal award, as well as the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 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 Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Other Matters Condition and Context 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. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. The School Corporation did not have adequate policies or procedures to ensure that contractors were paid prevailing wage rates for contracts in excess of $2,000 that were paid from federal grant funds. Two contracts during the audit period were subject to wage rate requirements. While the contracts for each contained the required prevailing wage rate clause, the School Corporation did not receive the certified payrolls from either contractor. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in ? 5.1, the following clauses. (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics . . . . (3) Payrolls and basic records. . . . (ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). The payrolls submitted shall set out accurately and completely all of the information required to be maintained under 29 CFR 5.5(a)(3)(i), except that full social security numbers and home addresses shall not be included on weekly transmittals. . . ." Cause A system of internal controls had not been developed nor implemented by management of the School Corporation to ensure compliance with the federal award and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Effect Without a proper system of internal controls in place that operated effectively, material noncompliance remained undetected. Noncompliance with the provisions of Federal statutes, regulations, the terms and conditions of the federal award, and the Special Tests and Provisions - Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls to ensure compliance and comply with the terms and conditions of the federal award as well as the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013,S425D210013, S425U200013 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, nor 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, nor implemented a system of internal controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. 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 A system of internal controls had not been designed nor implemented by management of the School Corporation to ensure compliance with the federal award and the Reporting compliance requirement. Effect The failure to design and implement an effective system of internal could have enabled noncompliance with the federal award 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 controls related to the federal award 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.
2022 ? 008 Reporting (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Emergency Rental Assistance Program Assistance Listing Number: 21.027, 21.023 Federal Award Identification Number and Year: ALN 21.027 ? Pub. L. No. 117-2 2021 ALN 21.023 ? ERA0335 - 2021 Award Period: ALN 21.027 ? 5/10/2021 - 12/31/2026 ALN 21.023 ? 1/20/2021 - 9/30/2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.302 Financial management of 2 CFR Part 200, the non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to ? 200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to the Compliance Supplement 2022 Part 3, program income does not include interest earned on advances of federal funds. Condition: During our testing, it was noted that the City did not have effective internal controls in place to ensure accurate and complete reporting. Questioned costs: None Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? For the interim report, support was not provided for Category 1.7 Capital Investments or Physical Plant Changes to Public Facilities that respond to the COVID-19 public health emergency Cumulative Obligations of approximately $280.2K. The City did, however, cancel this project after the initial reporting. 2022 ? 008 Reporting (Significant Deficiency and Noncompliance) (Continued) ALN 21.027 (continued) ? For the Project and Expenditure Report 1, we noted the following exceptions. o Project Name: Police Vehicles Total Cumulative Obligations of approximately $2,654,705. The City identified requisitions and purchase orders of approximately $2,655,183. Thus, a variance of $478. o Project Name: Police Vehicles Total Cumulative Obligations and Total Cumulative Expenditures of approximately $2,654,705 and $1,095,985, respectively, are listed twice in the project overview. Thus, the project is duplicated in the Total Obligations and Total Expenditures in the overview section. The City states this to be a glitch of the portal. However, there is no communication between the City and Treasury to evidence the Treasury's acknowledgment of this glitch in the portal. o Project Name: Eviction Prevention: New Mexico Legal Aid Total Cumulative Obligations of approximately $216K. The total should be approximately $26K. Thus, a variance of $190K. ? Subaward No: SUB-0034501 Period of Performance Start and End of 9/1/2021 to 12/31/2022. However, the subrecipient agreement signed by all parties early September 2021 has a Subaward Period of Performance Start and End Date 9/14/2021 to 3/31/2022. ? Subaward No: SUB-0034394 Period of Performance Start and End of 10/25/2021 to 12/31/2022. However, the contract control form approved by all parties late October 2021 has a contract term 10/20/2021 to 10/19/2022. ? Subaward No: SUB-0034455 Subaward Date of 3/11/2021. This date is the Federal Award Date of Award to the Recipient by the Federal Agency not the subaward start date of 9/1/2021. The subrecipient agreement signed by all parties 9/29/2021 and 10/1/2021. ? Subaward No: SUB-0034462 Subaward Date of 3/11/2021. This date is the Federal Award Date of Award to the Recipient by the Federal Agency not the subaward start date of 9/1/2021. The subrecipient agreement signed by all parties late December 2021. ? Expenditures for Awards more than $50,000 ? All projects have a Subaward Amount of 54405428.50. The City states this to be an error with the portal exporting. However, there is no communication between the City and Treasury to evidence the Treasury's acknowledgment of this error with portal exporting. ? Subaward Crossroads for Women amount of $750K with Subaward Period of Performance Start and End Date of 12/1/2021 to 12/31/2024 not included in the report. Agreement signed by all parties end December 2021. ? Contractual 2021 expenditures of approximately $122K not included in the report. o For the Project and Expenditure Report 2, we noted the following exceptions. ? Subaward No: SLFRP0013-RIVENROCK Subaward Obligation of $50K. However, total purchase order amount of approximately $74.5K. Thus, a variance of approximately $24.5K. ? Subaward No: 33-202200796 Subaward Date of 9/1/2021 and Period of Performance Start and End of 9/1/2021 to 12/31/2023. However, the subrecipient agreement signed by all parties end December 2021 has a Subaward Date of 12/1/2021 and Subaward Period of Performance Start and End Date 12/1/2021 to 12/31/2024. ? Payments To Individuals Expenditure: EN-00044853 Total Period Expenditure Amount of approximately $6.9 million. Amount includes approximately $128.1K of contractor payments not business grants. 2022 ? 008 Reporting (Significant Deficiency and Noncompliance) (Continued) ALN 21.023 ? For 3 of 5 financial reports, the City reported interest earned on advances of federal funds totaling approximately $380.8K as program income. However, interest earned on advances of federal funds is not program income. ? For 1 of 5 special quarterly reports, we noted the following exceptions. o The City did not provide support for any changes from the last report we had which was ERA 1 Quarter 3 2021 (July-September). o The City incorrectly reported cumulative expenditures to date of approximately $13.1 million The amount reported should have been approximately $17.1 million based on a reconciliation provided to us by the City. Thus, a variance of approximately $4 million. o The City incorrectly reported cumulative obligations to date of approximately $23.7 million. The amount reported should have been approximately $23.6 million based on a reconciliation provided to us by the City. Thus, a variance of approximately $151K. Cause: The City lacks effective internal controls and procedures over financial grant management to ensure submitted reports are complete and agree to supporting documentation. Effect: The auditor noted instances of noncompliance. Noncompliance results in inaccurate reporting. Recommendation: We recommend the City design controls to ensure compliance with federal financial management regulation. Management Response: The City agrees with the finding. The City will implement controls to ensure compliance with federal financial management regulations. The City recognizes that it needs to improve its procedures for preparing quarterly report for Treasury funds. Going forward, the Family and Community Services Department will work with the Grants Section to develop and implement standardized procedures for identifying and documenting expenditures, and for reviewing quarterly reports prior to submission. Timeline and Responsible Position: June 2023 ? City Controller/DFAS Deputy Director and Director of Family & Community Services
2022 ? 005 Allowable Activities and Costs/Cost Principals (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury U.S. Department of Housing U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds HOME Investment Partnerships Program Federal Transit Cluster Assistance Listing Number: 21.027, 14.239, Multiple Federal Award Identification Number and Year: ALN 21.027: Pub. L. No. 117-2-2021 ALN 14.239 M-19-MC-35-0209 2019 & M-16-MC-35-0209 2016; ALN Multiple: NM-2020-010 Award Period: ALN 21.027 ? 5/10/2021 - 12/31/2026 ALN 14.239 ? 7/22/2016-9/1/2027 ALN Multiple ? 1/20/2020-12/31/2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to the City's ARPA Program Plan Memorandum, all applicants must have 50 or fewer full-time equivalent (FTE) employees. Once the application is complete, it will enter a secondary review for final decision. Once a business receives a grant they must submit a report six months after as detailed in the grant agreement. Condition: During single audit testwork over reporting, the following issues were noted which are detailed by ALN Number. ALN 21.027 ? The City did not obtain employment verification for one applicant, perform a secondary review for two applications, nor obtain the six-month report for six applications. ALN 14.239/Multiple ? The City did not have effective internal controls in place to ensure timesheets are prepared timely as well as payroll grant hours accurately recorded in the accounting system. 2022 ? 005 Allowable Activities and Costs/Cost Principals (Significant Deficiency and Noncompliance) (Continued) Questioned costs: ALN 21.027: $30,000 ALN 14.239: $69.63 ALN Multiple: None Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? 1 of the 60 small business applications did not have the number of employees. ? 2 of the 60 small business grant applications did not have a secondary review for final decision. ? 6 of the 60 small businesses did not submit a report six months after receiving the grant. ALN 14.239 ? During our testing, we noted three instances in which an employee's timesheet was not signed by the employee and their supervisor until between 8-12 months after the pay period ended. Also, we noted three instances in which grant hours listed on timesheets did not agree to the hours recorded in the accounting system and charged to the grant. ALN Multiple ? During our testing, we noted two instances in which an employee's time was not approved by their supervisor. Cause: The City did not follow its ARPA Program Plan Memorandum. Additionally, the City lacks a policy and internal control related to the required timing of timesheet preparation, review and approval. Effect: The auditor noted instances of noncompliance and lack of effective internal controls. Noncompliance results in ineligible small businesses receiving grant funding and the City not receiving the required reporting by the small businesses. Recommendation: We recommend the City design controls to ensure an adequate review process is in place to review applications to determine the eligibility of small business for grant funding. Also, we recommend the City design controls to ensure any required reports are submitted by grantees. Additionally, we recommend the City create a policy related to timesheet preparation, review and approval as well as develop a procedure to ensure all grant hours listed on timesheets are reconciled to the accounting system. Management Response: Management agrees with the finding. The grants distributed by the Economic Development Department were a lifeline to small businesses that were just holding on. While a strong program was set up in a very short timeframe some reviews and follow-up were not completed. Additionally, the Family & Community Services Department will ensure timesheets are signed timely. Additionally, the department will work with the Grants Section to ensure timesheets, Kronos and Peoplesoft agree. Timeline and Responsible Position: June 2023 ? Department Directors, Economic Development, Family & Community Services and Transit
2022 ? 007 (Previously 2021-003) Subrecipient Monitoring (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: Pub. L. No. 117-2-2021 Award Period: 5/10/2021 - 12/31/2026 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to ? 200.332 Requirements for pass-through entities of 2 CFR Part 200, all pass-through entities must: ? Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. ? Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. ? Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in ? 200.501. ? Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. According to the City's subrecipient monitoring policies and procedures, monitoring of subrecipients shall be conducted as often as may be required at the discretion of the Community Development Division or at least once per program year. An annual Risk Assessment will be completed to determine a ranking for the activity. The Risk Assessment ranking score will determine whether a monitoring review will occur. Condition: During our testing, it was noted that the City did not follow federal subrecipient monitoring and management regulation nor its subrecipient monitoring policies and procedures. Questioned costs: None 2022 ? 007 (Previously 2021-003) Subrecipient Monitoring (Significant Deficiency and Noncompliance) (Continued) Context: During our testing, we noted the following exceptions: ? For 2 of 4 subrecipients, the City did not utilize the risk assessment tool specific to ARPA which does have a different risk assessment ranking score determining the monitoring of the subrecipient. The City did, however, perform a monitoring visit for the subrecipients. ? For 1 of 4 subrecipients, the City did not utilize the risk assessment tool specific to ARPA. The City utilized the AGA Risk Assessment Monitoring Tool. We noted the following exceptions. ? According to the Introduction of the AGA Risk Assessment Monitoring Tool, while the risk assessment monitoring tool may be useful in supplementing existing tools, it is not intended to replace any risk assessment tools that may already be in use by monitoring agencies. Further, the City omitted the Programmatic Assessment of the AGA Risk Assessment Monitoring Tool. ? According to the Introduction of the AGA Risk Assessment Monitoring Tool, in using the risk assessment tool, monitoring agencies are encouraged to develop applicable risk factors to evaluate programmatic compliance risk and should use professional judgment in developing a weighted scoring system for each component of the assessment. The City did not develop a weighted scoring system for each component of the assessment. ? No evidence of approval of the AGA Risk Assessment Monitoring Tool. ? In the Monitoring/Audit Assessment section of the AGA Risk Assessment Monitoring Tool, the City marked all N/A based on a response of the subrecipient has not needed to complete a single audit in the past. However, the subrecipient did have a single audit for the fiscal year end date of 12/31/2020 with the Federal Audit Clearinghouse receiving the audit report on 5/27/2021. No review of the single audit by the City. Management?s Progress for Repeat Findings: The City Controller reviewed the listing of subrecipient risk assessments for 2022 and the listing was determined to be complete. The City will update the subrecipient monitoring policies and procedures ad provide training to the departments. Cause: The City failed to follow federal subrecipient monitoring and management regulation nor its subrecipient monitoring policies and procedures. Repeat Finding: 2021-003 Effect: The auditor noted instances of noncompliance. Noncompliance results in subrecipients' noncompliance with federal statutes, regulations, and the terms and conditions of the subaward. Recommendation: We recommend the City design controls to ensure compliance with federal subrecipient monitoring and management regulation and its subrecipient monitoring policies and procedures. Management Response: Management agrees with the finding. The City will develop standard City-wide subrecipient management policies and procedures including risk assessment and monitoring tools. Additionally, any federal program with two or more City departments managing subrecipients will use the same subrecipient tools to ensure consistency. Timeline and Responsible Position: June 2023 ? City Controller/DFAS Deputy Director
2022 ? 008 Reporting (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Emergency Rental Assistance Program Assistance Listing Number: 21.027, 21.023 Federal Award Identification Number and Year: ALN 21.027 ? Pub. L. No. 117-2 2021 ALN 21.023 ? ERA0335 - 2021 Award Period: ALN 21.027 ? 5/10/2021 - 12/31/2026 ALN 21.023 ? 1/20/2021 - 9/30/2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.302 Financial management of 2 CFR Part 200, the non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to ? 200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to the Compliance Supplement 2022 Part 3, program income does not include interest earned on advances of federal funds. Condition: During our testing, it was noted that the City did not have effective internal controls in place to ensure accurate and complete reporting. Questioned costs: None Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? For the interim report, support was not provided for Category 1.7 Capital Investments or Physical Plant Changes to Public Facilities that respond to the COVID-19 public health emergency Cumulative Obligations of approximately $280.2K. The City did, however, cancel this project after the initial reporting. 2022 ? 008 Reporting (Significant Deficiency and Noncompliance) (Continued) ALN 21.027 (continued) ? For the Project and Expenditure Report 1, we noted the following exceptions. o Project Name: Police Vehicles Total Cumulative Obligations of approximately $2,654,705. The City identified requisitions and purchase orders of approximately $2,655,183. Thus, a variance of $478. o Project Name: Police Vehicles Total Cumulative Obligations and Total Cumulative Expenditures of approximately $2,654,705 and $1,095,985, respectively, are listed twice in the project overview. Thus, the project is duplicated in the Total Obligations and Total Expenditures in the overview section. The City states this to be a glitch of the portal. However, there is no communication between the City and Treasury to evidence the Treasury's acknowledgment of this glitch in the portal. o Project Name: Eviction Prevention: New Mexico Legal Aid Total Cumulative Obligations of approximately $216K. The total should be approximately $26K. Thus, a variance of $190K. ? Subaward No: SUB-0034501 Period of Performance Start and End of 9/1/2021 to 12/31/2022. However, the subrecipient agreement signed by all parties early September 2021 has a Subaward Period of Performance Start and End Date 9/14/2021 to 3/31/2022. ? Subaward No: SUB-0034394 Period of Performance Start and End of 10/25/2021 to 12/31/2022. However, the contract control form approved by all parties late October 2021 has a contract term 10/20/2021 to 10/19/2022. ? Subaward No: SUB-0034455 Subaward Date of 3/11/2021. This date is the Federal Award Date of Award to the Recipient by the Federal Agency not the subaward start date of 9/1/2021. The subrecipient agreement signed by all parties 9/29/2021 and 10/1/2021. ? Subaward No: SUB-0034462 Subaward Date of 3/11/2021. This date is the Federal Award Date of Award to the Recipient by the Federal Agency not the subaward start date of 9/1/2021. The subrecipient agreement signed by all parties late December 2021. ? Expenditures for Awards more than $50,000 ? All projects have a Subaward Amount of 54405428.50. The City states this to be an error with the portal exporting. However, there is no communication between the City and Treasury to evidence the Treasury's acknowledgment of this error with portal exporting. ? Subaward Crossroads for Women amount of $750K with Subaward Period of Performance Start and End Date of 12/1/2021 to 12/31/2024 not included in the report. Agreement signed by all parties end December 2021. ? Contractual 2021 expenditures of approximately $122K not included in the report. o For the Project and Expenditure Report 2, we noted the following exceptions. ? Subaward No: SLFRP0013-RIVENROCK Subaward Obligation of $50K. However, total purchase order amount of approximately $74.5K. Thus, a variance of approximately $24.5K. ? Subaward No: 33-202200796 Subaward Date of 9/1/2021 and Period of Performance Start and End of 9/1/2021 to 12/31/2023. However, the subrecipient agreement signed by all parties end December 2021 has a Subaward Date of 12/1/2021 and Subaward Period of Performance Start and End Date 12/1/2021 to 12/31/2024. ? Payments To Individuals Expenditure: EN-00044853 Total Period Expenditure Amount of approximately $6.9 million. Amount includes approximately $128.1K of contractor payments not business grants. 2022 ? 008 Reporting (Significant Deficiency and Noncompliance) (Continued) ALN 21.023 ? For 3 of 5 financial reports, the City reported interest earned on advances of federal funds totaling approximately $380.8K as program income. However, interest earned on advances of federal funds is not program income. ? For 1 of 5 special quarterly reports, we noted the following exceptions. o The City did not provide support for any changes from the last report we had which was ERA 1 Quarter 3 2021 (July-September). o The City incorrectly reported cumulative expenditures to date of approximately $13.1 million The amount reported should have been approximately $17.1 million based on a reconciliation provided to us by the City. Thus, a variance of approximately $4 million. o The City incorrectly reported cumulative obligations to date of approximately $23.7 million. The amount reported should have been approximately $23.6 million based on a reconciliation provided to us by the City. Thus, a variance of approximately $151K. Cause: The City lacks effective internal controls and procedures over financial grant management to ensure submitted reports are complete and agree to supporting documentation. Effect: The auditor noted instances of noncompliance. Noncompliance results in inaccurate reporting. Recommendation: We recommend the City design controls to ensure compliance with federal financial management regulation. Management Response: The City agrees with the finding. The City will implement controls to ensure compliance with federal financial management regulations. The City recognizes that it needs to improve its procedures for preparing quarterly report for Treasury funds. Going forward, the Family and Community Services Department will work with the Grants Section to develop and implement standardized procedures for identifying and documenting expenditures, and for reviewing quarterly reports prior to submission. Timeline and Responsible Position: June 2023 ? City Controller/DFAS Deputy Director and Director of Family & Community Services
2022 ? 005 Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster (IDEA) Assistance Listing Number: 84.027/84.173 Federal Award Identification Number and Year: FY 2021 and FY 2022 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: H027A190084, H027X210084, H173A180104, H173A210104, H173X10104 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance, (Modified Opinion) Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction.2 CFR 200.303 states in part: ?The Non-Federal entity must: (d) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: The school corporation has not developed a system of internal controls that would have ensured compliance with suspension and debarment requirements. Questioned costs: None Context: For 4 of 4 transactions tested, the School Corporation was unable to provide documentation indicating they had verified the entity is not suspended or otherwise excluded from participating in the transaction. Cause: The process has taken longer than expected to implement accurately. Effect: The auditor noted no instances of noncompliance with the provisions of suspension, and debarment; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: The finding is a repeat of a finding in the immediately prior audit report. Prior audit finding number was 2020-006. Recommendation: We recommend the School Corporation design procedures and controls to ensure compliance with suspension and debarment provisions. Before entering into a contract, a check should be performed and retained to support the contractor status. Views of responsible officials: There is no disagreement with the audit finding.
2022 ? 006 Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster (IDEA) Assistance Listing Number: 84.027/84.173 Federal Award Identification Number and Year: FY 2021 and FY 2022 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: H027A190084, H027X210084, H173A180104, H173A210104, H173X10104 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200.2 CFR 200.303 states in part: ?The Non-Federal entity must: (e) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: During testing, it was noted that the School did not retain documentation to support compliance with federal procurement standards. Questioned costs: $146,707 Context: For 7 of 7 vendors tested, no documentation was maintained to support the method of procurement, selection of contract type, contractor selection or rejection, or the basis for the contract price. The sample was a statistically valid sample. Cause: Lack of formal procedures over federal purchase. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement or the compliance requirement could have resulted in the loss of federal funds to the School Corporation Repeat Finding: The finding is a repeat of a finding in the immediately prior audit report. Prior audit finding number was 2020-005. Recommendation: We recommend that School management establish a system of internal controls to ensure compliance with the grant agreement and procurement requirements of the procurement process. Views of responsible officials: There is no disagreement with the audit finding.
2022 ? 007 Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster (IDEA) Assistance Listing Number: 84.027/84.173 Federal Award Identification Number and Year: FY 2021 and FY 2022 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: H027A190084, H027X210084, H173A180104, H173A210104, H173X10104 Award Period: July 1, 2020 through June 30, 2022 Federal Agency: U.S. Department of Education Federal Program Name: COVID-19 Education Stabilization Fund Assistance Listing Number: 84.425D Federal Award Identification Number and Year: FY 2021 and FY 2022 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D200013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR 200.303 states in part: ?The Non-Federal entity must: (f) 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/Context: Two of 60 Special Education Cluster transactions and 7 of 40 Education Stabilization Fund transactions tested did not have documentation of review and approval. Questioned costs: None Cause: Management oversight. Effect: Lack of proper documentation of controls over compliance with allowable costs/allowable activities could result in errors being reported and going undetected or not detected in a timely manner. This could ultimately result in questioned costs. Repeat Finding: No Recommendation: We recommend that the School Corporation implement procedures and controls to ensure all disbursements have proper support and proper approval documented. Views of responsible officials: There is no disagreement with the audit finding.
2022 ? 005 Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster (IDEA) Assistance Listing Number: 84.027/84.173 Federal Award Identification Number and Year: FY 2021 and FY 2022 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: H027A190084, H027X210084, H173A180104, H173A210104, H173X10104 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance, (Modified Opinion) Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction.2 CFR 200.303 states in part: ?The Non-Federal entity must: (d) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: The school corporation has not developed a system of internal controls that would have ensured compliance with suspension and debarment requirements. Questioned costs: None Context: For 4 of 4 transactions tested, the School Corporation was unable to provide documentation indicating they had verified the entity is not suspended or otherwise excluded from participating in the transaction. Cause: The process has taken longer than expected to implement accurately. Effect: The auditor noted no instances of noncompliance with the provisions of suspension, and debarment; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: The finding is a repeat of a finding in the immediately prior audit report. Prior audit finding number was 2020-006. Recommendation: We recommend the School Corporation design procedures and controls to ensure compliance with suspension and debarment provisions. Before entering into a contract, a check should be performed and retained to support the contractor status. Views of responsible officials: There is no disagreement with the audit finding.
2022 ? 006 Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster (IDEA) Assistance Listing Number: 84.027/84.173 Federal Award Identification Number and Year: FY 2021 and FY 2022 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: H027A190084, H027X210084, H173A180104, H173A210104, H173X10104 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200.2 CFR 200.303 states in part: ?The Non-Federal entity must: (e) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: During testing, it was noted that the School did not retain documentation to support compliance with federal procurement standards. Questioned costs: $146,707 Context: For 7 of 7 vendors tested, no documentation was maintained to support the method of procurement, selection of contract type, contractor selection or rejection, or the basis for the contract price. The sample was a statistically valid sample. Cause: Lack of formal procedures over federal purchase. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement or the compliance requirement could have resulted in the loss of federal funds to the School Corporation Repeat Finding: The finding is a repeat of a finding in the immediately prior audit report. Prior audit finding number was 2020-005. Recommendation: We recommend that School management establish a system of internal controls to ensure compliance with the grant agreement and procurement requirements of the procurement process. Views of responsible officials: There is no disagreement with the audit finding.
2022 ? 007 Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster (IDEA) Assistance Listing Number: 84.027/84.173 Federal Award Identification Number and Year: FY 2021 and FY 2022 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: H027A190084, H027X210084, H173A180104, H173A210104, H173X10104 Award Period: July 1, 2020 through June 30, 2022 Federal Agency: U.S. Department of Education Federal Program Name: COVID-19 Education Stabilization Fund Assistance Listing Number: 84.425D Federal Award Identification Number and Year: FY 2021 and FY 2022 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D200013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR 200.303 states in part: ?The Non-Federal entity must: (f) 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/Context: Two of 60 Special Education Cluster transactions and 7 of 40 Education Stabilization Fund transactions tested did not have documentation of review and approval. Questioned costs: None Cause: Management oversight. Effect: Lack of proper documentation of controls over compliance with allowable costs/allowable activities could result in errors being reported and going undetected or not detected in a timely manner. This could ultimately result in questioned costs. Repeat Finding: No Recommendation: We recommend that the School Corporation implement procedures and controls to ensure all disbursements have proper support and proper approval documented. Views of responsible officials: There is no disagreement with the audit finding.
2022 ? 005 Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster (IDEA) Assistance Listing Number: 84.027/84.173 Federal Award Identification Number and Year: FY 2021 and FY 2022 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: H027A190084, H027X210084, H173A180104, H173A210104, H173X10104 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance, (Modified Opinion) Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction.2 CFR 200.303 states in part: ?The Non-Federal entity must: (d) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: The school corporation has not developed a system of internal controls that would have ensured compliance with suspension and debarment requirements. Questioned costs: None Context: For 4 of 4 transactions tested, the School Corporation was unable to provide documentation indicating they had verified the entity is not suspended or otherwise excluded from participating in the transaction. Cause: The process has taken longer than expected to implement accurately. Effect: The auditor noted no instances of noncompliance with the provisions of suspension, and debarment; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: The finding is a repeat of a finding in the immediately prior audit report. Prior audit finding number was 2020-006. Recommendation: We recommend the School Corporation design procedures and controls to ensure compliance with suspension and debarment provisions. Before entering into a contract, a check should be performed and retained to support the contractor status. Views of responsible officials: There is no disagreement with the audit finding.