FINDING 2022-002Subject: COVID-19 - Education Stabilization Fund - SpecialTests and Provisions - Wage Rate RequirementsFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listing Number: 84.425DFederal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Special Tests and Provisions - Wage Rate RequirementsAudit Findings: Material Weakness, Modified OpinionCondition and ContextAn effective internal control system, which would include segregation of duties, was not in place atthe School Corporation in order to ensure compliance with requirements related to the grant agreementand the Special Tests and Provisions - Wage Rate Requirements compliance requirement.Construction contracts in excess of $2,000 financed by federal assistance funds must pay wagesnot less than those established for the locality of the project (prevailing wage rates) by the Department ofLabor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their constructioncontracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor complywith these requirements and the DOL regulations. This would include a requirement to submit a copy ofthe payroll and statement of compliance to the entity for each week in which contract work was performed.The School Corporation had not designed, nor implemented a system of internal controls to ensurethat the wage rate requirements were met for a construction project. The School Corporation signed acontract with Heflin Industries to upgrade chillers and boilers. The total amount of the project was$2,176,500. The contract between the School Corporation and Heflin Industries did not include the requiredwage rate provisions clause. Additionally, certified payrolls were not submitted and maintained by theSchool Corporation for audit.The lack of internal controls and failure to maintain and provide adequate supporting documentationwere systemic issues throughout the audit period.INDIANA STATE BOARD OF ACCOUNTS17MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Farmwork', issued by the Committee ofSponsoring 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 anycontract in excess of $2,000 which is entered into for the actual construction, alteration and/orrepair, including painting and decorating, of a public building or public work, or building or workfinanced in whole or in part from Federal funds or in accordance with guarantees of a Federalagency or financed from funds obtained by pledge of any contract of a Federal agency to makea 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, thefollowing clauses . . .(1) Minimum wages.(i) All laborers and mechanics employed or working upon the site of the work (orunder the United States Housing Act of 1937 or under the Housing Act of 1949 in theconstruction or development of the project), will be paid unconditionally and not lessoften than once a week, and without subsequent deduction or rebate on any account(except such payroll deductions as are permitted by regulations issued by theSecretary of Labor under the Copeland Act (29 CFR part 3)), the full amount ofwages and bona fide fringe benefits (or cash equivalents thereof) due at time ofpayment computed at rates not less than those contained in the wage determinationof 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 thecontractor and such laborers and mechanics. . . .(3) Payrolls and basic records. . . .(ii)(A) The contractor shall submit weekly for each week in which any contract workis performed a copy of all payrolls to the (write in name of appropriate federalagency) if the agency is a party to the contract, but if the agency is not sucha party, the contractor will submit the payrolls to the applicant, sponsor, orowner, as the case may be, for transmission to the (write in name of agency).. . ."INDIANA STATE BOARD OF ACCOUNTS18MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)2 CFR 200 Appendix II states in part:"In addition to other provisions required by the Federal agency or non-Federal entity; allcontracts made by the non-Federal entity under the Federal award must contain provisionscovering the following, as applicable. . . .(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federalprogram legislation, all prime construction contracts in excess of $2,000 awarded by nonFederal entities must include a provision for compliance with the Davis-Bacon Act(40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Laborregulations (29 CFR Part 5, "Labor Standards Provisions Applicable to Contracts CoveringFederally Financed and Assisted Construction"). In accordance with the statute,contractors must be required to pay wages to laborers and mechanics at a rate not lessthan the prevailing wages specified in a wage determination made by the Secretary ofLabor. In addition, contractors must be required to pay wages not less than once a week.. . ."CauseManagement had not designed nor implemented a system of internal controls that would haveensured compliance with the grant agreement and the Special Tests and Provisions - Wage RateRequirements compliance requirement.EffectThe failure to establish an effective internal control system and to retain and provide appropriatesupporting documentation prevented the determination of the School Corporation's compliance with theSpecial Tests and Provisions - Wage Rate Requirements compliance requirement.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish internal controls to ensurecompliance and comply with the grant agreement and the Special Tests and Provisions - Wage RateRequirements compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-005Subject: COVID-19 - Education Stabilization Fund - ReportingFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Number: 84.425DFederal Award Number and Year (or Other Identifying Number): S425D200013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Other MattersINDIANA STATE BOARD OF ACCOUNTS22MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Condition and ContextAn effective internal control system was not designed nor implemented at the School Corporationto ensure compliance with the requirements related to the grant agreement and the Reporting compliancerequirement.The School Corporation filed the four required Elementary and Secondary School EmergencyRelief (ESSER) annual data reports. However, the ESSER I, Year 1 and ESSER I, Year 2 reports werenot supported by the School Corporation's records. For each of the reports, two key line items wereselected for verification, none of the line items tested were supported by the School Corporation's records.For the ESSER I, Year 2 report the data included expenditures for two months beyond the reporting period.The lack of internal controls and noncompliance were applicable to the ESSER I grant during theaudit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.334 states in part:"Financial records, supporting documents, statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the dateof submission of the final expenditure report or, for Federal awards that are renewed quarterlyor 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 ofa 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 Federalaward or program in accordance with the reporting requirements set forth in ?? 200.328and 200.329. . . .(3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federalawards, authorizations, obligations, unobligated balances, assets, expenditures,income and interest and be supported by source documentation. . . ."INDIANA STATE BOARD OF ACCOUNTS23MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and formatthat assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out otherresponsibilities under the program."CauseManagement had not designed, nor implemented a system of internal controls that would haveensured compliance or that supporting documentation would have been maintained and available for auditrelated to the Reporting compliance requirement.EffectThe failure to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the Reporting compliance requirement. Noncompliancewith the grant agreement and the Reporting compliance requirement could result in the loss of future federalfunds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and available for audit and comply with the grantagreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004Subject: COVID-19 - Education Stabilization Fund - Special Testsand Provisions - Participation of Private School ChildrenFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Number: 84.425DFederal Award Number and Year (or Other Identifying Number): S425D200013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Special Tests and Provisions - Participation of Private School ChildrenAudit Finding: Material WeaknessCondition and ContextAn effective internal control system was not designed nor implemented at the School Corporationin order to ensure compliance with requirements related to the grant agreement and the Special Tests andProvisions - Participation of Private School Children compliance requirement.Although the School Corporation stated the grant coordinator reviewed and approved expendituresfor the nonpublic schools, no auditable evidence of the review and approval was presented for audit.The lack of internal controls was a systemic issue throughout the audit period.INDIANA STATE BOARD OF ACCOUNTS21MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."CauseManagement had not developed an effective system of internal controls that would have ensuredcompliance with the grant agreement and the Special Tests and Provisions - Participation of Private SchoolChildren compliance requirement.EffectThe failure to establish an effective system of internal controls could have enabled noncompliancewith the grant agreement and the Special Tests and Provisions - Participation of Private School Childrencompliance requirement.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internalcontrols to ensure compliance with the grant agreement and the Special Tests and Provisions - Participationof Private School Children compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002Subject: COVID-19 - Education Stabilization Fund - SpecialTests and Provisions - Wage Rate RequirementsFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listing Number: 84.425DFederal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Special Tests and Provisions - Wage Rate RequirementsAudit Findings: Material Weakness, Modified OpinionCondition and ContextAn effective internal control system, which would include segregation of duties, was not in place atthe School Corporation in order to ensure compliance with requirements related to the grant agreementand the Special Tests and Provisions - Wage Rate Requirements compliance requirement.Construction contracts in excess of $2,000 financed by federal assistance funds must pay wagesnot less than those established for the locality of the project (prevailing wage rates) by the Department ofLabor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their constructioncontracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor complywith these requirements and the DOL regulations. This would include a requirement to submit a copy ofthe payroll and statement of compliance to the entity for each week in which contract work was performed.The School Corporation had not designed, nor implemented a system of internal controls to ensurethat the wage rate requirements were met for a construction project. The School Corporation signed acontract with Heflin Industries to upgrade chillers and boilers. The total amount of the project was$2,176,500. The contract between the School Corporation and Heflin Industries did not include the requiredwage rate provisions clause. Additionally, certified payrolls were not submitted and maintained by theSchool Corporation for audit.The lack of internal controls and failure to maintain and provide adequate supporting documentationwere systemic issues throughout the audit period.INDIANA STATE BOARD OF ACCOUNTS17MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Farmwork', issued by the Committee ofSponsoring 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 anycontract in excess of $2,000 which is entered into for the actual construction, alteration and/orrepair, including painting and decorating, of a public building or public work, or building or workfinanced in whole or in part from Federal funds or in accordance with guarantees of a Federalagency or financed from funds obtained by pledge of any contract of a Federal agency to makea 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, thefollowing clauses . . .(1) Minimum wages.(i) All laborers and mechanics employed or working upon the site of the work (orunder the United States Housing Act of 1937 or under the Housing Act of 1949 in theconstruction or development of the project), will be paid unconditionally and not lessoften than once a week, and without subsequent deduction or rebate on any account(except such payroll deductions as are permitted by regulations issued by theSecretary of Labor under the Copeland Act (29 CFR part 3)), the full amount ofwages and bona fide fringe benefits (or cash equivalents thereof) due at time ofpayment computed at rates not less than those contained in the wage determinationof 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 thecontractor and such laborers and mechanics. . . .(3) Payrolls and basic records. . . .(ii)(A) The contractor shall submit weekly for each week in which any contract workis performed a copy of all payrolls to the (write in name of appropriate federalagency) if the agency is a party to the contract, but if the agency is not sucha party, the contractor will submit the payrolls to the applicant, sponsor, orowner, as the case may be, for transmission to the (write in name of agency).. . ."INDIANA STATE BOARD OF ACCOUNTS18MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)2 CFR 200 Appendix II states in part:"In addition to other provisions required by the Federal agency or non-Federal entity; allcontracts made by the non-Federal entity under the Federal award must contain provisionscovering the following, as applicable. . . .(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federalprogram legislation, all prime construction contracts in excess of $2,000 awarded by nonFederal entities must include a provision for compliance with the Davis-Bacon Act(40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Laborregulations (29 CFR Part 5, "Labor Standards Provisions Applicable to Contracts CoveringFederally Financed and Assisted Construction"). In accordance with the statute,contractors must be required to pay wages to laborers and mechanics at a rate not lessthan the prevailing wages specified in a wage determination made by the Secretary ofLabor. In addition, contractors must be required to pay wages not less than once a week.. . ."CauseManagement had not designed nor implemented a system of internal controls that would haveensured compliance with the grant agreement and the Special Tests and Provisions - Wage RateRequirements compliance requirement.EffectThe failure to establish an effective internal control system and to retain and provide appropriatesupporting documentation prevented the determination of the School Corporation's compliance with theSpecial Tests and Provisions - Wage Rate Requirements compliance requirement.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish internal controls to ensurecompliance and comply with the grant agreement and the Special Tests and Provisions - Wage RateRequirements compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002Subject: COVID-19 - Education Stabilization Fund - SpecialTests and Provisions - Wage Rate RequirementsFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listing Number: 84.425DFederal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Special Tests and Provisions - Wage Rate RequirementsAudit Findings: Material Weakness, Modified OpinionCondition and ContextAn effective internal control system, which would include segregation of duties, was not in place atthe School Corporation in order to ensure compliance with requirements related to the grant agreementand the Special Tests and Provisions - Wage Rate Requirements compliance requirement.Construction contracts in excess of $2,000 financed by federal assistance funds must pay wagesnot less than those established for the locality of the project (prevailing wage rates) by the Department ofLabor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their constructioncontracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor complywith these requirements and the DOL regulations. This would include a requirement to submit a copy ofthe payroll and statement of compliance to the entity for each week in which contract work was performed.The School Corporation had not designed, nor implemented a system of internal controls to ensurethat the wage rate requirements were met for a construction project. The School Corporation signed acontract with Heflin Industries to upgrade chillers and boilers. The total amount of the project was$2,176,500. The contract between the School Corporation and Heflin Industries did not include the requiredwage rate provisions clause. Additionally, certified payrolls were not submitted and maintained by theSchool Corporation for audit.The lack of internal controls and failure to maintain and provide adequate supporting documentationwere systemic issues throughout the audit period.INDIANA STATE BOARD OF ACCOUNTS17MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Farmwork', issued by the Committee ofSponsoring 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 anycontract in excess of $2,000 which is entered into for the actual construction, alteration and/orrepair, including painting and decorating, of a public building or public work, or building or workfinanced in whole or in part from Federal funds or in accordance with guarantees of a Federalagency or financed from funds obtained by pledge of any contract of a Federal agency to makea 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, thefollowing clauses . . .(1) Minimum wages.(i) All laborers and mechanics employed or working upon the site of the work (orunder the United States Housing Act of 1937 or under the Housing Act of 1949 in theconstruction or development of the project), will be paid unconditionally and not lessoften than once a week, and without subsequent deduction or rebate on any account(except such payroll deductions as are permitted by regulations issued by theSecretary of Labor under the Copeland Act (29 CFR part 3)), the full amount ofwages and bona fide fringe benefits (or cash equivalents thereof) due at time ofpayment computed at rates not less than those contained in the wage determinationof 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 thecontractor and such laborers and mechanics. . . .(3) Payrolls and basic records. . . .(ii)(A) The contractor shall submit weekly for each week in which any contract workis performed a copy of all payrolls to the (write in name of appropriate federalagency) if the agency is a party to the contract, but if the agency is not sucha party, the contractor will submit the payrolls to the applicant, sponsor, orowner, as the case may be, for transmission to the (write in name of agency).. . ."INDIANA STATE BOARD OF ACCOUNTS18MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)2 CFR 200 Appendix II states in part:"In addition to other provisions required by the Federal agency or non-Federal entity; allcontracts made by the non-Federal entity under the Federal award must contain provisionscovering the following, as applicable. . . .(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federalprogram legislation, all prime construction contracts in excess of $2,000 awarded by nonFederal entities must include a provision for compliance with the Davis-Bacon Act(40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Laborregulations (29 CFR Part 5, "Labor Standards Provisions Applicable to Contracts CoveringFederally Financed and Assisted Construction"). In accordance with the statute,contractors must be required to pay wages to laborers and mechanics at a rate not lessthan the prevailing wages specified in a wage determination made by the Secretary ofLabor. In addition, contractors must be required to pay wages not less than once a week.. . ."CauseManagement had not designed nor implemented a system of internal controls that would haveensured compliance with the grant agreement and the Special Tests and Provisions - Wage RateRequirements compliance requirement.EffectThe failure to establish an effective internal control system and to retain and provide appropriatesupporting documentation prevented the determination of the School Corporation's compliance with theSpecial Tests and Provisions - Wage Rate Requirements compliance requirement.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish internal controls to ensurecompliance and comply with the grant agreement and the Special Tests and Provisions - Wage RateRequirements compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004Subject: COVID-19 - Education Stabilization Fund - Special Testsand Provisions - Participation of Private School ChildrenFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Number: 84.425DFederal Award Number and Year (or Other Identifying Number): S425D200013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Special Tests and Provisions - Participation of Private School ChildrenAudit Finding: Material WeaknessCondition and ContextAn effective internal control system was not designed nor implemented at the School Corporationin order to ensure compliance with requirements related to the grant agreement and the Special Tests andProvisions - Participation of Private School Children compliance requirement.Although the School Corporation stated the grant coordinator reviewed and approved expendituresfor the nonpublic schools, no auditable evidence of the review and approval was presented for audit.The lack of internal controls was a systemic issue throughout the audit period.INDIANA STATE BOARD OF ACCOUNTS21MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."CauseManagement had not developed an effective system of internal controls that would have ensuredcompliance with the grant agreement and the Special Tests and Provisions - Participation of Private SchoolChildren compliance requirement.EffectThe failure to establish an effective system of internal controls could have enabled noncompliancewith the grant agreement and the Special Tests and Provisions - Participation of Private School Childrencompliance requirement.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internalcontrols to ensure compliance with the grant agreement and the Special Tests and Provisions - Participationof Private School Children compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property ManagementFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Number: 84.425DFederal Award Number and Year (or Other Identifying Number): S425D210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Equipment and Real Property ManagementAudit Findings: Material Weakness, Other MattersINDIANA STATE BOARD OF ACCOUNTS19MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Condition and ContextAn effective internal control system was not in place at the School Corporation in order to ensurecompliance with requirements related to the grant agreement and the Equipment and Real PropertyManagement compliance requirement.A property record or capital asset listing which would include a description of the property, a serialnumber or other identification number, the source of funding for the property (including the federal awardidentification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage offederal participation in the project costs for the federal award under which the property was acquired, thelocation, and use and condition of the property is to be maintained for assets purchased that exceed theSchool Corporation's capitalization threshold.The School Corporation purchased one capital asset, a boiler/chiller, with the Elementary andSecondary School Emergency Relief (ESSER II) Fund award. The boiler/chiller was included in the SchoolCorporation's capital assets listing; however, the capital asset listing did not identify the source of funding.In addition, a physical inventory had not been taken in the past two years and assets were not properlymaintained and safeguarded.The lack of internal controls and noncompliance were systemic issues throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.313(d) states in part:"Management requirements. Procedures for managing equipment (including replacementequipment), whether acquired in whole or in part under a Federal award, until disposition takesplace will, as a minimum, meet the following requirements:(1) Property records must be maintained that include a description of the property, a serialnumber or other identification number, the source of funding for the property (includingthe FAIN), who holds title, the acquisition date, and cost of the property, percentage ofFederal participation in the project costs for the Federal award under which theproperty was acquired, the location, use and condition of the property, and any ultimatedisposition data including the date of disposal and sale price of the property.(2) A physical inventory of the property must be taken and the results reconciled with theproperty records at least once every two years.(3) A control system must be developed to ensure adequate safeguards to prevent loss,damage, or theft of the property. Any loss, damage, or theft must be investigated.. . ."INDIANA STATE BOARD OF ACCOUNTS20MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)CauseManagement had not designed nor implemented a system of internal controls that would haveensured compliance with the grant agreement and the Equipment and Real Property Managementcompliance requirement.EffectThe failure to establish an effective internal control system enabled material noncompliance to goundetected. Noncompliance with the grant agreement and the Equipment and Real Property Managementcompliance requirement could have resulted in the loss of federal funds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish internal controls to ensurecompliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-005Subject: COVID-19 - Education Stabilization Fund - ReportingFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Number: 84.425DFederal Award Number and Year (or Other Identifying Number): S425D200013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Other MattersINDIANA STATE BOARD OF ACCOUNTS22MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)Condition and ContextAn effective internal control system was not designed nor implemented at the School Corporationto ensure compliance with the requirements related to the grant agreement and the Reporting compliancerequirement.The School Corporation filed the four required Elementary and Secondary School EmergencyRelief (ESSER) annual data reports. However, the ESSER I, Year 1 and ESSER I, Year 2 reports werenot supported by the School Corporation's records. For each of the reports, two key line items wereselected for verification, none of the line items tested were supported by the School Corporation's records.For the ESSER I, Year 2 report the data included expenditures for two months beyond the reporting period.The lack of internal controls and noncompliance were applicable to the ESSER I grant during theaudit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.334 states in part:"Financial records, supporting documents, statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the dateof submission of the final expenditure report or, for Federal awards that are renewed quarterlyor 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 ofa 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 Federalaward or program in accordance with the reporting requirements set forth in ?? 200.328and 200.329. . . .(3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federalawards, authorizations, obligations, unobligated balances, assets, expenditures,income and interest and be supported by source documentation. . . ."INDIANA STATE BOARD OF ACCOUNTS23MONROE COUNTY COMMUNITY SCHOOL CORPORATIONSCHEDULE OF FINDINGS AND QUESTIONED COSTS(Continued)34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and formatthat assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out otherresponsibilities under the program."CauseManagement had not designed, nor implemented a system of internal controls that would haveensured compliance or that supporting documentation would have been maintained and available for auditrelated to the Reporting compliance requirement.EffectThe failure to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the Reporting compliance requirement. Noncompliancewith the grant agreement and the Reporting compliance requirement could result in the loss of future federalfunds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and available for audit and comply with the grantagreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Criteria: Uniform Guidance 2 CFR ? 200.303 requires the non-Federal entity to ?establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.?Condition: Second party reviews is a key internal control to assess the completeness and accuracy of the Medicaid and FNS case eligibility made by County staff. We selected forty second party reviews completed by the County for each program and noted that 2 cases for each program had errors that were identified by the reviewer with no subsequent correction made to case. So, it was total of 4 cases out of 80 cases. None of these errors were related to eligibility determination. These errors related todocumentation or required communications with the applicant.Questioned Costs: No questioned costs.Context: Of the second party reviews selected, corrections were not made to documentation 5% of thetime. These were not related to eligibility determination.Cause: The caseworker did not make corrections identified by the 2nd Party Review process thatrequired sending notices to the client or updating documentation in NCFAST. The 2nd Party Reviewprocess did not include follow-up to ensure corrections were made timely.Effect: The applicant may not receive important notifications from the County or the documentationmay be incomplete. Documentation should be complete and accurate.Identification of repeat finding: This is not a repeat finding.Recommendation: We would recommend the County review the 2nd Party Review process withsupervisors and case workers and the expectations related to correcting errors. The two errors thatwere uncorrected for the FNS program had to do with sending DSS-8569 to clients. Per the supervisor,this policy had changed during the year, so we would recommend having additional training on thispolicy.Views of Responsible Officials and Planned Corrective Actions: The County agrees with this findingand is taking coordinated effort and action. Refer to corrective action plan on subsequent page 17.
Criteria: Uniform Guidance 2 CFR ? 200.303 requires the non-Federal entity to ?establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.?Condition: Second party reviews is a key internal control to assess the completeness and accuracy of the Medicaid and FNS case eligibility made by County staff. We selected forty second party reviews completed by the County for each program and noted that 2 cases for each program had errors that were identified by the reviewer with no subsequent correction made to case. So, it was total of 4 cases out of 80 cases. None of these errors were related to eligibility determination. These errors related todocumentation or required communications with the applicant.Questioned Costs: No questioned costs.Context: Of the second party reviews selected, corrections were not made to documentation 5% of thetime. These were not related to eligibility determination.Cause: The caseworker did not make corrections identified by the 2nd Party Review process thatrequired sending notices to the client or updating documentation in NCFAST. The 2nd Party Reviewprocess did not include follow-up to ensure corrections were made timely.Effect: The applicant may not receive important notifications from the County or the documentationmay be incomplete. Documentation should be complete and accurate.Identification of repeat finding: This is not a repeat finding.Recommendation: We would recommend the County review the 2nd Party Review process withsupervisors and case workers and the expectations related to correcting errors. The two errors thatwere uncorrected for the FNS program had to do with sending DSS-8569 to clients. Per the supervisor,this policy had changed during the year, so we would recommend having additional training on thispolicy.Views of Responsible Officials and Planned Corrective Actions: The County agrees with this findingand is taking coordinated effort and action. Refer to corrective action plan on subsequent page 17.
Criteria: Uniform Guidance 2 CFR ? 200.303 requires the non-Federal entity to ?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.? Reasonable assurance includes the County documenting a key control was implemented.Condition: The main internal control over the LIHEAP programs are supervisory review of income verification and eligibility determination and documentation. There was no documentation of second party reviews for the LIHEAP programs. In addition, the staffing levels for this program is low related to the number of clients being served.Questioned Costs: No questioned costs.Context: The LIEAP Programs typically consist of a high volume of applications in a short period of time (approximately 3 months) with a required application turnaround period (2 to 10 business days for each application). Since the program is performed under Adult Services, these County staff were not familiar with NCFAST. Applications within the LIHEAP programs require the use of NCFAST for online verification, documentation, application entry, and eligibility determination. Due to these factors, supervisory review is critical. There are time pressures on the supervisory level due to high volume and short time period and limited staffing level. Although the Adult Services Supervisor currently performs random second party reviews of workers? eligibility determinations, it was not documented. Surry County processed 2,365 applications during fiscal year end June 30, 2022. We tested 40 applications and determined that there were 3 applications that were approved without proper income verification and 3 applications with technical errors that did not affect eligibility. This indicates concerns that there could be pervasive errors in determining eligibility.Cause: The County does not have a formal documented review process for this program. Review documentation was not retained.Effect: We were unable to verify whether the second party review process was functioning as designed.Identification of repeat finding: This is not a repeat finding.Recommendation: We recommend the implementation of a formal and documented review process to include an appropriate number of reviews given the volume of applications processed for given time period as appropriate.Views of Responsible Officials and Planned Corrective Actions: The County agrees with this finding and is taking coordinated effort and action. Refer to corrective action plan on subsequent page 16.
Criteria: Uniform Guidance 2 CFR ? 200.303 requires the non-Federal entity to ?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.? Reasonable assurance includes the County documenting a key control was implemented.Condition: The main internal control over the LIHEAP programs are supervisory review of income verification and eligibility determination and documentation. There was no documentation of second party reviews for the LIHEAP programs. In addition, the staffing levels for this program is low related to the number of clients being served.Questioned Costs: No questioned costs.Context: The LIEAP Programs typically consist of a high volume of applications in a short period of time (approximately 3 months) with a required application turnaround period (2 to 10 business days for each application). Since the program is performed under Adult Services, these County staff were not familiar with NCFAST. Applications within the LIHEAP programs require the use of NCFAST for online verification, documentation, application entry, and eligibility determination. Due to these factors, supervisory review is critical. There are time pressures on the supervisory level due to high volume and short time period and limited staffing level. Although the Adult Services Supervisor currently performs random second party reviews of workers? eligibility determinations, it was not documented. Surry County processed 2,365 applications during fiscal year end June 30, 2022. We tested 40 applications and determined that there were 3 applications that were approved without proper income verification and 3 applications with technical errors that did not affect eligibility. This indicates concerns that there could be pervasive errors in determining eligibility.Cause: The County does not have a formal documented review process for this program. Review documentation was not retained.Effect: We were unable to verify whether the second party review process was functioning as designed.Identification of repeat finding: This is not a repeat finding.Recommendation: We recommend the implementation of a formal and documented review process to include an appropriate number of reviews given the volume of applications processed for given time period as appropriate.Views of Responsible Officials and Planned Corrective Actions: The County agrees with this finding and is taking coordinated effort and action. Refer to corrective action plan on subsequent page 16.
Criteria: Uniform Guidance 2 CFR ? 200.303 requires the non-Federal entity to ?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.? Reasonable assurance includes the County documenting a key control was implemented.Condition: The main internal control over the LIHEAP programs are supervisory review of income verification and eligibility determination and documentation. There was no documentation of second party reviews for the LIHEAP programs. In addition, the staffing levels for this program is low related to the number of clients being served.Questioned Costs: No questioned costs.Context: The LIEAP Programs typically consist of a high volume of applications in a short period of time (approximately 3 months) with a required application turnaround period (2 to 10 business days for each application). Since the program is performed under Adult Services, these County staff were not familiar with NCFAST. Applications within the LIHEAP programs require the use of NCFAST for online verification, documentation, application entry, and eligibility determination. Due to these factors, supervisory review is critical. There are time pressures on the supervisory level due to high volume and short time period and limited staffing level. Although the Adult Services Supervisor currently performs random second party reviews of workers? eligibility determinations, it was not documented. Surry County processed 2,365 applications during fiscal year end June 30, 2022. We tested 40 applications and determined that there were 3 applications that were approved without proper income verification and 3 applications with technical errors that did not affect eligibility. This indicates concerns that there could be pervasive errors in determining eligibility.Cause: The County does not have a formal documented review process for this program. Review documentation was not retained.Effect: We were unable to verify whether the second party review process was functioning as designed.Identification of repeat finding: This is not a repeat finding.Recommendation: We recommend the implementation of a formal and documented review process to include an appropriate number of reviews given the volume of applications processed for given time period as appropriate.Views of Responsible Officials and Planned Corrective Actions: The County agrees with this finding and is taking coordinated effort and action. Refer to corrective action plan on subsequent page 16.
Criteria: Uniform Guidance 2 CFR ? 200.303 requires the non-Federal entity to ?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.? Reasonable assurance includes the County documenting a key control was implemented.Condition: The main internal control over the LIHEAP programs are supervisory review of income verification and eligibility determination and documentation. There was no documentation of second party reviews for the LIHEAP programs. In addition, the staffing levels for this program is low related to the number of clients being served.Questioned Costs: No questioned costs.Context: The LIEAP Programs typically consist of a high volume of applications in a short period of time (approximately 3 months) with a required application turnaround period (2 to 10 business days for each application). Since the program is performed under Adult Services, these County staff were not familiar with NCFAST. Applications within the LIHEAP programs require the use of NCFAST for online verification, documentation, application entry, and eligibility determination. Due to these factors, supervisory review is critical. There are time pressures on the supervisory level due to high volume and short time period and limited staffing level. Although the Adult Services Supervisor currently performs random second party reviews of workers? eligibility determinations, it was not documented. Surry County processed 2,365 applications during fiscal year end June 30, 2022. We tested 40 applications and determined that there were 3 applications that were approved without proper income verification and 3 applications with technical errors that did not affect eligibility. This indicates concerns that there could be pervasive errors in determining eligibility.Cause: The County does not have a formal documented review process for this program. Review documentation was not retained.Effect: We were unable to verify whether the second party review process was functioning as designed.Identification of repeat finding: This is not a repeat finding.Recommendation: We recommend the implementation of a formal and documented review process to include an appropriate number of reviews given the volume of applications processed for given time period as appropriate.Views of Responsible Officials and Planned Corrective Actions: The County agrees with this finding and is taking coordinated effort and action. Refer to corrective action plan on subsequent page 16.
Criteria: Uniform Guidance 2 CFR ? 200.303 requires the non-Federal entity to ?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.? Reasonable assurance includes the County documenting a key control was implemented.Condition: The main internal control over the LIHEAP programs are supervisory review of income verification and eligibility determination and documentation. There was no documentation of second party reviews for the LIHEAP programs. In addition, the staffing levels for this program is low related to the number of clients being served.Questioned Costs: No questioned costs.Context: The LIEAP Programs typically consist of a high volume of applications in a short period of time (approximately 3 months) with a required application turnaround period (2 to 10 business days for each application). Since the program is performed under Adult Services, these County staff were not familiar with NCFAST. Applications within the LIHEAP programs require the use of NCFAST for online verification, documentation, application entry, and eligibility determination. Due to these factors, supervisory review is critical. There are time pressures on the supervisory level due to high volume and short time period and limited staffing level. Although the Adult Services Supervisor currently performs random second party reviews of workers? eligibility determinations, it was not documented. Surry County processed 2,365 applications during fiscal year end June 30, 2022. We tested 40 applications and determined that there were 3 applications that were approved without proper income verification and 3 applications with technical errors that did not affect eligibility. This indicates concerns that there could be pervasive errors in determining eligibility.Cause: The County does not have a formal documented review process for this program. Review documentation was not retained.Effect: We were unable to verify whether the second party review process was functioning as designed.Identification of repeat finding: This is not a repeat finding.Recommendation: We recommend the implementation of a formal and documented review process to include an appropriate number of reviews given the volume of applications processed for given time period as appropriate.Views of Responsible Officials and Planned Corrective Actions: The County agrees with this finding and is taking coordinated effort and action. Refer to corrective action plan on subsequent page 16.
Criteria: Uniform Guidance 2 CFR ? 200.303 requires the non-Federal entity to ?establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.?Condition: Second party reviews is a key internal control to assess the completeness and accuracy of the Medicaid and FNS case eligibility made by County staff. We selected forty second party reviews completed by the County for each program and noted that 2 cases for each program had errors that were identified by the reviewer with no subsequent correction made to case. So, it was total of 4 cases out of 80 cases. None of these errors were related to eligibility determination. These errors related todocumentation or required communications with the applicant.Questioned Costs: No questioned costs.Context: Of the second party reviews selected, corrections were not made to documentation 5% of thetime. These were not related to eligibility determination.Cause: The caseworker did not make corrections identified by the 2nd Party Review process thatrequired sending notices to the client or updating documentation in NCFAST. The 2nd Party Reviewprocess did not include follow-up to ensure corrections were made timely.Effect: The applicant may not receive important notifications from the County or the documentationmay be incomplete. Documentation should be complete and accurate.Identification of repeat finding: This is not a repeat finding.Recommendation: We would recommend the County review the 2nd Party Review process withsupervisors and case workers and the expectations related to correcting errors. The two errors thatwere uncorrected for the FNS program had to do with sending DSS-8569 to clients. Per the supervisor,this policy had changed during the year, so we would recommend having additional training on thispolicy.Views of Responsible Officials and Planned Corrective Actions: The County agrees with this findingand is taking coordinated effort and action. Refer to corrective action plan on subsequent page 17.
Criteria: Uniform Guidance 2 CFR ? 200.303 requires the non-Federal entity to ?establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.?Condition: Second party reviews is a key internal control to assess the completeness and accuracy of the Medicaid and FNS case eligibility made by County staff. We selected forty second party reviews completed by the County for each program and noted that 2 cases for each program had errors that were identified by the reviewer with no subsequent correction made to case. So, it was total of 4 cases out of 80 cases. None of these errors were related to eligibility determination. These errors related todocumentation or required communications with the applicant.Questioned Costs: No questioned costs.Context: Of the second party reviews selected, corrections were not made to documentation 5% of thetime. These were not related to eligibility determination.Cause: The caseworker did not make corrections identified by the 2nd Party Review process thatrequired sending notices to the client or updating documentation in NCFAST. The 2nd Party Reviewprocess did not include follow-up to ensure corrections were made timely.Effect: The applicant may not receive important notifications from the County or the documentationmay be incomplete. Documentation should be complete and accurate.Identification of repeat finding: This is not a repeat finding.Recommendation: We would recommend the County review the 2nd Party Review process withsupervisors and case workers and the expectations related to correcting errors. The two errors thatwere uncorrected for the FNS program had to do with sending DSS-8569 to clients. Per the supervisor,this policy had changed during the year, so we would recommend having additional training on thispolicy.Views of Responsible Officials and Planned Corrective Actions: The County agrees with this findingand is taking coordinated effort and action. Refer to corrective action plan on subsequent page 17.
Criteria: Uniform Guidance 2 CFR ? 200.303 requires the non-Federal entity to ?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.? Reasonable assurance includes the County documenting a key control was implemented.Condition: The main internal control over the LIHEAP programs are supervisory review of income verification and eligibility determination and documentation. There was no documentation of second party reviews for the LIHEAP programs. In addition, the staffing levels for this program is low related to the number of clients being served.Questioned Costs: No questioned costs.Context: The LIEAP Programs typically consist of a high volume of applications in a short period of time (approximately 3 months) with a required application turnaround period (2 to 10 business days for each application). Since the program is performed under Adult Services, these County staff were not familiar with NCFAST. Applications within the LIHEAP programs require the use of NCFAST for online verification, documentation, application entry, and eligibility determination. Due to these factors, supervisory review is critical. There are time pressures on the supervisory level due to high volume and short time period and limited staffing level. Although the Adult Services Supervisor currently performs random second party reviews of workers? eligibility determinations, it was not documented. Surry County processed 2,365 applications during fiscal year end June 30, 2022. We tested 40 applications and determined that there were 3 applications that were approved without proper income verification and 3 applications with technical errors that did not affect eligibility. This indicates concerns that there could be pervasive errors in determining eligibility.Cause: The County does not have a formal documented review process for this program. Review documentation was not retained.Effect: We were unable to verify whether the second party review process was functioning as designed.Identification of repeat finding: This is not a repeat finding.Recommendation: We recommend the implementation of a formal and documented review process to include an appropriate number of reviews given the volume of applications processed for given time period as appropriate.Views of Responsible Officials and Planned Corrective Actions: The County agrees with this finding and is taking coordinated effort and action. Refer to corrective action plan on subsequent page 16.
Criteria: Uniform Guidance 2 CFR ? 200.303 requires the non-Federal entity to ?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.? Reasonable assurance includes the County documenting a key control was implemented.Condition: The main internal control over the LIHEAP programs are supervisory review of income verification and eligibility determination and documentation. There was no documentation of second party reviews for the LIHEAP programs. In addition, the staffing levels for this program is low related to the number of clients being served.Questioned Costs: No questioned costs.Context: The LIEAP Programs typically consist of a high volume of applications in a short period of time (approximately 3 months) with a required application turnaround period (2 to 10 business days for each application). Since the program is performed under Adult Services, these County staff were not familiar with NCFAST. Applications within the LIHEAP programs require the use of NCFAST for online verification, documentation, application entry, and eligibility determination. Due to these factors, supervisory review is critical. There are time pressures on the supervisory level due to high volume and short time period and limited staffing level. Although the Adult Services Supervisor currently performs random second party reviews of workers? eligibility determinations, it was not documented. Surry County processed 2,365 applications during fiscal year end June 30, 2022. We tested 40 applications and determined that there were 3 applications that were approved without proper income verification and 3 applications with technical errors that did not affect eligibility. This indicates concerns that there could be pervasive errors in determining eligibility.Cause: The County does not have a formal documented review process for this program. Review documentation was not retained.Effect: We were unable to verify whether the second party review process was functioning as designed.Identification of repeat finding: This is not a repeat finding.Recommendation: We recommend the implementation of a formal and documented review process to include an appropriate number of reviews given the volume of applications processed for given time period as appropriate.Views of Responsible Officials and Planned Corrective Actions: The County agrees with this finding and is taking coordinated effort and action. Refer to corrective action plan on subsequent page 16.
2022 ? 004: Special Tests and Provision ? Annual Report Card, High School Graduation RateFederal Agency: U.S. Department of EducationFederal Program Name: Title I Grants to Local Education AgenciesAssistance Listing Number: 84.010AFederal Award Identification Number and Year: S010A200014; S010A210014 - FY2020, FY2021Pass-Through Agency: Indiana Department of EducationPass-Through Number(s): S010A200014; S010A210014Award Period: FY2021, FY2022Type of Finding:? Significant Deficiency in Internal Control over Compliance? Other MattersCriteria or specific requirement: 2 CFR section 200.303 states in part:?The non-Federal entity must:(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in `Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the `Internal control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)??Condition: During our testing of the annual report card, it was noted that the School Corporation did not obtain and retain appropriate approval documentation for a student withdrawal from the regulatory cohort.Questioned costs: NoneContext: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions ? Annual Report Card, High School Graduation Rate documentation. For one of the eight individuals selected for testing, the supporting documentation was not complete.Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above.Effect: The failure to design and implement an effective internal control system enabled significant deficiency to go undetected.Repeat Finding: NoRecommendation: We recommend that the School Corporation's management review their policies and procedures surrounding federal grants and ensure that documentation is obtained and retained to ensure that all necessary compliance requirements are met.Views of responsible officials: There is no disagreement with the audit finding.
2022 ? 004: Special Tests and Provision ? Annual Report Card, High School Graduation RateFederal Agency: U.S. Department of EducationFederal Program Name: Title I Grants to Local Education AgenciesAssistance Listing Number: 84.010AFederal Award Identification Number and Year: S010A200014; S010A210014 - FY2020, FY2021Pass-Through Agency: Indiana Department of EducationPass-Through Number(s): S010A200014; S010A210014Award Period: FY2021, FY2022Type of Finding:? Significant Deficiency in Internal Control over Compliance? Other MattersCriteria or specific requirement: 2 CFR section 200.303 states in part:?The non-Federal entity must:(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in `Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the `Internal control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)??Condition: During our testing of the annual report card, it was noted that the School Corporation did not obtain and retain appropriate approval documentation for a student withdrawal from the regulatory cohort.Questioned costs: NoneContext: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions ? Annual Report Card, High School Graduation Rate documentation. For one of the eight individuals selected for testing, the supporting documentation was not complete.Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above.Effect: The failure to design and implement an effective internal control system enabled significant deficiency to go undetected.Repeat Finding: NoRecommendation: We recommend that the School Corporation's management review their policies and procedures surrounding federal grants and ensure that documentation is obtained and retained to ensure that all necessary compliance requirements are met.Views of responsible officials: There is no disagreement with the audit finding.
2022 ? 004: Special Tests and Provision ? Annual Report Card, High School Graduation RateFederal Agency: U.S. Department of EducationFederal Program Name: Title I Grants to Local Education AgenciesAssistance Listing Number: 84.010AFederal Award Identification Number and Year: S010A200014; S010A210014 - FY2020, FY2021Pass-Through Agency: Indiana Department of EducationPass-Through Number(s): S010A200014; S010A210014Award Period: FY2021, FY2022Type of Finding:? Significant Deficiency in Internal Control over Compliance? Other MattersCriteria or specific requirement: 2 CFR section 200.303 states in part:?The non-Federal entity must:(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in `Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the `Internal control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)??Condition: During our testing of the annual report card, it was noted that the School Corporation did not obtain and retain appropriate approval documentation for a student withdrawal from the regulatory cohort.Questioned costs: NoneContext: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions ? Annual Report Card, High School Graduation Rate documentation. For one of the eight individuals selected for testing, the supporting documentation was not complete.Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above.Effect: The failure to design and implement an effective internal control system enabled significant deficiency to go undetected.Repeat Finding: NoRecommendation: We recommend that the School Corporation's management review their policies and procedures surrounding federal grants and ensure that documentation is obtained and retained to ensure that all necessary compliance requirements are met.Views of responsible officials: There is no disagreement with the audit finding.
2022 ? 004: Special Tests and Provision ? Annual Report Card, High School Graduation RateFederal Agency: U.S. Department of EducationFederal Program Name: Title I Grants to Local Education AgenciesAssistance Listing Number: 84.010AFederal Award Identification Number and Year: S010A200014; S010A210014 - FY2020, FY2021Pass-Through Agency: Indiana Department of EducationPass-Through Number(s): S010A200014; S010A210014Award Period: FY2021, FY2022Type of Finding:? Significant Deficiency in Internal Control over Compliance? Other MattersCriteria or specific requirement: 2 CFR section 200.303 states in part:?The non-Federal entity must:(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in `Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the `Internal control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)??Condition: During our testing of the annual report card, it was noted that the School Corporation did not obtain and retain appropriate approval documentation for a student withdrawal from the regulatory cohort.Questioned costs: NoneContext: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions ? Annual Report Card, High School Graduation Rate documentation. For one of the eight individuals selected for testing, the supporting documentation was not complete.Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above.Effect: The failure to design and implement an effective internal control system enabled significant deficiency to go undetected.Repeat Finding: NoRecommendation: We recommend that the School Corporation's management review their policies and procedures surrounding federal grants and ensure that documentation is obtained and retained to ensure that all necessary compliance requirements are met.Views of responsible officials: There is no disagreement with the audit finding.
2022 ? 002: Prevailing Wage Rate RequirementsFederal Agency: U.S. Department of EducationFederal Program Name: COVID-19: Elementary and Secondary School Emergency Relief FundAssistance Listing Number: 84.425DFederal Award Identification Number and Year: S425D200013 (CARES); S425D210013 (ESSER II (CRRSA))- FY2020, FY2021Pass-Through Agency: Indiana Department of EducationPass-Through Number(s): S425D200013 (CARES); S425D210013 (ESSER II (CRRSA))Award Period: FY2021, FY2022Type of Finding:? Significant Deficiency in Internal Control over Compliance? Other MattersCriteria or specific requirement: CFR section 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) "29 CFR 5.5 states in part:a.The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of$2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in ?5.1, the following clauses?(1) Minimum wages.(i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics?(3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency).2 CFR 200 Appendix II states in part:In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . .(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, ?Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction?). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week ?Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions ? Wage Rate Requirements compliance requirements.Questioned costs: None.Context: During the process of obtaining an understanding of internal controls and processing of construction contracts and testing of construction contracts, we noted two of the 5 contracts tested did not include the prevailing wage section in the executed contract and no certified payrolls were obtained.Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. The School Corporation did not have an internal control in place to review the underlying expenditures to determine if they were allowable in accordance with federal requirements.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 Special Tests and Provisions ? Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation.Repeat Finding: NoRecommendation: We recommend the School Corporation implement a formal process to ensure the required weekly payroll reports certifications are collected and reviewed to ensure compliance with the wage rate requirements.Views of responsible officials: There is no disagreement with the audit finding.
2022 ? 002: Prevailing Wage Rate RequirementsFederal Agency: U.S. Department of EducationFederal Program Name: COVID-19: Elementary and Secondary School Emergency Relief FundAssistance Listing Number: 84.425DFederal Award Identification Number and Year: S425D200013 (CARES); S425D210013 (ESSER II (CRRSA))- FY2020, FY2021Pass-Through Agency: Indiana Department of EducationPass-Through Number(s): S425D200013 (CARES); S425D210013 (ESSER II (CRRSA))Award Period: FY2021, FY2022Type of Finding:? Significant Deficiency in Internal Control over Compliance? Other MattersCriteria or specific requirement: CFR section 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) "29 CFR 5.5 states in part:a.The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of$2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in ?5.1, the following clauses?(1) Minimum wages.(i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics?(3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency).2 CFR 200 Appendix II states in part:In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . .(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, ?Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction?). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week ?Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions ? Wage Rate Requirements compliance requirements.Questioned costs: None.Context: During the process of obtaining an understanding of internal controls and processing of construction contracts and testing of construction contracts, we noted two of the 5 contracts tested did not include the prevailing wage section in the executed contract and no certified payrolls were obtained.Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. The School Corporation did not have an internal control in place to review the underlying expenditures to determine if they were allowable in accordance with federal requirements.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 Special Tests and Provisions ? Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation.Repeat Finding: NoRecommendation: We recommend the School Corporation implement a formal process to ensure the required weekly payroll reports certifications are collected and reviewed to ensure compliance with the wage rate requirements.Views of responsible officials: There is no disagreement with the audit finding.
2022 ? 002: Prevailing Wage Rate RequirementsFederal Agency: U.S. Department of EducationFederal Program Name: COVID-19: Elementary and Secondary School Emergency Relief FundAssistance Listing Number: 84.425DFederal Award Identification Number and Year: S425D200013 (CARES); S425D210013 (ESSER II (CRRSA))- FY2020, FY2021Pass-Through Agency: Indiana Department of EducationPass-Through Number(s): S425D200013 (CARES); S425D210013 (ESSER II (CRRSA))Award Period: FY2021, FY2022Type of Finding:? Significant Deficiency in Internal Control over Compliance? Other MattersCriteria or specific requirement: CFR section 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) "29 CFR 5.5 states in part:a.The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of$2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in ?5.1, the following clauses?(1) Minimum wages.(i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics?(3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency).2 CFR 200 Appendix II states in part:In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . .(D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, ?Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction?). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week ?Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions ? Wage Rate Requirements compliance requirements.Questioned costs: None.Context: During the process of obtaining an understanding of internal controls and processing of construction contracts and testing of construction contracts, we noted two of the 5 contracts tested did not include the prevailing wage section in the executed contract and no certified payrolls were obtained.Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. The School Corporation did not have an internal control in place to review the underlying expenditures to determine if they were allowable in accordance with federal requirements.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 Special Tests and Provisions ? Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation.Repeat Finding: NoRecommendation: We recommend the School Corporation implement a formal process to ensure the required weekly payroll reports certifications are collected and reviewed to ensure compliance with the wage rate requirements.Views of responsible officials: There is no disagreement with the audit finding.
2022 ? 003: Internal Control Over Compliance Related to ReportingFederal Agency: U.S. Department of EducationFederal Program Name: COVID-19: Elementary and Secondary School Emergency Relief FundAssistance Listing Number: 84.425DFederal Award Identification Number and Year: S425D200013 (CARES); S425D210013 (ESSER II (CRRSA))- FY2020, FY2021Pass-Through Agency: Indiana Department of EducationPass-Through Number(s): S425D200013 (CARES); S425D210013 (ESSER II (CRRSA))Award Period: FY2021, FY2022Type of Finding:? Material Weakness in Internal Control over ComplianceCriteria or specific requirement: 2 CFR section 200.303 states in part:?The non-Federal entity must:(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in `Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the `Internal control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)??Condition: During our testing of the reporting process, we noted that the annual reports submitted did not have documentation retained of review and approval prior to submission.Questioned costs: NoneContext: A control system to prevent and detect errors in the reporting process was not created at the time the reports were filed.Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above.Effect: The failure to design and implement an effective internal control system enabled material noncompliance to go undetected.Repeat Finding: NoRecommendation: We recommend that the School Corporation's management review their policies and procedures surrounding federal grants and ensure a review process is in place to ensure that all necessary compliance requirements are met.Views of responsible officials: There is no disagreement with the audit finding
2022 ? 003: Internal Control Over Compliance Related to ReportingFederal Agency: U.S. Department of EducationFederal Program Name: COVID-19: Elementary and Secondary School Emergency Relief FundAssistance Listing Number: 84.425DFederal Award Identification Number and Year: S425D200013 (CARES); S425D210013 (ESSER II (CRRSA))- FY2020, FY2021Pass-Through Agency: Indiana Department of EducationPass-Through Number(s): S425D200013 (CARES); S425D210013 (ESSER II (CRRSA))Award Period: FY2021, FY2022Type of Finding:? Material Weakness in Internal Control over ComplianceCriteria or specific requirement: 2 CFR section 200.303 states in part:?The non-Federal entity must:(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in `Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the `Internal control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)??Condition: During our testing of the reporting process, we noted that the annual reports submitted did not have documentation retained of review and approval prior to submission.Questioned costs: NoneContext: A control system to prevent and detect errors in the reporting process was not created at the time the reports were filed.Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above.Effect: The failure to design and implement an effective internal control system enabled material noncompliance to go undetected.Repeat Finding: NoRecommendation: We recommend that the School Corporation's management review their policies and procedures surrounding federal grants and ensure a review process is in place to ensure that all necessary compliance requirements are met.Views of responsible officials: There is no disagreement with the audit finding
2022 ? 003: Internal Control Over Compliance Related to ReportingFederal Agency: U.S. Department of EducationFederal Program Name: COVID-19: Elementary and Secondary School Emergency Relief FundAssistance Listing Number: 84.425DFederal Award Identification Number and Year: S425D200013 (CARES); S425D210013 (ESSER II (CRRSA))- FY2020, FY2021Pass-Through Agency: Indiana Department of EducationPass-Through Number(s): S425D200013 (CARES); S425D210013 (ESSER II (CRRSA))Award Period: FY2021, FY2022Type of Finding:? Material Weakness in Internal Control over ComplianceCriteria or specific requirement: 2 CFR section 200.303 states in part:?The non-Federal entity must:(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in `Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the `Internal control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)??Condition: During our testing of the reporting process, we noted that the annual reports submitted did not have documentation retained of review and approval prior to submission.Questioned costs: NoneContext: A control system to prevent and detect errors in the reporting process was not created at the time the reports were filed.Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above.Effect: The failure to design and implement an effective internal control system enabled material noncompliance to go undetected.Repeat Finding: NoRecommendation: We recommend that the School Corporation's management review their policies and procedures surrounding federal grants and ensure a review process is in place to ensure that all necessary compliance requirements are met.Views of responsible officials: There is no disagreement with the audit finding
Federal Awarding Agency: United States Department of Agriculture (USDA)Impact: Material Weakness, Material NoncomplianceAL Number and Title: 10.551, 10.561 Supplemental Nutrition Assistance Program (SNAP) ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Allowable Costs/Costs PrinciplesSpecial Tests and ProvisionsCondition:The Division of Public Assistance (DPA) Eligibility Information System (EIS) did not automatically cut off households from receiving SNAP benefits at the end of the certification period during FY 22.Context:A state must certify each eligible household for a definite period of time. Alaska households are certified for a six-month period. The first month of the certification period begins in the first month for which the household is determined eligible to participate. The State is required by federal law to ensure EIS automatically cuts off participation for households that have not been recertified at the end of the certification period.In response to the COVID-19 disaster, USDA?s Food and Nutrition Service (FNS) issued COVID-19 waivers and flexibilities, which included extending SNAP certification periods. In a letter dated April 30, 2021, FNS allowed states to automatically extend benefit certification periods for up to six months. In a subsequent letter dated December 8, 2021, FNS clarified the April 30, 2021, letter directing that state agencies may only extend certification periods for up to six months from the initial expiration date assigned at the last certification or recertification. Consecutive certifications, or back-to-back six-month extensions were not allowable, as it may exceed FNS?s waiver authority provided by the Families First Coronavirus Act and reduce the opportunity for a state to obtain a full understanding of a household?s circumstances. Furthermore, the FNS letter made various recommendations for reducing the backlogs that may occur when states provide certification period extensions.Cause:The EIS control to automatically cut off households from receiving SNAP benefits at the end of the certification period was disabled based on DPA management?s misinterpretation of FNS guidance regarding certification period extensions. DPA management?s erroneous interpretation and lack of response to FNS?s clarifying guidance led eligibility technicians to not perform recertifications of SNAP households in FY 22.Criteria:Title 7 CFR 272.10(b) requires the State to use an automated data processing system for SNAP. The system is to be used to determine eligibility and calculate benefits or validate eligibility workers? calculations by processing and storing all casefile information necessary for the eligibility determination and benefit computation including, but not limited to, all household members' names, addresses, dates of birth, social security numbers, individual household members' earned and unearned income by source, deductions, resources, and household size. Also, the system must be used to redetermine or revalidate eligibility and benefits based on notices of change in households' circumstances.Title 7 CFR 273.10(f) requires the State to certify each eligible household for a definite period of time. Alaska households are certified for a six-month period per Alaska?s approved SNAP Plan of Operation.Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.USDA FNS SNAP guidance, issued December 8, 2021, titled, Extension of SNAP COVID-19 Administrative flexibilities January 2022 and Beyond, provided that States may only extend certification periods for up to six months from the initial expiration date assigned at the last certification or recertification. The guidance reiterated that the State should not extend certification periods consecutively, as it reduces the opportunities the State has to obtain a full understanding of a household?s circumstances and make necessary adjustments.Effect:The lack of periodic eligibility recertifications increased the risk that ineligible recipients received SNAP benefits. State agencies are responsible for preventing loss of federal funds in the certification of households. If FNS makes a determination the State was negligent in the certification of households, FNS is authorized to bill the State for an amount equal to the benefits issued as a result of the negligence. Furthermore, the utilization of broad-based certification period extensions may result in significant increases in case processing backlogs once the extensions expire and the State transitions back to regular operations.Questioned Costs:AL 10.551: IndeterminateRecommendation:DOH?s commissioner and DPA's director should reactivate the system control that automatically cuts off beneficiaries outside of the certification period and take timely action to recertify SNAP recipients.Views of Responsible Officials:Management agrees with the finding.[See Schedule of Findings and Questioned Costs for footnote.]
Federal Awarding Agency: USDAImpact: Significant Deficiency, NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesFederal Awarding Agency: USDAImpact: Material Weakness, Material NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Special Tests and ProvisionsCondition:Testing of 51 SNAP recipient cases to verify the accuracy of EIS benefit calculations found five (10 percent) were incorrect. Testing of 26 SNAP recipient cases to verify the adequacy of case information stored in EIS and the DHSS?s document management system, ILINX, found 11 (42 percent) had insufficient information in ILINX or inaccurate data input into EIS, and four (15 percent) recipients? applications or report of changes were not processed within federally required timeframes.Context:The State is required to ensure only eligible households receive supplemental nutrition assistance. Benefit amounts are calculated based on household size, income, and other financial resources of all qualifying members of a household less specific allowable deductions. The State is required to ensure its automated data processing systems: accurately and completely process and store all case file information for eligibility determinations and benefit calculations; automatically cuts off households at the end of a certification period unless recertified; and provides the data necessary to meet federal issuance and reconciliation reporting requirements.DPA eligibility technicians (ET) review applications, verify income and resources, and make a determination whether a household is eligible to receive benefits. ETs obtain and upload source documentation into ILINX, and manually update EIS with information from source documentation. As part of determining benefit eligibility, the State is required to coordinate the exchange of data with other agencies such as the federal Social Security Administration, State employment security agency, and current employers to verify the household?s identity, income, resources, and other eligibility criteria. ET actions taken, verifications performed, and contacts made are recorded using the EIS?s case note screen. Source documentation supporting the eligibility determination is retained in ILINX. To help ensure the accuracy and completeness of EIS information, DPA conducts training and requires supervisors to perform quality control reviews.The EIS legacy system relies on manual processes to adequately support the eligibility and benefit determinations, and ensure the determinations are accurate. The audit identified multiple errors including:? Five recipients? income or financial resources were not adequately supported or verified by the ET as evidenced by information stored in ILINX.? Six recipients? EIS-calculated payments were not adequately supported by case file information stored in ILINX.? Four recipients? applications and/or report of changes were not processed within the allowable time period.? Five recipients received incorrect benefit amounts.Cause:Human error by the ETs during application processing was the primary cause of the deficiencies. According to DPA management, pandemic related monthly emergency allotment benefits added to each recipient?s EIS-calculated benefit required extensive manual inputs, which increased workloads and impacted ETs? ability to accurately process applications. Furthermore, due to competing priorities, no quality control reviews were performed during FY 22.Criteria:Title 7 CFR 272.10(b) requires the State to use an automated data processing system for SNAP. The system is to be used to determine eligibility and calculate benefits or validate eligibility workers? calculations by processing and storing all casefile information necessary for the eligibility determination and benefit computation including, but not limited to, all household members' names, addresses, dates of birth, social security numbers, individual household members' earned and unearned income by source, deductions, resources, and household size. Also, the system must be used to redetermine or revalidate eligibility and benefits based on notices of change in households' circumstances.Title 7 CFR 272.8(a)(1) requires the State maintain and use an income and eligibility verification system to request wage and benefit information from various agencies and use that information in verifying eligibility for and the amount of SNAP benefits due to eligible households.Title 7 CFR 273.2 (f)(6) requires that case files be documented to support eligibility, ineligibility, and benefit level determinations. Documentation shall be in sufficient detail to permit a reviewer to determine the reasonableness and accuracy of the determination.Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Effect:The accuracy of SNAP benefit calculations is reliant on the case file information entered into and stored in DPA?s automated data processing systems. Inadequate or unsupported case file information increases the risk of incorrect or ineligible benefits. The deficiencies resulted in three SNAP recipients receiving incorrect benefits totaling $2,636 in overpayments and two recipients with $702 in underpayments.Questioned Costs:AL 10.551: $2,636Recommendation:DPA?s director should increase staff training and quality control reviews to help ensure procedures are followed for calculating benefits and retaining SNAP documentation, including the documentation to support compliance with verification of income through required data exchanges.Views of Responsible Officials:Management agrees with the finding.[See Schedule of Findings and Questioned Costs for footnote.]
Federal Awarding Agency: USDAImpact: Significant Deficiency, NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesFederal Awarding Agency: USDAImpact: Material Weakness, Material NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Special Tests and ProvisionsCondition:Testing of 51 SNAP recipient cases to verify the accuracy of EIS benefit calculations found five (10 percent) were incorrect. Testing of 26 SNAP recipient cases to verify the adequacy of case information stored in EIS and the DHSS?s document management system, ILINX, found 11 (42 percent) had insufficient information in ILINX or inaccurate data input into EIS, and four (15 percent) recipients? applications or report of changes were not processed within federally required timeframes.Context:The State is required to ensure only eligible households receive supplemental nutrition assistance. Benefit amounts are calculated based on household size, income, and other financial resources of all qualifying members of a household less specific allowable deductions. The State is required to ensure its automated data processing systems: accurately and completely process and store all case file information for eligibility determinations and benefit calculations; automatically cuts off households at the end of a certification period unless recertified; and provides the data necessary to meet federal issuance and reconciliation reporting requirements.DPA eligibility technicians (ET) review applications, verify income and resources, and make a determination whether a household is eligible to receive benefits. ETs obtain and upload source documentation into ILINX, and manually update EIS with information from source documentation. As part of determining benefit eligibility, the State is required to coordinate the exchange of data with other agencies such as the federal Social Security Administration, State employment security agency, and current employers to verify the household?s identity, income, resources, and other eligibility criteria. ET actions taken, verifications performed, and contacts made are recorded using the EIS?s case note screen. Source documentation supporting the eligibility determination is retained in ILINX. To help ensure the accuracy and completeness of EIS information, DPA conducts training and requires supervisors to perform quality control reviews.The EIS legacy system relies on manual processes to adequately support the eligibility and benefit determinations, and ensure the determinations are accurate. The audit identified multiple errors including:? Five recipients? income or financial resources were not adequately supported or verified by the ET as evidenced by information stored in ILINX.? Six recipients? EIS-calculated payments were not adequately supported by case file information stored in ILINX.? Four recipients? applications and/or report of changes were not processed within the allowable time period.? Five recipients received incorrect benefit amounts.Cause:Human error by the ETs during application processing was the primary cause of the deficiencies. According to DPA management, pandemic related monthly emergency allotment benefits added to each recipient?s EIS-calculated benefit required extensive manual inputs, which increased workloads and impacted ETs? ability to accurately process applications. Furthermore, due to competing priorities, no quality control reviews were performed during FY 22.Criteria:Title 7 CFR 272.10(b) requires the State to use an automated data processing system for SNAP. The system is to be used to determine eligibility and calculate benefits or validate eligibility workers? calculations by processing and storing all casefile information necessary for the eligibility determination and benefit computation including, but not limited to, all household members' names, addresses, dates of birth, social security numbers, individual household members' earned and unearned income by source, deductions, resources, and household size. Also, the system must be used to redetermine or revalidate eligibility and benefits based on notices of change in households' circumstances.Title 7 CFR 272.8(a)(1) requires the State maintain and use an income and eligibility verification system to request wage and benefit information from various agencies and use that information in verifying eligibility for and the amount of SNAP benefits due to eligible households.Title 7 CFR 273.2 (f)(6) requires that case files be documented to support eligibility, ineligibility, and benefit level determinations. Documentation shall be in sufficient detail to permit a reviewer to determine the reasonableness and accuracy of the determination.Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Effect:The accuracy of SNAP benefit calculations is reliant on the case file information entered into and stored in DPA?s automated data processing systems. Inadequate or unsupported case file information increases the risk of incorrect or ineligible benefits. The deficiencies resulted in three SNAP recipients receiving incorrect benefits totaling $2,636 in overpayments and two recipients with $702 in underpayments.Questioned Costs:AL 10.551: $2,636Recommendation:DPA?s director should increase staff training and quality control reviews to help ensure procedures are followed for calculating benefits and retaining SNAP documentation, including the documentation to support compliance with verification of income through required data exchanges.Views of Responsible Officials:Management agrees with the finding.[See Schedule of Findings and Questioned Costs for footnote.]
Federal Awarding Agency: United States Department of Agriculture (USDA)Impact: Material Weakness, Material NoncomplianceAL Number and Title: 10.551, 10.561 Supplemental Nutrition Assistance Program (SNAP) ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Allowable Costs/Costs PrinciplesSpecial Tests and ProvisionsCondition:The Division of Public Assistance (DPA) Eligibility Information System (EIS) did not automatically cut off households from receiving SNAP benefits at the end of the certification period during FY 22.Context:A state must certify each eligible household for a definite period of time. Alaska households are certified for a six-month period. The first month of the certification period begins in the first month for which the household is determined eligible to participate. The State is required by federal law to ensure EIS automatically cuts off participation for households that have not been recertified at the end of the certification period.In response to the COVID-19 disaster, USDA?s Food and Nutrition Service (FNS) issued COVID-19 waivers and flexibilities, which included extending SNAP certification periods. In a letter dated April 30, 2021, FNS allowed states to automatically extend benefit certification periods for up to six months. In a subsequent letter dated December 8, 2021, FNS clarified the April 30, 2021, letter directing that state agencies may only extend certification periods for up to six months from the initial expiration date assigned at the last certification or recertification. Consecutive certifications, or back-to-back six-month extensions were not allowable, as it may exceed FNS?s waiver authority provided by the Families First Coronavirus Act and reduce the opportunity for a state to obtain a full understanding of a household?s circumstances. Furthermore, the FNS letter made various recommendations for reducing the backlogs that may occur when states provide certification period extensions.Cause:The EIS control to automatically cut off households from receiving SNAP benefits at the end of the certification period was disabled based on DPA management?s misinterpretation of FNS guidance regarding certification period extensions. DPA management?s erroneous interpretation and lack of response to FNS?s clarifying guidance led eligibility technicians to not perform recertifications of SNAP households in FY 22.Criteria:Title 7 CFR 272.10(b) requires the State to use an automated data processing system for SNAP. The system is to be used to determine eligibility and calculate benefits or validate eligibility workers? calculations by processing and storing all casefile information necessary for the eligibility determination and benefit computation including, but not limited to, all household members' names, addresses, dates of birth, social security numbers, individual household members' earned and unearned income by source, deductions, resources, and household size. Also, the system must be used to redetermine or revalidate eligibility and benefits based on notices of change in households' circumstances.Title 7 CFR 273.10(f) requires the State to certify each eligible household for a definite period of time. Alaska households are certified for a six-month period per Alaska?s approved SNAP Plan of Operation.Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.USDA FNS SNAP guidance, issued December 8, 2021, titled, Extension of SNAP COVID-19 Administrative flexibilities January 2022 and Beyond, provided that States may only extend certification periods for up to six months from the initial expiration date assigned at the last certification or recertification. The guidance reiterated that the State should not extend certification periods consecutively, as it reduces the opportunities the State has to obtain a full understanding of a household?s circumstances and make necessary adjustments.Effect:The lack of periodic eligibility recertifications increased the risk that ineligible recipients received SNAP benefits. State agencies are responsible for preventing loss of federal funds in the certification of households. If FNS makes a determination the State was negligent in the certification of households, FNS is authorized to bill the State for an amount equal to the benefits issued as a result of the negligence. Furthermore, the utilization of broad-based certification period extensions may result in significant increases in case processing backlogs once the extensions expire and the State transitions back to regular operations.Questioned Costs:AL 10.551: IndeterminateRecommendation:DOH?s commissioner and DPA's director should reactivate the system control that automatically cuts off beneficiaries outside of the certification period and take timely action to recertify SNAP recipients.Views of Responsible Officials:Management agrees with the finding.[See Schedule of Findings and Questioned Costs for footnote.]
Federal Awarding Agency: USDAImpact: Significant Deficiency, NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesFederal Awarding Agency: USDAImpact: Material Weakness, Material NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Special Tests and ProvisionsCondition:Testing of 51 SNAP recipient cases to verify the accuracy of EIS benefit calculations found five (10 percent) were incorrect. Testing of 26 SNAP recipient cases to verify the adequacy of case information stored in EIS and the DHSS?s document management system, ILINX, found 11 (42 percent) had insufficient information in ILINX or inaccurate data input into EIS, and four (15 percent) recipients? applications or report of changes were not processed within federally required timeframes.Context:The State is required to ensure only eligible households receive supplemental nutrition assistance. Benefit amounts are calculated based on household size, income, and other financial resources of all qualifying members of a household less specific allowable deductions. The State is required to ensure its automated data processing systems: accurately and completely process and store all case file information for eligibility determinations and benefit calculations; automatically cuts off households at the end of a certification period unless recertified; and provides the data necessary to meet federal issuance and reconciliation reporting requirements.DPA eligibility technicians (ET) review applications, verify income and resources, and make a determination whether a household is eligible to receive benefits. ETs obtain and upload source documentation into ILINX, and manually update EIS with information from source documentation. As part of determining benefit eligibility, the State is required to coordinate the exchange of data with other agencies such as the federal Social Security Administration, State employment security agency, and current employers to verify the household?s identity, income, resources, and other eligibility criteria. ET actions taken, verifications performed, and contacts made are recorded using the EIS?s case note screen. Source documentation supporting the eligibility determination is retained in ILINX. To help ensure the accuracy and completeness of EIS information, DPA conducts training and requires supervisors to perform quality control reviews.The EIS legacy system relies on manual processes to adequately support the eligibility and benefit determinations, and ensure the determinations are accurate. The audit identified multiple errors including:? Five recipients? income or financial resources were not adequately supported or verified by the ET as evidenced by information stored in ILINX.? Six recipients? EIS-calculated payments were not adequately supported by case file information stored in ILINX.? Four recipients? applications and/or report of changes were not processed within the allowable time period.? Five recipients received incorrect benefit amounts.Cause:Human error by the ETs during application processing was the primary cause of the deficiencies. According to DPA management, pandemic related monthly emergency allotment benefits added to each recipient?s EIS-calculated benefit required extensive manual inputs, which increased workloads and impacted ETs? ability to accurately process applications. Furthermore, due to competing priorities, no quality control reviews were performed during FY 22.Criteria:Title 7 CFR 272.10(b) requires the State to use an automated data processing system for SNAP. The system is to be used to determine eligibility and calculate benefits or validate eligibility workers? calculations by processing and storing all casefile information necessary for the eligibility determination and benefit computation including, but not limited to, all household members' names, addresses, dates of birth, social security numbers, individual household members' earned and unearned income by source, deductions, resources, and household size. Also, the system must be used to redetermine or revalidate eligibility and benefits based on notices of change in households' circumstances.Title 7 CFR 272.8(a)(1) requires the State maintain and use an income and eligibility verification system to request wage and benefit information from various agencies and use that information in verifying eligibility for and the amount of SNAP benefits due to eligible households.Title 7 CFR 273.2 (f)(6) requires that case files be documented to support eligibility, ineligibility, and benefit level determinations. Documentation shall be in sufficient detail to permit a reviewer to determine the reasonableness and accuracy of the determination.Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Effect:The accuracy of SNAP benefit calculations is reliant on the case file information entered into and stored in DPA?s automated data processing systems. Inadequate or unsupported case file information increases the risk of incorrect or ineligible benefits. The deficiencies resulted in three SNAP recipients receiving incorrect benefits totaling $2,636 in overpayments and two recipients with $702 in underpayments.Questioned Costs:AL 10.551: $2,636Recommendation:DPA?s director should increase staff training and quality control reviews to help ensure procedures are followed for calculating benefits and retaining SNAP documentation, including the documentation to support compliance with verification of income through required data exchanges.Views of Responsible Officials:Management agrees with the finding.[See Schedule of Findings and Questioned Costs for footnote.]
Federal Awarding Agency: USDAImpact: Significant Deficiency, NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesFederal Awarding Agency: USDAImpact: Material Weakness, Material NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Special Tests and ProvisionsCondition:Testing of 51 SNAP recipient cases to verify the accuracy of EIS benefit calculations found five (10 percent) were incorrect. Testing of 26 SNAP recipient cases to verify the adequacy of case information stored in EIS and the DHSS?s document management system, ILINX, found 11 (42 percent) had insufficient information in ILINX or inaccurate data input into EIS, and four (15 percent) recipients? applications or report of changes were not processed within federally required timeframes.Context:The State is required to ensure only eligible households receive supplemental nutrition assistance. Benefit amounts are calculated based on household size, income, and other financial resources of all qualifying members of a household less specific allowable deductions. The State is required to ensure its automated data processing systems: accurately and completely process and store all case file information for eligibility determinations and benefit calculations; automatically cuts off households at the end of a certification period unless recertified; and provides the data necessary to meet federal issuance and reconciliation reporting requirements.DPA eligibility technicians (ET) review applications, verify income and resources, and make a determination whether a household is eligible to receive benefits. ETs obtain and upload source documentation into ILINX, and manually update EIS with information from source documentation. As part of determining benefit eligibility, the State is required to coordinate the exchange of data with other agencies such as the federal Social Security Administration, State employment security agency, and current employers to verify the household?s identity, income, resources, and other eligibility criteria. ET actions taken, verifications performed, and contacts made are recorded using the EIS?s case note screen. Source documentation supporting the eligibility determination is retained in ILINX. To help ensure the accuracy and completeness of EIS information, DPA conducts training and requires supervisors to perform quality control reviews.The EIS legacy system relies on manual processes to adequately support the eligibility and benefit determinations, and ensure the determinations are accurate. The audit identified multiple errors including:? Five recipients? income or financial resources were not adequately supported or verified by the ET as evidenced by information stored in ILINX.? Six recipients? EIS-calculated payments were not adequately supported by case file information stored in ILINX.? Four recipients? applications and/or report of changes were not processed within the allowable time period.? Five recipients received incorrect benefit amounts.Cause:Human error by the ETs during application processing was the primary cause of the deficiencies. According to DPA management, pandemic related monthly emergency allotment benefits added to each recipient?s EIS-calculated benefit required extensive manual inputs, which increased workloads and impacted ETs? ability to accurately process applications. Furthermore, due to competing priorities, no quality control reviews were performed during FY 22.Criteria:Title 7 CFR 272.10(b) requires the State to use an automated data processing system for SNAP. The system is to be used to determine eligibility and calculate benefits or validate eligibility workers? calculations by processing and storing all casefile information necessary for the eligibility determination and benefit computation including, but not limited to, all household members' names, addresses, dates of birth, social security numbers, individual household members' earned and unearned income by source, deductions, resources, and household size. Also, the system must be used to redetermine or revalidate eligibility and benefits based on notices of change in households' circumstances.Title 7 CFR 272.8(a)(1) requires the State maintain and use an income and eligibility verification system to request wage and benefit information from various agencies and use that information in verifying eligibility for and the amount of SNAP benefits due to eligible households.Title 7 CFR 273.2 (f)(6) requires that case files be documented to support eligibility, ineligibility, and benefit level determinations. Documentation shall be in sufficient detail to permit a reviewer to determine the reasonableness and accuracy of the determination.Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Effect:The accuracy of SNAP benefit calculations is reliant on the case file information entered into and stored in DPA?s automated data processing systems. Inadequate or unsupported case file information increases the risk of incorrect or ineligible benefits. The deficiencies resulted in three SNAP recipients receiving incorrect benefits totaling $2,636 in overpayments and two recipients with $702 in underpayments.Questioned Costs:AL 10.551: $2,636Recommendation:DPA?s director should increase staff training and quality control reviews to help ensure procedures are followed for calculating benefits and retaining SNAP documentation, including the documentation to support compliance with verification of income through required data exchanges.Views of Responsible Officials:Management agrees with the finding.[See Schedule of Findings and Questioned Costs for footnote.]
Federal Awarding Agency: USTreasuryImpact: Significant Deficiency, NoncomplianceAL Number and Title: 21.027 SLFRFFederal Award Number: SLFRP0006, SLFRP2633, SLFRP4544Applicable Compliance Requirement: Subrecipient MonitoringCondition:For one of two subrecipients, DCCED staff did not identify all federally required information on the FY 22 SLFRF subaward or conduct a risk assessment.Context:DCCED entered into a contract with the Juneau Economic Development Council (JEDC) to assist in administering the Grants to Tourism and Other Businesses for the Negative Economic Impacts portion of the SLFRF program. Under the contract, JEDC determined eligibility, sent payments to eligible grantees, and provided disbursement reports to DCCED for monitoring. This activity created a subrecipient relationship.The audit reviewed the form used to contract with JEDC and determined that none of the federally required information was included on the form. Additionally, the audit found that a risk assessment was not conducted for JEDC.Cause:Due to staff turnover in the program manager position, JEDC was not initially identified as a subrecipient since a contract was used instead of a grant award document.Criteria:Title 2 CFR 200.303 requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award.Title 2 CFR 200.332 requires the State to perform annual risk assessments and ensure every subaward includes the required information at the time of the subaward.Effect:Absent risk assessments, subrecipients may not be sufficiently monitored, increasing the risk of inappropriate use of SLFRF monies and noncompliance with federal laws. Not providing the required information in the subaward document increases the risk of subrecipient noncompliance with the terms and conditions of the federal award and could result in the State repaying SLFRF monies to the federal government.Questioned Costs:NoneRecommendation:DCCED?s DAS director should strengthen training of program manager staff to ensure compliance with all subrecipient monitoring requirements applicable to federally funded subawards.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: United States Environmental Protection AgencyImpact: Significant Deficiency, NoncomplianceAL Number and Title: 66.202 Congressionally Mandated ProjectsFederal Award Number: 01J81201, 01J96801Applicable Compliance Requirement: ReportingCondition:Testing of five subawards subject to Federal Funding Accountability and Transparency Act (FFATA) requirements had obligated amounts incorrectly reported to the FFATA Subaward Reporting System (FSRS), or not reported at all.Context:FFATA requires information on federal awards be made available to the public via a single searchable website (www.usaspending.gov). FSRS is the reporting tool federal awardees, such as the State of Alaska, use to capture and report subaward and executive compensation data regarding first-tier subawards.The audit tested all five subawards totaling $1,477,260 issued to five Remote Maintenance Worker (RMW) subrecipients. RMW subawards, which have performance periods on a state fiscal year basis, are funded by two federal awards with consecutive award periods. Once the earlier federal award period has ended, DEC staff obligates funds from the new federal award for the remaining subaward amounts that have not been spent.Amounts for the five subawards tested had incorrect amounts reported to the FSRS. When DEC staff obligated funds from the new federal award, the obligated amounts were not reported to the FSRS. DEC staff made the corrections in the FSRS after auditors brought the errors to their attention.Cause:Per DEC staff, DEC lacks formal procedures for FFATA reporting.Criteria:Title 2 CFR 200.303 requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 2 CFR 170 states federal award recipients are required to report each subaward that obligates $30,000 or more in federal funds. This information must be reported no later than the end of the month following the month in which the obligation was made; include information about each obligating action in accordance with submission instructions; and include the names and total compensation of each of the subrecipient?s five most highly compensated executives if revenue thresholds are met and executive compensation is not available to the public.Effect:Failure to comply with FFATA reporting requirements reduces transparency, impairs decision-making, and may potentially jeopardize future federal funding.Questioned Costs:NoneRecommendation:DEC?s Division of Water director should implement written procedures to ensure all subawards subject to FFATA reporting are entered into the FSRS accurately and timely.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Cash ManagementCondition and Context:During the testing of the outstanding Title IV student check listing we observed nine instances of stale checks at the University of Alaska Southeast (UAS) and three stale checks at UAF that were aged greater than 240 days and not returned to the Department of Education.Cause:Staffing issues in the student financial aid office at the UAS and UAF campuses have made it difficult for the student financial aid departments to perform their monthly review of uncashed checks in a timely manner. The delays in this process caused several instances of outstanding checks to age beyond 240 days.Criteria:The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Additionally, 2 CFR 200.303 states that nonfederal 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.Effect:Funds are not returned to the Department of Education in a timely manner.Questioned Costs:NoneRecommendation:UAS and UAF should continue working with the Statewide Office of Finance and Accounting to better enforce the monthly review of uncashed checks policy.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Special Tests and ProvisionsCondition and Context:The enrollment effective date reported to the National Student Loan Database System (NSLDS) for five of the ten sampled students from the UAS campus was incorrect and did not match the correct last dates of attendance on file in the institution?s records.Cause:At the UAS campus, there is a process that is run by the registrar for unofficial withdrawals at the end of every semester that overrides the correct institutional last date of attendance with the last date of the semester. This incorrect date is then reported to the Clearinghouse and ultimately NSLDS.Criteria:The Code of Federal Regulations, 34 CFR 685.309(b), states the school is required to report changes in the student?s enrollment status, the effective date of the status, and an anticipated completion date. Additionally, 2 CFR 200.303 states that nonfederal 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.Effect:UAS was not in compliance with the requirements to properly report student enrollment data correctly. Incorrect dates submitted to NSLDS may be used to determine the grace period for the repayment and interest of outstanding Title IV student loans.Questioned Costs:NoneRecommendation:We recommend that UAS work with the campus registrar?s office to develop an alternative process that will enable the student financial aid office to review and correct the last dates of attendance prior to being reported to the Clearinghouse.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.027A Special Education Grants to States84.027X Special Education Grants to States ? COVID-1984.173A Special Education Preschool Grants84.173X Special Education Preschool Grants ? COVID-19Federal Award Number: H027A210016; H027X210016; H173A210019; H173X210019Applicable Compliance Requirement: Matching, Level of Effort, EarmarkingCondition:Twenty-one of 53 LEAs received FY 22 Special Education (SPED) subgrant allocations that were not calculated in accordance with federal regulations.Context:The federal SPED grant award includes a summary table that directs the allocation of amounts for various funding categories, such as maximum amounts available for state administration and state-level activities. Based on funding amounts found on the summary table, DEED staff utilized a spreadsheet to calculate payments to be distributed to each LEA. Along with calculating a base payment subject to criteria set in Title 34 CFR ? 300.705(b)(1) & (2), DEED staff calculated an allocation of all remaining funds to be disbursed to LEAs based on criteria set out in Title 34 CFR ? 300.705(b)(3). Per this criteria, 85 percent of the remaining funds must be based on an LEA?s count of students enrolled in elementary and secondary schools, and the remaining 15 percent is based on a count of children living in poverty.Auditors identified that two of the seven LEAs selected for testing had improper allocation amounts. Expanded testing identified that a total of 21 LEAs had spreadsheet formulas that referenced a different LEA?s poverty-child count.Cause:Due to human error, the FY 22 SPED allocation spreadsheet contained an incorrect formula. Supervisory review procedures were insufficient to detect the error.Criteria:Title 2 CFR ? 200.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 32 CFR ? 300.705(b)(3) requires 85 percent of any remaining funds to be allocated to LEAs based on the relative number of children enrolled in public and private elementary schools and secondary schools within an LEA?s jurisdiction. The remaining 15 percent is allocated based on the relative number of children living in poverty.Effect:The formula error and inadequate review procedures resulted in overpayments to nine LEAs totaling $357,269, with equivalent offsetting underpayments to 12 LEAs.Questioned Costs:Assistance Listing (AL) 84.027A: $270,805AL 84.027X COVID-19: $86,464Recommendation:DEED?s DAS director should improve procedures for reviewing the calculation of SPED allocations to LEAs. Additionally, the DAS director should work with the affected LEAs to correct the erroneous payments.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.027A Special Education Grants to States84.027X Special Education Grants to States ? COVID-1984.173A Special Education Preschool Grants84.173X Special Education Preschool Grants ? COVID-19Federal Award Number: H027A210016; H027X210016; H173A210019; H173X210019Applicable Compliance Requirement: Matching, Level of Effort, EarmarkingCondition:Twenty-one of 53 LEAs received FY 22 Special Education (SPED) subgrant allocations that were not calculated in accordance with federal regulations.Context:The federal SPED grant award includes a summary table that directs the allocation of amounts for various funding categories, such as maximum amounts available for state administration and state-level activities. Based on funding amounts found on the summary table, DEED staff utilized a spreadsheet to calculate payments to be distributed to each LEA. Along with calculating a base payment subject to criteria set in Title 34 CFR ? 300.705(b)(1) & (2), DEED staff calculated an allocation of all remaining funds to be disbursed to LEAs based on criteria set out in Title 34 CFR ? 300.705(b)(3). Per this criteria, 85 percent of the remaining funds must be based on an LEA?s count of students enrolled in elementary and secondary schools, and the remaining 15 percent is based on a count of children living in poverty.Auditors identified that two of the seven LEAs selected for testing had improper allocation amounts. Expanded testing identified that a total of 21 LEAs had spreadsheet formulas that referenced a different LEA?s poverty-child count.Cause:Due to human error, the FY 22 SPED allocation spreadsheet contained an incorrect formula. Supervisory review procedures were insufficient to detect the error.Criteria:Title 2 CFR ? 200.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 32 CFR ? 300.705(b)(3) requires 85 percent of any remaining funds to be allocated to LEAs based on the relative number of children enrolled in public and private elementary schools and secondary schools within an LEA?s jurisdiction. The remaining 15 percent is allocated based on the relative number of children living in poverty.Effect:The formula error and inadequate review procedures resulted in overpayments to nine LEAs totaling $357,269, with equivalent offsetting underpayments to 12 LEAs.Questioned Costs:Assistance Listing (AL) 84.027A: $270,805AL 84.027X COVID-19: $86,464Recommendation:DEED?s DAS director should improve procedures for reviewing the calculation of SPED allocations to LEAs. Additionally, the DAS director should work with the affected LEAs to correct the erroneous payments.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Cash ManagementCondition and Context:During the testing of the outstanding Title IV student check listing we observed nine instances of stale checks at the University of Alaska Southeast (UAS) and three stale checks at UAF that were aged greater than 240 days and not returned to the Department of Education.Cause:Staffing issues in the student financial aid office at the UAS and UAF campuses have made it difficult for the student financial aid departments to perform their monthly review of uncashed checks in a timely manner. The delays in this process caused several instances of outstanding checks to age beyond 240 days.Criteria:The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Additionally, 2 CFR 200.303 states that nonfederal 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.Effect:Funds are not returned to the Department of Education in a timely manner.Questioned Costs:NoneRecommendation:UAS and UAF should continue working with the Statewide Office of Finance and Accounting to better enforce the monthly review of uncashed checks policy.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Special Tests and ProvisionsCondition and Context:The enrollment effective date reported to the National Student Loan Database System (NSLDS) for five of the ten sampled students from the UAS campus was incorrect and did not match the correct last dates of attendance on file in the institution?s records.Cause:At the UAS campus, there is a process that is run by the registrar for unofficial withdrawals at the end of every semester that overrides the correct institutional last date of attendance with the last date of the semester. This incorrect date is then reported to the Clearinghouse and ultimately NSLDS.Criteria:The Code of Federal Regulations, 34 CFR 685.309(b), states the school is required to report changes in the student?s enrollment status, the effective date of the status, and an anticipated completion date. Additionally, 2 CFR 200.303 states that nonfederal 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.Effect:UAS was not in compliance with the requirements to properly report student enrollment data correctly. Incorrect dates submitted to NSLDS may be used to determine the grace period for the repayment and interest of outstanding Title IV student loans.Questioned Costs:NoneRecommendation:We recommend that UAS work with the campus registrar?s office to develop an alternative process that will enable the student financial aid office to review and correct the last dates of attendance prior to being reported to the Clearinghouse.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Cash ManagementCondition and Context:During the testing of the outstanding Title IV student check listing we observed nine instances of stale checks at the University of Alaska Southeast (UAS) and three stale checks at UAF that were aged greater than 240 days and not returned to the Department of Education.Cause:Staffing issues in the student financial aid office at the UAS and UAF campuses have made it difficult for the student financial aid departments to perform their monthly review of uncashed checks in a timely manner. The delays in this process caused several instances of outstanding checks to age beyond 240 days.Criteria:The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Additionally, 2 CFR 200.303 states that nonfederal 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.Effect:Funds are not returned to the Department of Education in a timely manner.Questioned Costs:NoneRecommendation:UAS and UAF should continue working with the Statewide Office of Finance and Accounting to better enforce the monthly review of uncashed checks policy.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Special Tests and ProvisionsCondition and Context:The enrollment effective date reported to the National Student Loan Database System (NSLDS) for five of the ten sampled students from the UAS campus was incorrect and did not match the correct last dates of attendance on file in the institution?s records.Cause:At the UAS campus, there is a process that is run by the registrar for unofficial withdrawals at the end of every semester that overrides the correct institutional last date of attendance with the last date of the semester. This incorrect date is then reported to the Clearinghouse and ultimately NSLDS.Criteria:The Code of Federal Regulations, 34 CFR 685.309(b), states the school is required to report changes in the student?s enrollment status, the effective date of the status, and an anticipated completion date. Additionally, 2 CFR 200.303 states that nonfederal 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.Effect:UAS was not in compliance with the requirements to properly report student enrollment data correctly. Incorrect dates submitted to NSLDS may be used to determine the grace period for the repayment and interest of outstanding Title IV student loans.Questioned Costs:NoneRecommendation:We recommend that UAS work with the campus registrar?s office to develop an alternative process that will enable the student financial aid office to review and correct the last dates of attendance prior to being reported to the Clearinghouse.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.027A Special Education Grants to States84.027X Special Education Grants to States ? COVID-1984.173A Special Education Preschool Grants84.173X Special Education Preschool Grants ? COVID-19Federal Award Number: H027A210016; H027X210016; H173A210019; H173X210019Applicable Compliance Requirement: Matching, Level of Effort, EarmarkingCondition:Twenty-one of 53 LEAs received FY 22 Special Education (SPED) subgrant allocations that were not calculated in accordance with federal regulations.Context:The federal SPED grant award includes a summary table that directs the allocation of amounts for various funding categories, such as maximum amounts available for state administration and state-level activities. Based on funding amounts found on the summary table, DEED staff utilized a spreadsheet to calculate payments to be distributed to each LEA. Along with calculating a base payment subject to criteria set in Title 34 CFR ? 300.705(b)(1) & (2), DEED staff calculated an allocation of all remaining funds to be disbursed to LEAs based on criteria set out in Title 34 CFR ? 300.705(b)(3). Per this criteria, 85 percent of the remaining funds must be based on an LEA?s count of students enrolled in elementary and secondary schools, and the remaining 15 percent is based on a count of children living in poverty.Auditors identified that two of the seven LEAs selected for testing had improper allocation amounts. Expanded testing identified that a total of 21 LEAs had spreadsheet formulas that referenced a different LEA?s poverty-child count.Cause:Due to human error, the FY 22 SPED allocation spreadsheet contained an incorrect formula. Supervisory review procedures were insufficient to detect the error.Criteria:Title 2 CFR ? 200.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 32 CFR ? 300.705(b)(3) requires 85 percent of any remaining funds to be allocated to LEAs based on the relative number of children enrolled in public and private elementary schools and secondary schools within an LEA?s jurisdiction. The remaining 15 percent is allocated based on the relative number of children living in poverty.Effect:The formula error and inadequate review procedures resulted in overpayments to nine LEAs totaling $357,269, with equivalent offsetting underpayments to 12 LEAs.Questioned Costs:Assistance Listing (AL) 84.027A: $270,805AL 84.027X COVID-19: $86,464Recommendation:DEED?s DAS director should improve procedures for reviewing the calculation of SPED allocations to LEAs. Additionally, the DAS director should work with the affected LEAs to correct the erroneous payments.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.027A Special Education Grants to States84.027X Special Education Grants to States ? COVID-1984.173A Special Education Preschool Grants84.173X Special Education Preschool Grants ? COVID-19Federal Award Number: H027A210016; H027X210016; H173A210019; H173X210019Applicable Compliance Requirement: Matching, Level of Effort, EarmarkingCondition:Twenty-one of 53 LEAs received FY 22 Special Education (SPED) subgrant allocations that were not calculated in accordance with federal regulations.Context:The federal SPED grant award includes a summary table that directs the allocation of amounts for various funding categories, such as maximum amounts available for state administration and state-level activities. Based on funding amounts found on the summary table, DEED staff utilized a spreadsheet to calculate payments to be distributed to each LEA. Along with calculating a base payment subject to criteria set in Title 34 CFR ? 300.705(b)(1) & (2), DEED staff calculated an allocation of all remaining funds to be disbursed to LEAs based on criteria set out in Title 34 CFR ? 300.705(b)(3). Per this criteria, 85 percent of the remaining funds must be based on an LEA?s count of students enrolled in elementary and secondary schools, and the remaining 15 percent is based on a count of children living in poverty.Auditors identified that two of the seven LEAs selected for testing had improper allocation amounts. Expanded testing identified that a total of 21 LEAs had spreadsheet formulas that referenced a different LEA?s poverty-child count.Cause:Due to human error, the FY 22 SPED allocation spreadsheet contained an incorrect formula. Supervisory review procedures were insufficient to detect the error.Criteria:Title 2 CFR ? 200.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 32 CFR ? 300.705(b)(3) requires 85 percent of any remaining funds to be allocated to LEAs based on the relative number of children enrolled in public and private elementary schools and secondary schools within an LEA?s jurisdiction. The remaining 15 percent is allocated based on the relative number of children living in poverty.Effect:The formula error and inadequate review procedures resulted in overpayments to nine LEAs totaling $357,269, with equivalent offsetting underpayments to 12 LEAs.Questioned Costs:Assistance Listing (AL) 84.027A: $270,805AL 84.027X COVID-19: $86,464Recommendation:DEED?s DAS director should improve procedures for reviewing the calculation of SPED allocations to LEAs. Additionally, the DAS director should work with the affected LEAs to correct the erroneous payments.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Cash ManagementCondition and Context:During the testing of the outstanding Title IV student check listing we observed nine instances of stale checks at the University of Alaska Southeast (UAS) and three stale checks at UAF that were aged greater than 240 days and not returned to the Department of Education.Cause:Staffing issues in the student financial aid office at the UAS and UAF campuses have made it difficult for the student financial aid departments to perform their monthly review of uncashed checks in a timely manner. The delays in this process caused several instances of outstanding checks to age beyond 240 days.Criteria:The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Additionally, 2 CFR 200.303 states that nonfederal 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.Effect:Funds are not returned to the Department of Education in a timely manner.Questioned Costs:NoneRecommendation:UAS and UAF should continue working with the Statewide Office of Finance and Accounting to better enforce the monthly review of uncashed checks policy.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Special Tests and ProvisionsCondition and Context:The enrollment effective date reported to the National Student Loan Database System (NSLDS) for five of the ten sampled students from the UAS campus was incorrect and did not match the correct last dates of attendance on file in the institution?s records.Cause:At the UAS campus, there is a process that is run by the registrar for unofficial withdrawals at the end of every semester that overrides the correct institutional last date of attendance with the last date of the semester. This incorrect date is then reported to the Clearinghouse and ultimately NSLDS.Criteria:The Code of Federal Regulations, 34 CFR 685.309(b), states the school is required to report changes in the student?s enrollment status, the effective date of the status, and an anticipated completion date. Additionally, 2 CFR 200.303 states that nonfederal 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.Effect:UAS was not in compliance with the requirements to properly report student enrollment data correctly. Incorrect dates submitted to NSLDS may be used to determine the grace period for the repayment and interest of outstanding Title IV student loans.Questioned Costs:NoneRecommendation:We recommend that UAS work with the campus registrar?s office to develop an alternative process that will enable the student financial aid office to review and correct the last dates of attendance prior to being reported to the Clearinghouse.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Cash ManagementCondition and Context:During the testing of the outstanding Title IV student check listing we observed nine instances of stale checks at the University of Alaska Southeast (UAS) and three stale checks at UAF that were aged greater than 240 days and not returned to the Department of Education.Cause:Staffing issues in the student financial aid office at the UAS and UAF campuses have made it difficult for the student financial aid departments to perform their monthly review of uncashed checks in a timely manner. The delays in this process caused several instances of outstanding checks to age beyond 240 days.Criteria:The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Additionally, 2 CFR 200.303 states that nonfederal 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.Effect:Funds are not returned to the Department of Education in a timely manner.Questioned Costs:NoneRecommendation:UAS and UAF should continue working with the Statewide Office of Finance and Accounting to better enforce the monthly review of uncashed checks policy.Views of Responsible Officials:Management agrees with the finding.