FINDING 2024-001 Subject: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY22-23, FY23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the compliance requirements for Eligibility related to income guidelines and direct certifications. The Food Service Director entered the income guidelines into the Harmony software at the beginning of each school year. Free and reduced applications are processed through the Harmony software, which makes the determination for each student based on the income guidelines entered by the Food Service Director. There were no internal controls in place to ensure the Food Service Director entered the income guidelines into the Harmony software correctly. There was no internal control in place to ensure that direct certification reports were processed at the start of the school year and monthly thereafter, or that the student statuses were updated accordingly. Additionally, there was no review to verify that the year-to-date direct certification reports were processed to identify any students that were missed in a prior month when the report was not processed. Of the 25 students tested, 1 had the wrong status in the Harmony software from August 9, 2022 to January 30, 2023. The student was listed as paying the reduced rate for meals but should have been classified as eligible for free meals. The direct certification reports for the audit period were not retained; therefore, we could not verify that the students who were enrolled during the fiscal years 2022-2023 or 2023-2024 qualified for free or reduced meals under the direct certification method. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 NORTH CENTRAL PARKE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 245.3(c) states in part: "Each School Food Authority shall serve free and reduced price meals or free milk in the respective programs to children eligible under its eligibility criteria. . . ." 7 CFR 245.6(b)1(iii) states: "Beginning in School Year 2012-2013, direct certification shall be conducted using a data matching technique only and letters to household for direct certification may be used only as an additional means to notify households of children's eligibility based on receipt of SNAP benefits. The last period that letters to households may be used as the primary method for direct certification is School Year 2011-12." Cause The School Corporation was unaware that they needed to verify the income guidelines in the software system and to maintain the year-to-date direct certification reports as stated above. Effect Without an effectively designed system of internal controls, the School Corporation did not verify children who were on the direct certification listing monthly as required. This allowed a student to be incorrectly classified in the software system and prevented the student from receiving the appropriate assistance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management strengthen its system of internal controls to ensure that they review income guidelines in the Harmony software, process the direct certification reports monthly, and update the student statuses accordingly. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY22-23, FY23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the compliance requirements for Eligibility related to income guidelines and direct certifications. The Food Service Director entered the income guidelines into the Harmony software at the beginning of each school year. Free and reduced applications are processed through the Harmony software, which makes the determination for each student based on the income guidelines entered by the Food Service Director. There were no internal controls in place to ensure the Food Service Director entered the income guidelines into the Harmony software correctly. There was no internal control in place to ensure that direct certification reports were processed at the start of the school year and monthly thereafter, or that the student statuses were updated accordingly. Additionally, there was no review to verify that the year-to-date direct certification reports were processed to identify any students that were missed in a prior month when the report was not processed. Of the 25 students tested, 1 had the wrong status in the Harmony software from August 9, 2022 to January 30, 2023. The student was listed as paying the reduced rate for meals but should have been classified as eligible for free meals. The direct certification reports for the audit period were not retained; therefore, we could not verify that the students who were enrolled during the fiscal years 2022-2023 or 2023-2024 qualified for free or reduced meals under the direct certification method. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 NORTH CENTRAL PARKE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 245.3(c) states in part: "Each School Food Authority shall serve free and reduced price meals or free milk in the respective programs to children eligible under its eligibility criteria. . . ." 7 CFR 245.6(b)1(iii) states: "Beginning in School Year 2012-2013, direct certification shall be conducted using a data matching technique only and letters to household for direct certification may be used only as an additional means to notify households of children's eligibility based on receipt of SNAP benefits. The last period that letters to households may be used as the primary method for direct certification is School Year 2011-12." Cause The School Corporation was unaware that they needed to verify the income guidelines in the software system and to maintain the year-to-date direct certification reports as stated above. Effect Without an effectively designed system of internal controls, the School Corporation did not verify children who were on the direct certification listing monthly as required. This allowed a student to be incorrectly classified in the software system and prevented the student from receiving the appropriate assistance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management strengthen its system of internal controls to ensure that they review income guidelines in the Harmony software, process the direct certification reports monthly, and update the student statuses accordingly. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY22-23, FY23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the compliance requirements for Eligibility related to income guidelines and direct certifications. The Food Service Director entered the income guidelines into the Harmony software at the beginning of each school year. Free and reduced applications are processed through the Harmony software, which makes the determination for each student based on the income guidelines entered by the Food Service Director. There were no internal controls in place to ensure the Food Service Director entered the income guidelines into the Harmony software correctly. There was no internal control in place to ensure that direct certification reports were processed at the start of the school year and monthly thereafter, or that the student statuses were updated accordingly. Additionally, there was no review to verify that the year-to-date direct certification reports were processed to identify any students that were missed in a prior month when the report was not processed. Of the 25 students tested, 1 had the wrong status in the Harmony software from August 9, 2022 to January 30, 2023. The student was listed as paying the reduced rate for meals but should have been classified as eligible for free meals. The direct certification reports for the audit period were not retained; therefore, we could not verify that the students who were enrolled during the fiscal years 2022-2023 or 2023-2024 qualified for free or reduced meals under the direct certification method. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 NORTH CENTRAL PARKE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 245.3(c) states in part: "Each School Food Authority shall serve free and reduced price meals or free milk in the respective programs to children eligible under its eligibility criteria. . . ." 7 CFR 245.6(b)1(iii) states: "Beginning in School Year 2012-2013, direct certification shall be conducted using a data matching technique only and letters to household for direct certification may be used only as an additional means to notify households of children's eligibility based on receipt of SNAP benefits. The last period that letters to households may be used as the primary method for direct certification is School Year 2011-12." Cause The School Corporation was unaware that they needed to verify the income guidelines in the software system and to maintain the year-to-date direct certification reports as stated above. Effect Without an effectively designed system of internal controls, the School Corporation did not verify children who were on the direct certification listing monthly as required. This allowed a student to be incorrectly classified in the software system and prevented the student from receiving the appropriate assistance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management strengthen its system of internal controls to ensure that they review income guidelines in the Harmony software, process the direct certification reports monthly, and update the student statuses accordingly. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY22-23, FY23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the compliance requirements for Eligibility related to income guidelines and direct certifications. The Food Service Director entered the income guidelines into the Harmony software at the beginning of each school year. Free and reduced applications are processed through the Harmony software, which makes the determination for each student based on the income guidelines entered by the Food Service Director. There were no internal controls in place to ensure the Food Service Director entered the income guidelines into the Harmony software correctly. There was no internal control in place to ensure that direct certification reports were processed at the start of the school year and monthly thereafter, or that the student statuses were updated accordingly. Additionally, there was no review to verify that the year-to-date direct certification reports were processed to identify any students that were missed in a prior month when the report was not processed. Of the 25 students tested, 1 had the wrong status in the Harmony software from August 9, 2022 to January 30, 2023. The student was listed as paying the reduced rate for meals but should have been classified as eligible for free meals. The direct certification reports for the audit period were not retained; therefore, we could not verify that the students who were enrolled during the fiscal years 2022-2023 or 2023-2024 qualified for free or reduced meals under the direct certification method. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 NORTH CENTRAL PARKE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 245.3(c) states in part: "Each School Food Authority shall serve free and reduced price meals or free milk in the respective programs to children eligible under its eligibility criteria. . . ." 7 CFR 245.6(b)1(iii) states: "Beginning in School Year 2012-2013, direct certification shall be conducted using a data matching technique only and letters to household for direct certification may be used only as an additional means to notify households of children's eligibility based on receipt of SNAP benefits. The last period that letters to households may be used as the primary method for direct certification is School Year 2011-12." Cause The School Corporation was unaware that they needed to verify the income guidelines in the software system and to maintain the year-to-date direct certification reports as stated above. Effect Without an effectively designed system of internal controls, the School Corporation did not verify children who were on the direct certification listing monthly as required. This allowed a student to be incorrectly classified in the software system and prevented the student from receiving the appropriate assistance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management strengthen its system of internal controls to ensure that they review income guidelines in the Harmony software, process the direct certification reports monthly, and update the student statuses accordingly. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
NON-COMPLIANCE AND DEFICIENCY IN INTERNAL CONTROLS OVER COMPLIANCE WITH SUSPENSION AND DEBARMENT REQUIREMENTS Federal Agency: U.S. Department of Treasury Federal Program Title: COVID 19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listing: 21.027 Pass-Through Entities: Cook County Department of Public Health and Illinois Department of Human Services Criteria – In accordance with 2 CFR part 180 non-federal entities are prohibited from contracting with, or making subawards to parties that are suspended or debarred, or otherwise excluded. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. The requirement is for non-federal entities to check for suspended or debarred persons or entities before entering into covered transactions with them. In addition, 2 CFR 200.303 requires that “The non-Federal entity must: (a) Establish, document and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award”. Condition – The Organization has a federal suspension and debarment policy however, the Organization did not perform the proper suspension and debarment check on SAM.gov for the tested vendors in our sample, prior to engaging them to provide goods or services to the Organization. We tested a sample of three vendors in a total population of fifteen subject to this compliance requirement for the major program. Questioned Costs – None, as management subsequently demonstrated that none of the tested vendors contracted in covered transactions had been suspended or debarred. Effect – The Organization did not perform proper suspension and debarment procedures regarding certain vendors of covered transaction prior to obtaining their services. This could have resulted in disallowed costs by the federal grantor. Cause – The Organization did not follow the written policies, procedures and controls in place to ensure compliance with the federal suspension and debarment. Recommendation – We recommend that the Organization strengthen procedures and internal controls to ensure that the Uniform Guidance suspension and debarment requirements are complied with, and that support for the dates and the results of suspension and debarment checks on SAM.gov are retained. Views of Responsible Officials – We agree with the auditors’ finding.
NON-COMPLIANCE AND DEFICIENCY IN INTERNAL CONTROLS OVER COMPLIANCE WITH SUSPENSION AND DEBARMENT REQUIREMENTS Federal Agency: U.S. Department of Treasury Federal Program Title: COVID 19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listing: 21.027 Pass-Through Entities: Cook County Department of Public Health and Illinois Department of Human Services Criteria – In accordance with 2 CFR part 180 non-federal entities are prohibited from contracting with, or making subawards to parties that are suspended or debarred, or otherwise excluded. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. The requirement is for non-federal entities to check for suspended or debarred persons or entities before entering into covered transactions with them. In addition, 2 CFR 200.303 requires that “The non-Federal entity must: (a) Establish, document and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award”. Condition – The Organization has a federal suspension and debarment policy however, the Organization did not perform the proper suspension and debarment check on SAM.gov for the tested vendors in our sample, prior to engaging them to provide goods or services to the Organization. We tested a sample of three vendors in a total population of fifteen subject to this compliance requirement for the major program. Questioned Costs – None, as management subsequently demonstrated that none of the tested vendors contracted in covered transactions had been suspended or debarred. Effect – The Organization did not perform proper suspension and debarment procedures regarding certain vendors of covered transaction prior to obtaining their services. This could have resulted in disallowed costs by the federal grantor. Cause – The Organization did not follow the written policies, procedures and controls in place to ensure compliance with the federal suspension and debarment. Recommendation – We recommend that the Organization strengthen procedures and internal controls to ensure that the Uniform Guidance suspension and debarment requirements are complied with, and that support for the dates and the results of suspension and debarment checks on SAM.gov are retained. Views of Responsible Officials – We agree with the auditors’ finding.
Allowable Costs/Activities Allowed – Approval of Invoices Funding Agency: U.S. Department of Health and Human Services Pass-through from Georgia Department of Behavioral Health and Developmental Disabilities Grant: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 and Funding Agency: U.S. Department of Health and Human Services Pass-through from Georgia Department of Behavioral Health and Developmental Disabilities Grant: Social Services Block Grant Assistance Listing Number: 93.667 Type of Finding: Significant Deficiency over Internal Control over Compliance. Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal awards that provides assurance that the entity is managing the federal awards in compliance with federal statutes, regulations and conditions of the federal awards. Condition: During our testing, we noted invoices that lacked proper review documentation. Context: Of the 50 selections we tested across both major federal programs, we noted 23 did not have evidence of review and approval. Effect: Costs could be charged to federal programs which are unallowed due to lack of review by appropriate personnel. The Organization also had turnover in the accounting department. Cause: The Organization did not follow its fiscal policies and procedures on obtaining invoice approval. Recommendation: Management should ensure it is following its fiscal policies and procedures on invoice approval. Grantee Comment: Refer to Corrective Action Plan
Allowable Costs/Activities Allowed – Approval of Invoices Funding Agency: U.S. Department of Health and Human Services Pass-through from Georgia Department of Behavioral Health and Developmental Disabilities Grant: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 and Funding Agency: U.S. Department of Health and Human Services Pass-through from Georgia Department of Behavioral Health and Developmental Disabilities Grant: Social Services Block Grant Assistance Listing Number: 93.667 Type of Finding: Significant Deficiency over Internal Control over Compliance. Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal awards that provides assurance that the entity is managing the federal awards in compliance with federal statutes, regulations and conditions of the federal awards. Condition: During our testing, we noted invoices that lacked proper review documentation. Context: Of the 50 selections we tested across both major federal programs, we noted 23 did not have evidence of review and approval. Effect: Costs could be charged to federal programs which are unallowed due to lack of review by appropriate personnel. The Organization also had turnover in the accounting department. Cause: The Organization did not follow its fiscal policies and procedures on obtaining invoice approval. Recommendation: Management should ensure it is following its fiscal policies and procedures on invoice approval. Grantee Comment: Refer to Corrective Action Plan
Allowable Costs/Activities Allowed – Approval of Invoices Funding Agency: U.S. Department of Health and Human Services Pass-through from Georgia Department of Behavioral Health and Developmental Disabilities Grant: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 and Funding Agency: U.S. Department of Health and Human Services Pass-through from Georgia Department of Behavioral Health and Developmental Disabilities Grant: Social Services Block Grant Assistance Listing Number: 93.667 Type of Finding: Significant Deficiency over Internal Control over Compliance. Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal awards that provides assurance that the entity is managing the federal awards in compliance with federal statutes, regulations and conditions of the federal awards. Condition: During our testing, we noted invoices that lacked proper review documentation. Context: Of the 50 selections we tested across both major federal programs, we noted 23 did not have evidence of review and approval. Effect: Costs could be charged to federal programs which are unallowed due to lack of review by appropriate personnel. The Organization also had turnover in the accounting department. Cause: The Organization did not follow its fiscal policies and procedures on obtaining invoice approval. Recommendation: Management should ensure it is following its fiscal policies and procedures on invoice approval. Grantee Comment: Refer to Corrective Action Plan
Information on the federal program: Subject: Special Education Cluster – Internal Controls Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027, 84.027X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-090-PN01, 23611-090-PN01, 22611-090-ARP, 24611-090-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Special Education Cluster and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the three small purchase method procurements sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. The total amount disbursed for the sample items was $127,299 in FY23 and $25,354 in FY24 for contracted rehabilitation therapy and speech pathology services. Additionally, the School Corporation did not perform suspension and debarment checks on the sample vendors. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding numbers were 2022-005 and 2022-006. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Special Education Cluster – Internal Controls Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027, 84.027X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-090-PN01, 23611-090-PN01, 22611-090-ARP, 24611-090-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Special Education Cluster and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the three small purchase method procurements sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. The total amount disbursed for the sample items was $127,299 in FY23 and $25,354 in FY24 for contracted rehabilitation therapy and speech pathology services. Additionally, the School Corporation did not perform suspension and debarment checks on the sample vendors. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding numbers were 2022-005 and 2022-006. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Special Education Cluster – Internal Controls Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027, 84.027X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-090-PN01, 23611-090-PN01, 22611-090-ARP, 24611-090-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Special Education Cluster and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the three small purchase method procurements sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. The total amount disbursed for the sample items was $127,299 in FY23 and $25,354 in FY24 for contracted rehabilitation therapy and speech pathology services. Additionally, the School Corporation did not perform suspension and debarment checks on the sample vendors. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding numbers were 2022-005 and 2022-006. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Special Education Cluster – Internal Controls Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027, 84.027X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-090-PN01, 23611-090-PN01, 22611-090-ARP, 24611-090-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Special Education Cluster and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the three small purchase method procurements sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. The total amount disbursed for the sample items was $127,299 in FY23 and $25,354 in FY24 for contracted rehabilitation therapy and speech pathology services. Additionally, the School Corporation did not perform suspension and debarment checks on the sample vendors. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding numbers were 2022-005 and 2022-006. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. 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 establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit two Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER II amount reported on the Year 3 report ($572,289) did not agree to the underlying expenditure records ($558,956) for the period of July 1, 2021 through June 30, 2022. Additionally, we noted that the ESSER I, ESSER II, and ESSER III amounts reported on the Year 4 report ($105,506, $510,158, and $1,156,254, respectively) did not agree to the underlying expenditure records ($138,662, $316,236, and $1,158,054, respectively) for the period of July 1, 2022 through June 30, 2023. We also noted there was no documented, secondary review of the information in the annual data reports by someone other than the preparer. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-008. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. 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 establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit two Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER II amount reported on the Year 3 report ($572,289) did not agree to the underlying expenditure records ($558,956) for the period of July 1, 2021 through June 30, 2022. Additionally, we noted that the ESSER I, ESSER II, and ESSER III amounts reported on the Year 4 report ($105,506, $510,158, and $1,156,254, respectively) did not agree to the underlying expenditure records ($138,662, $316,236, and $1,158,054, respectively) for the period of July 1, 2022 through June 30, 2023. We also noted there was no documented, secondary review of the information in the annual data reports by someone other than the preparer. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-008. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Material Noncompliance, Qualified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) 29 CFR 5.5 states in part: (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. 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. Noncompliance with the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: For the one project sampled for Davis-Bacon requirements, the School Corporation did not obtain the weekly payroll reports certifications from the company that performed renovations on the School Corporation. Therefore, no review was performed to ensure that pay rates complied with the federal wage rate requirements. Additionally, the School Corporation did not have a contract with the company that included the clause for the federal wage rate requirements. The amount disbursed and reported on the SEFA during the audit period is $1,114,159. Identification as a repeat finding: No. Recommendation: 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 and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
2024-002 Approval Of Expense Transactions - Significant Deficiency - Activities Allowed Or Unallowed And Allowable Costs/Cost Principles U.S. Department of Treasury - Pass through from NV State Public Charter School Authority: ALNs 21.027 - COVID-19: Coronavirus State and Local Fiscal Recovery Funds Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The School has an internal control in place that payroll transactions are approved by the respective principal prior to their submission for payment Condition: During the course of the audit, the engagement team identified multiple expenditures where the support showing the principal’s approval of the federal grant expense was unable to be provided. Cause: The entity did not maintain sufficient support documentation to prove that expenditures were reviewed before payroll transactions were submitted for payment. Effect: Potential noncompliance could occur if expenditure amounts are not reviewed by the principal for accuracy and completeness. Questioned Costs: Not applicable. Context: These audit findings represent a systemic issue. Identification As A Repeat Finding: Yes Recommendation: The School should maintain proper documentation for all payroll transactions. View Of Responsible Officials: A process was put in place in January 2024 to ensure that all principal approvals are documented in writing or electronic approval in the system which can be date stamped by the system. Payroll will not be run, nor grants submitted, until proper approval is received.
2024-002 Approval Of Expense Transactions - Significant Deficiency - Activities Allowed Or Unallowed And Allowable Costs/Cost Principles U.S. Department of Treasury - Pass through from NV State Public Charter School Authority: ALNs 21.027 - COVID-19: Coronavirus State and Local Fiscal Recovery Funds Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The School has an internal control in place that payroll transactions are approved by the respective principal prior to their submission for payment Condition: During the course of the audit, the engagement team identified multiple expenditures where the support showing the principal’s approval of the federal grant expense was unable to be provided. Cause: The entity did not maintain sufficient support documentation to prove that expenditures were reviewed before payroll transactions were submitted for payment. Effect: Potential noncompliance could occur if expenditure amounts are not reviewed by the principal for accuracy and completeness. Questioned Costs: Not applicable. Context: These audit findings represent a systemic issue. Identification As A Repeat Finding: Yes Recommendation: The School should maintain proper documentation for all payroll transactions. View Of Responsible Officials: A process was put in place in January 2024 to ensure that all principal approvals are documented in writing or electronic approval in the system which can be date stamped by the system. Payroll will not be run, nor grants submitted, until proper approval is received.
2024 – 004: Reporting Federal Agency: U.S. Department Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425D210013, S425W210015 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Material Weakness in Internal Control Over Compliance • Other Matters Criteria or specific requirement: Grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. Amounts reports must be supported by the unit's records. Per 2 CFR 200.303, The non-Federal entity must: (a) Establish and maintain effective internal control over the federal award 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 of the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: While performing audit procedures, it was noted that NWILCS did not file the required annual report that was due during the audit period. Questioned costs: None. Context: During audit testing, it was noted that the annual reporting was not completed by NWILCS as required during the audit period. Cause: The reporting requirement was missed due to management’s oversight. Effect: NWILCS has not fully followed compliance attributes with the reporting requirements set forth by the Compliance Supplement. Personnel need to reinforce policies to ensure control procedures are in place to ensure all required grant compliance items are reviewed, approved, and completed in accordance with grant requirements. Repeat finding: No. Recommendation: We recommend that NWILCS implement procedures and controls to ensure the required reports are accurate and completed timely. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 004: Reporting Federal Agency: U.S. Department Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425D210013, S425W210015 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Material Weakness in Internal Control Over Compliance • Other Matters Criteria or specific requirement: Grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. Amounts reports must be supported by the unit's records. Per 2 CFR 200.303, The non-Federal entity must: (a) Establish and maintain effective internal control over the federal award 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 of the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: While performing audit procedures, it was noted that NWILCS did not file the required annual report that was due during the audit period. Questioned costs: None. Context: During audit testing, it was noted that the annual reporting was not completed by NWILCS as required during the audit period. Cause: The reporting requirement was missed due to management’s oversight. Effect: NWILCS has not fully followed compliance attributes with the reporting requirements set forth by the Compliance Supplement. Personnel need to reinforce policies to ensure control procedures are in place to ensure all required grant compliance items are reviewed, approved, and completed in accordance with grant requirements. Repeat finding: No. Recommendation: We recommend that NWILCS implement procedures and controls to ensure the required reports are accurate and completed timely. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 004: Reporting Federal Agency: U.S. Department Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425D210013, S425W210015 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Material Weakness in Internal Control Over Compliance • Other Matters Criteria or specific requirement: Grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. Amounts reports must be supported by the unit's records. Per 2 CFR 200.303, The non-Federal entity must: (a) Establish and maintain effective internal control over the federal award 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 of the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: While performing audit procedures, it was noted that NWILCS did not file the required annual report that was due during the audit period. Questioned costs: None. Context: During audit testing, it was noted that the annual reporting was not completed by NWILCS as required during the audit period. Cause: The reporting requirement was missed due to management’s oversight. Effect: NWILCS has not fully followed compliance attributes with the reporting requirements set forth by the Compliance Supplement. Personnel need to reinforce policies to ensure control procedures are in place to ensure all required grant compliance items are reviewed, approved, and completed in accordance with grant requirements. Repeat finding: No. Recommendation: We recommend that NWILCS implement procedures and controls to ensure the required reports are accurate and completed timely. Views of responsible officials: There is no disagreement with the audit finding.
Criteria: 2 CFR 200.319 states that all procurement transactions under the Federal award must be conducted in a manner that provides full and open competition and is consistent with Federal procurement standards. 2 CFR 200.214 states in part that recipients and subrecipients are subject to the nonprocurement debarment and suspension regulations. In addition, 2 CFR 200.303 in part states that a recipient of a Federal award must establish, document, and maintain effective internal control over the Federal award. Condition: We have selected and tested three of the largest vendors from the Child Nutrition Cluster for compliance with procurement and suspension and debarment. We identified that one vendor was not properly procured, in accordance with 2 CFR 200.319–2 CFR 200.324. As a result, the District incurred questioned costs in the amount of $31,401.63, which was in excess of $25,000 Federal requirement, based on 2 CFR 200.516. Also, the District did not perform procedures to verify suspension and debarment on the same vendor. Cause: District’s internal controls over procurement in the Child Nutrition Cluster were properly designed but not operating effectively to verify that all vendors are properly procured and verified for suspension and debarment. The District did not properly procure one vendor within the Child Nutrition Cluster that incurred questioned costs in excess of the $25,000 threshold, based on 2 CFR 200.516. Effect: The District did not properly procure one vendor within the Child Nutrition Cluster that incurred questioned costs in excess of the $25,000 threshold, based on 2 CFR 200.516, and, as a result, revealed a significant deficiency in internal controls over procurement in the Child Nutrition Cluster. Repeat Finding: No. Recommendation: We recommend that the District re-evaluate the procurement processes in the Child Nutrition Services program and re-evaluate the design of internal controls over procurement and suspension and debarment to be in compliance with the Federal requirements and the District’s procurement policy.
2024-001. Internal Control Over Compliance United States Department of Agriculture, Passed-through New York State Department of Education: Child Nutrition Cluster School Breakfast Program ALN: 10.553 National School Lunch Program ALN: 10.555 Criteria: 2 CFR §200.303 of the Uniform Guidance issued by the U.S. Office of Management and Budget requires non-Federal entities receiving Federal awards to establish and maintain internal control over the Federal awards 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. Federal awards recipients must maintain written documentation of internal control policies and procedures, such as procurement policies that adhere to state and local law, as well as Federal regulations and statutes; procedures for documenting how costs are to be allocated to Federal awards, documenting actual time and effort for payroll costs charged to Federal awards; cash management procedures to minimize the time elapsed between the receipts and disbursements of Federal funds; and, how to safeguard personally identifiable information. Condition: The District did not update its existing procurement policy to conform to the Uniform Guidance requirements. Cause: Due to turnover in a key business office position, the District was unable to complete a review of its procurement policy. Effect: Having insufficient or non-compliant written policies and procedures could weaken the internal controls over management of Federal awards, potentially increasing the risk of noncompliance with Federal statutes and regulations. Questioned Costs: None reported. Context: The District’s new business official was in the process of drafting an updated purchasing guidelines document, and is responsible for reviewing existing District policies and written procedures and recommending revisions and updates to the Superintendent and Board of Education. This review process and adoption of a policy was not completed until May 2024. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The District must review its existing written policies and procedures and update them as needed in order to comply with requirements of Uniform Guidance. Views of Responsible Officials of Auditee: The District is aware of this finding and has updated its policy and related procedures in order to comply with the requirements of Uniform Guidance. The Board of Education adopted the updated policy in May 2024.
2024-001. Internal Control Over Compliance United States Department of Agriculture, Passed-through New York State Department of Education: Child Nutrition Cluster School Breakfast Program ALN: 10.553 National School Lunch Program ALN: 10.555 Criteria: 2 CFR §200.303 of the Uniform Guidance issued by the U.S. Office of Management and Budget requires non-Federal entities receiving Federal awards to establish and maintain internal control over the Federal awards 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. Federal awards recipients must maintain written documentation of internal control policies and procedures, such as procurement policies that adhere to state and local law, as well as Federal regulations and statutes; procedures for documenting how costs are to be allocated to Federal awards, documenting actual time and effort for payroll costs charged to Federal awards; cash management procedures to minimize the time elapsed between the receipts and disbursements of Federal funds; and, how to safeguard personally identifiable information. Condition: The District did not update its existing procurement policy to conform to the Uniform Guidance requirements. Cause: Due to turnover in a key business office position, the District was unable to complete a review of its procurement policy. Effect: Having insufficient or non-compliant written policies and procedures could weaken the internal controls over management of Federal awards, potentially increasing the risk of noncompliance with Federal statutes and regulations. Questioned Costs: None reported. Context: The District’s new business official was in the process of drafting an updated purchasing guidelines document, and is responsible for reviewing existing District policies and written procedures and recommending revisions and updates to the Superintendent and Board of Education. This review process and adoption of a policy was not completed until May 2024. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The District must review its existing written policies and procedures and update them as needed in order to comply with requirements of Uniform Guidance. Views of Responsible Officials of Auditee: The District is aware of this finding and has updated its policy and related procedures in order to comply with the requirements of Uniform Guidance. The Board of Education adopted the updated policy in May 2024.
2024-001. Internal Control Over Compliance United States Department of Agriculture, Passed-through New York State Department of Education: Child Nutrition Cluster School Breakfast Program ALN: 10.553 National School Lunch Program ALN: 10.555 Criteria: 2 CFR §200.303 of the Uniform Guidance issued by the U.S. Office of Management and Budget requires non-Federal entities receiving Federal awards to establish and maintain internal control over the Federal awards 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. Federal awards recipients must maintain written documentation of internal control policies and procedures, such as procurement policies that adhere to state and local law, as well as Federal regulations and statutes; procedures for documenting how costs are to be allocated to Federal awards, documenting actual time and effort for payroll costs charged to Federal awards; cash management procedures to minimize the time elapsed between the receipts and disbursements of Federal funds; and, how to safeguard personally identifiable information. Condition: The District did not update its existing procurement policy to conform to the Uniform Guidance requirements. Cause: Due to turnover in a key business office position, the District was unable to complete a review of its procurement policy. Effect: Having insufficient or non-compliant written policies and procedures could weaken the internal controls over management of Federal awards, potentially increasing the risk of noncompliance with Federal statutes and regulations. Questioned Costs: None reported. Context: The District’s new business official was in the process of drafting an updated purchasing guidelines document, and is responsible for reviewing existing District policies and written procedures and recommending revisions and updates to the Superintendent and Board of Education. This review process and adoption of a policy was not completed until May 2024. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The District must review its existing written policies and procedures and update them as needed in order to comply with requirements of Uniform Guidance. Views of Responsible Officials of Auditee: The District is aware of this finding and has updated its policy and related procedures in order to comply with the requirements of Uniform Guidance. The Board of Education adopted the updated policy in May 2024.
2024-001. Internal Control Over Compliance United States Department of Agriculture, Passed-through New York State Department of Education: Child Nutrition Cluster School Breakfast Program ALN: 10.553 National School Lunch Program ALN: 10.555 Criteria: 2 CFR §200.303 of the Uniform Guidance issued by the U.S. Office of Management and Budget requires non-Federal entities receiving Federal awards to establish and maintain internal control over the Federal awards 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. Federal awards recipients must maintain written documentation of internal control policies and procedures, such as procurement policies that adhere to state and local law, as well as Federal regulations and statutes; procedures for documenting how costs are to be allocated to Federal awards, documenting actual time and effort for payroll costs charged to Federal awards; cash management procedures to minimize the time elapsed between the receipts and disbursements of Federal funds; and, how to safeguard personally identifiable information. Condition: The District did not update its existing procurement policy to conform to the Uniform Guidance requirements. Cause: Due to turnover in a key business office position, the District was unable to complete a review of its procurement policy. Effect: Having insufficient or non-compliant written policies and procedures could weaken the internal controls over management of Federal awards, potentially increasing the risk of noncompliance with Federal statutes and regulations. Questioned Costs: None reported. Context: The District’s new business official was in the process of drafting an updated purchasing guidelines document, and is responsible for reviewing existing District policies and written procedures and recommending revisions and updates to the Superintendent and Board of Education. This review process and adoption of a policy was not completed until May 2024. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The District must review its existing written policies and procedures and update them as needed in order to comply with requirements of Uniform Guidance. Views of Responsible Officials of Auditee: The District is aware of this finding and has updated its policy and related procedures in order to comply with the requirements of Uniform Guidance. The Board of Education adopted the updated policy in May 2024.
Subject: Special Education Cluster (IDEA) - Procurement Federal Agency: Department of Education Federal Programs: Special Education Grants to States Assistance Listings Numbers: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-043-ARP; 23611-043-PN01; 24611-043-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Criteria: 2 CFR 200.303 states in part: The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (b) Formal Procurement Methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: . . . (1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bids method is the preferred method for procuring construction, if the conditions. . . . (2) Proposals. A procurement method in which either a fixed price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. . . ." Condition: The Cooperative did not obtain sealed bids or competitive proposals, nor was a circumstance met that would have allowed for a noncompetitive procurement for the purchases. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Cause: The Cooperative noted they were unaware of the procurement requirements of expenditures exceeding the Simplified Acquisition Threshold. They stated they have used the same vendors to provide professional services for several years but only recently started using federal grant award funds for the services. Effect or potential effect: Without the proper implementation of an effectively designed system of internal controls, the Cooperative cannot ensure the vendors paid with federal award funds are procured using the required methods. Without following the required methods for procurement, the Cooperative could be overpaying for services. Questioned Costs: There were no questioned costs identified. Context: The School Corporation is a member of the Northwest Indiana Special Education Cooperative (Cooperative). During fiscal year 2023-2024, the Cooperative operated the special education program and spent the federal money on behalf of all its members. As the grant agreement was between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. When the value of the procurement for property or services exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a nonfederal entity, formal procurement methods are required. The SAT is typically set at $250,000; however, Indiana Code 5-22-8 has a more restrictive threshold, and, therefore, the SAT threshold is set at $150,000. Formal procurement methods require adherence to documented procedures and formal methods such as sealed bids or proposals. During the fiscal year 2023-2024, the Cooperative had three vendors which exceeded the SAT and all three vendors were tested. The Cooperative did not obtain sealed bids or competitive proposals, nor was a circumstance met that would have allowed for a noncompetitive procurement for the purchases. The total dollar amount spent with all three vendors was $1,417,349. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No. Recommendation: Management of the Cooperative should develop written policies and procedures which would require that appropriate procurement methods are used for vendors that exceed the Simplified Acquisition Threshold. Appropriate documentation should be maintained to ensure the procurement methods are being followed and compliance with Procurement methods are being followed. Views of Responsible Officials and planned corrective actions: Management agrees with the finding and has prepared a corrective action plan.
Subject: Special Education Cluster (IDEA) - Procurement Federal Agency: Department of Education Federal Programs: Special Education Grants to States Assistance Listings Numbers: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-043-ARP; 23611-043-PN01; 24611-043-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Criteria: 2 CFR 200.303 states in part: The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (b) Formal Procurement Methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: . . . (1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bids method is the preferred method for procuring construction, if the conditions. . . . (2) Proposals. A procurement method in which either a fixed price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. . . ." Condition: The Cooperative did not obtain sealed bids or competitive proposals, nor was a circumstance met that would have allowed for a noncompetitive procurement for the purchases. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Cause: The Cooperative noted they were unaware of the procurement requirements of expenditures exceeding the Simplified Acquisition Threshold. They stated they have used the same vendors to provide professional services for several years but only recently started using federal grant award funds for the services. Effect or potential effect: Without the proper implementation of an effectively designed system of internal controls, the Cooperative cannot ensure the vendors paid with federal award funds are procured using the required methods. Without following the required methods for procurement, the Cooperative could be overpaying for services. Questioned Costs: There were no questioned costs identified. Context: The School Corporation is a member of the Northwest Indiana Special Education Cooperative (Cooperative). During fiscal year 2023-2024, the Cooperative operated the special education program and spent the federal money on behalf of all its members. As the grant agreement was between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. When the value of the procurement for property or services exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a nonfederal entity, formal procurement methods are required. The SAT is typically set at $250,000; however, Indiana Code 5-22-8 has a more restrictive threshold, and, therefore, the SAT threshold is set at $150,000. Formal procurement methods require adherence to documented procedures and formal methods such as sealed bids or proposals. During the fiscal year 2023-2024, the Cooperative had three vendors which exceeded the SAT and all three vendors were tested. The Cooperative did not obtain sealed bids or competitive proposals, nor was a circumstance met that would have allowed for a noncompetitive procurement for the purchases. The total dollar amount spent with all three vendors was $1,417,349. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No. Recommendation: Management of the Cooperative should develop written policies and procedures which would require that appropriate procurement methods are used for vendors that exceed the Simplified Acquisition Threshold. Appropriate documentation should be maintained to ensure the procurement methods are being followed and compliance with Procurement methods are being followed. Views of Responsible Officials and planned corrective actions: Management agrees with the finding and has prepared a corrective action plan.
Subject: Special Education Cluster (IDEA) - Procurement Federal Agency: Department of Education Federal Programs: Special Education Grants to States Assistance Listings Numbers: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-043-ARP; 23611-043-PN01; 24611-043-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Criteria: 2 CFR 200.303 states in part: The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (b) Formal Procurement Methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: . . . (1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bids method is the preferred method for procuring construction, if the conditions. . . . (2) Proposals. A procurement method in which either a fixed price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. . . ." Condition: The Cooperative did not obtain sealed bids or competitive proposals, nor was a circumstance met that would have allowed for a noncompetitive procurement for the purchases. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Cause: The Cooperative noted they were unaware of the procurement requirements of expenditures exceeding the Simplified Acquisition Threshold. They stated they have used the same vendors to provide professional services for several years but only recently started using federal grant award funds for the services. Effect or potential effect: Without the proper implementation of an effectively designed system of internal controls, the Cooperative cannot ensure the vendors paid with federal award funds are procured using the required methods. Without following the required methods for procurement, the Cooperative could be overpaying for services. Questioned Costs: There were no questioned costs identified. Context: The School Corporation is a member of the Northwest Indiana Special Education Cooperative (Cooperative). During fiscal year 2023-2024, the Cooperative operated the special education program and spent the federal money on behalf of all its members. As the grant agreement was between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. When the value of the procurement for property or services exceeds the simplified acquisition threshold (SAT), or a lower threshold established by a nonfederal entity, formal procurement methods are required. The SAT is typically set at $250,000; however, Indiana Code 5-22-8 has a more restrictive threshold, and, therefore, the SAT threshold is set at $150,000. Formal procurement methods require adherence to documented procedures and formal methods such as sealed bids or proposals. During the fiscal year 2023-2024, the Cooperative had three vendors which exceeded the SAT and all three vendors were tested. The Cooperative did not obtain sealed bids or competitive proposals, nor was a circumstance met that would have allowed for a noncompetitive procurement for the purchases. The total dollar amount spent with all three vendors was $1,417,349. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No. Recommendation: Management of the Cooperative should develop written policies and procedures which would require that appropriate procurement methods are used for vendors that exceed the Simplified Acquisition Threshold. Appropriate documentation should be maintained to ensure the procurement methods are being followed and compliance with Procurement methods are being followed. Views of Responsible Officials and planned corrective actions: Management agrees with the finding and has prepared a corrective action plan.
U.S. Department of Agriculture Federal Financial Assistance Listing # 10.565 All Awards Federal Financial Assistance Listing # 10.568 All Awards Food Distribution Cluster Activities Allowed/Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Criteria – 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition – As part of our audit, multiple payroll allocation errors were identified. It was determined that some errors resulted in overallocation of costs while others in underallocation of costs. Cause – No formal review of the allocations were completed before or after each payroll. This resulted in incorrect amounts being allocated to the programs. Effect – The failure to adequately review payroll allocations resulted in incorrect charges to the program. Questioned Costs – None Reported. Context/Sampling – A nonstatistical sample of 8 pay periods out of a population of 26 pay periods were selected for testing. 8 pay periods had an error. Repeat Finding from Prior Year(s) – Yes, Finding 2023-006. Recommendation – It is recommended that the Organization implement processes and controls to ensure that payroll allocations are reviewed and approved with each payroll processed. Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture Federal Financial Assistance Listing # 10.565 All Awards Federal Financial Assistance Listing # 10.568 All Awards Food Distribution Cluster Activities Allowed/Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Criteria – 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition – As part of our audit, multiple payroll allocation errors were identified. It was determined that some errors resulted in overallocation of costs while others in underallocation of costs. Cause – No formal review of the allocations were completed before or after each payroll. This resulted in incorrect amounts being allocated to the programs. Effect – The failure to adequately review payroll allocations resulted in incorrect charges to the program. Questioned Costs – None Reported. Context/Sampling – A nonstatistical sample of 8 pay periods out of a population of 26 pay periods were selected for testing. 8 pay periods had an error. Repeat Finding from Prior Year(s) – Yes, Finding 2023-006. Recommendation – It is recommended that the Organization implement processes and controls to ensure that payroll allocations are reviewed and approved with each payroll processed. Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture Federal Financial Assistance Listing # 10.565 All Awards Federal Financial Assistance Listing # 10.568 All Awards Food Distribution Cluster Activities Allowed/Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Criteria – 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition – As part of our audit, multiple payroll allocation errors were identified. It was determined that some errors resulted in overallocation of costs while others in underallocation of costs. Cause – No formal review of the allocations were completed before or after each payroll. This resulted in incorrect amounts being allocated to the programs. Effect – The failure to adequately review payroll allocations resulted in incorrect charges to the program. Questioned Costs – None Reported. Context/Sampling – A nonstatistical sample of 8 pay periods out of a population of 26 pay periods were selected for testing. 8 pay periods had an error. Repeat Finding from Prior Year(s) – Yes, Finding 2023-006. Recommendation – It is recommended that the Organization implement processes and controls to ensure that payroll allocations are reviewed and approved with each payroll processed. Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture Federal Financial Assistance Listing # 10.565 All Awards Federal Financial Assistance Listing # 10.568 All Awards Food Distribution Cluster Activities Allowed/Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Criteria – 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition – As part of our audit, multiple payroll allocation errors were identified. It was determined that some errors resulted in overallocation of costs while others in underallocation of costs. Cause – No formal review of the allocations were completed before or after each payroll. This resulted in incorrect amounts being allocated to the programs. Effect – The failure to adequately review payroll allocations resulted in incorrect charges to the program. Questioned Costs – None Reported. Context/Sampling – A nonstatistical sample of 8 pay periods out of a population of 26 pay periods were selected for testing. 8 pay periods had an error. Repeat Finding from Prior Year(s) – Yes, Finding 2023-006. Recommendation – It is recommended that the Organization implement processes and controls to ensure that payroll allocations are reviewed and approved with each payroll processed. Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture Federal Financial Assistance Listing # 10.565 All Awards Federal Financial Assistance Listing # 10.568 All Awards Food Distribution Cluster Activities Allowed/Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Criteria – 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition – As part of our audit, multiple payroll allocation errors were identified. It was determined that some errors resulted in overallocation of costs while others in underallocation of costs. Cause – No formal review of the allocations were completed before or after each payroll. This resulted in incorrect amounts being allocated to the programs. Effect – The failure to adequately review payroll allocations resulted in incorrect charges to the program. Questioned Costs – None Reported. Context/Sampling – A nonstatistical sample of 8 pay periods out of a population of 26 pay periods were selected for testing. 8 pay periods had an error. Repeat Finding from Prior Year(s) – Yes, Finding 2023-006. Recommendation – It is recommended that the Organization implement processes and controls to ensure that payroll allocations are reviewed and approved with each payroll processed. Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture Federal Financial Assistance Listing # 10.565 All Awards Federal Financial Assistance Listing # 10.568 All Awards Food Distribution Cluster Activities Allowed/Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Criteria – 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition – As part of our audit, multiple payroll allocation errors were identified. It was determined that some errors resulted in overallocation of costs while others in underallocation of costs. Cause – No formal review of the allocations were completed before or after each payroll. This resulted in incorrect amounts being allocated to the programs. Effect – The failure to adequately review payroll allocations resulted in incorrect charges to the program. Questioned Costs – None Reported. Context/Sampling – A nonstatistical sample of 8 pay periods out of a population of 26 pay periods were selected for testing. 8 pay periods had an error. Repeat Finding from Prior Year(s) – Yes, Finding 2023-006. Recommendation – It is recommended that the Organization implement processes and controls to ensure that payroll allocations are reviewed and approved with each payroll processed. Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture Federal Financial Assistance Listing # 10.568 All Awards Federal Financial Assistance Listing # 10.569 All Awards Food Distribution Cluster Eligibility Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria – 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. This includes a process to ensure proper completion of all tracking forms and documentation, including documented reviews in relation to eligibility. Condition – During our review of the eligibility determinations, it was identified that there were various instances where applications or other eligibility determinations and reviews were not completed timely or accurately. The files were missing the documented processes or were completed after the prior form’s expiration dates. Cause – Due to oversight by management, all forms were not completed and documented within participant files. This was largely due to differences in fiscal years, calendar years, and terms of the applications and certifications not being appropriately considered when completing and monitoring the various eligibility documents. Effect – The Organization’s internal control process was not appropriately enforced and monitored, resulting in lack of timely documentation of eligibility determination. However, it is noted that the agencies were subsequently determined to be eligible for the program. Questioned Costs – $249,549. Context/Sampling – A nonstatistical sample of 31 participating agencies within TEFAP out of a population of 157 were selected for eligibility testing. 4 out of the 31 eligibility determinations tested had an error, with 3 of those resulting in questioned costs, as reported above. Repeat Finding from Prior Year(s) – Yes, Finding 2023-005. Recommendation – Management should review internal control procedures to ensure all eligibility determination reviews are documented and retained in the file and consideration is appropriately given to fiscal year, calendar year, and application terms. Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture Federal Financial Assistance Listing # 10.568 All Awards Federal Financial Assistance Listing # 10.569 All Awards Food Distribution Cluster Eligibility Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria – 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. This includes a process to ensure proper completion of all tracking forms and documentation, including documented reviews in relation to eligibility. Condition – During our review of the eligibility determinations, it was identified that there were various instances where applications or other eligibility determinations and reviews were not completed timely or accurately. The files were missing the documented processes or were completed after the prior form’s expiration dates. Cause – Due to oversight by management, all forms were not completed and documented within participant files. This was largely due to differences in fiscal years, calendar years, and terms of the applications and certifications not being appropriately considered when completing and monitoring the various eligibility documents. Effect – The Organization’s internal control process was not appropriately enforced and monitored, resulting in lack of timely documentation of eligibility determination. However, it is noted that the agencies were subsequently determined to be eligible for the program. Questioned Costs – $249,549. Context/Sampling – A nonstatistical sample of 31 participating agencies within TEFAP out of a population of 157 were selected for eligibility testing. 4 out of the 31 eligibility determinations tested had an error, with 3 of those resulting in questioned costs, as reported above. Repeat Finding from Prior Year(s) – Yes, Finding 2023-005. Recommendation – Management should review internal control procedures to ensure all eligibility determination reviews are documented and retained in the file and consideration is appropriately given to fiscal year, calendar year, and application terms. Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture Federal Financial Assistance Listing # 10.568 All Awards Federal Financial Assistance Listing # 10.569 All Awards Food Distribution Cluster Eligibility Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria – 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. This includes a process to ensure proper completion of all tracking forms and documentation, including documented reviews in relation to eligibility. Condition – During our review of the eligibility determinations, it was identified that there were various instances where applications or other eligibility determinations and reviews were not completed timely or accurately. The files were missing the documented processes or were completed after the prior form’s expiration dates. Cause – Due to oversight by management, all forms were not completed and documented within participant files. This was largely due to differences in fiscal years, calendar years, and terms of the applications and certifications not being appropriately considered when completing and monitoring the various eligibility documents. Effect – The Organization’s internal control process was not appropriately enforced and monitored, resulting in lack of timely documentation of eligibility determination. However, it is noted that the agencies were subsequently determined to be eligible for the program. Questioned Costs – $249,549. Context/Sampling – A nonstatistical sample of 31 participating agencies within TEFAP out of a population of 157 were selected for eligibility testing. 4 out of the 31 eligibility determinations tested had an error, with 3 of those resulting in questioned costs, as reported above. Repeat Finding from Prior Year(s) – Yes, Finding 2023-005. Recommendation – Management should review internal control procedures to ensure all eligibility determination reviews are documented and retained in the file and consideration is appropriately given to fiscal year, calendar year, and application terms. Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture Federal Financial Assistance Listing # 10.568 All Awards Federal Financial Assistance Listing # 10.569 All Awards Food Distribution Cluster Eligibility Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria – 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. This includes a process to ensure proper completion of all tracking forms and documentation, including documented reviews in relation to eligibility. Condition – During our review of the eligibility determinations, it was identified that there were various instances where applications or other eligibility determinations and reviews were not completed timely or accurately. The files were missing the documented processes or were completed after the prior form’s expiration dates. Cause – Due to oversight by management, all forms were not completed and documented within participant files. This was largely due to differences in fiscal years, calendar years, and terms of the applications and certifications not being appropriately considered when completing and monitoring the various eligibility documents. Effect – The Organization’s internal control process was not appropriately enforced and monitored, resulting in lack of timely documentation of eligibility determination. However, it is noted that the agencies were subsequently determined to be eligible for the program. Questioned Costs – $249,549. Context/Sampling – A nonstatistical sample of 31 participating agencies within TEFAP out of a population of 157 were selected for eligibility testing. 4 out of the 31 eligibility determinations tested had an error, with 3 of those resulting in questioned costs, as reported above. Repeat Finding from Prior Year(s) – Yes, Finding 2023-005. Recommendation – Management should review internal control procedures to ensure all eligibility determination reviews are documented and retained in the file and consideration is appropriately given to fiscal year, calendar year, and application terms. Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture Federal Financial Assistance Listing # 10.568 All Awards Federal Financial Assistance Listing # 10.569 All Awards Food Distribution Cluster Eligibility Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria – 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. This includes a process to ensure proper completion of all tracking forms and documentation, including documented reviews in relation to eligibility. Condition – During our review of the eligibility determinations, it was identified that there were various instances where applications or other eligibility determinations and reviews were not completed timely or accurately. The files were missing the documented processes or were completed after the prior form’s expiration dates. Cause – Due to oversight by management, all forms were not completed and documented within participant files. This was largely due to differences in fiscal years, calendar years, and terms of the applications and certifications not being appropriately considered when completing and monitoring the various eligibility documents. Effect – The Organization’s internal control process was not appropriately enforced and monitored, resulting in lack of timely documentation of eligibility determination. However, it is noted that the agencies were subsequently determined to be eligible for the program. Questioned Costs – $249,549. Context/Sampling – A nonstatistical sample of 31 participating agencies within TEFAP out of a population of 157 were selected for eligibility testing. 4 out of the 31 eligibility determinations tested had an error, with 3 of those resulting in questioned costs, as reported above. Repeat Finding from Prior Year(s) – Yes, Finding 2023-005. Recommendation – Management should review internal control procedures to ensure all eligibility determination reviews are documented and retained in the file and consideration is appropriately given to fiscal year, calendar year, and application terms. Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Agriculture Federal Financial Assistance Listing # 10.568 All Awards Federal Financial Assistance Listing # 10.569 All Awards Food Distribution Cluster Eligibility Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria – 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. This includes a process to ensure proper completion of all tracking forms and documentation, including documented reviews in relation to eligibility. Condition – During our review of the eligibility determinations, it was identified that there were various instances where applications or other eligibility determinations and reviews were not completed timely or accurately. The files were missing the documented processes or were completed after the prior form’s expiration dates. Cause – Due to oversight by management, all forms were not completed and documented within participant files. This was largely due to differences in fiscal years, calendar years, and terms of the applications and certifications not being appropriately considered when completing and monitoring the various eligibility documents. Effect – The Organization’s internal control process was not appropriately enforced and monitored, resulting in lack of timely documentation of eligibility determination. However, it is noted that the agencies were subsequently determined to be eligible for the program. Questioned Costs – $249,549. Context/Sampling – A nonstatistical sample of 31 participating agencies within TEFAP out of a population of 157 were selected for eligibility testing. 4 out of the 31 eligibility determinations tested had an error, with 3 of those resulting in questioned costs, as reported above. Repeat Finding from Prior Year(s) – Yes, Finding 2023-005. Recommendation – Management should review internal control procedures to ensure all eligibility determination reviews are documented and retained in the file and consideration is appropriately given to fiscal year, calendar year, and application terms. Views of Responsible Officials – Management agrees with the finding.
Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Program, School Summer Food Service Program, Fresh Fruit and Vegetable Program Assistance Listing Number: 10.553, 10.555, 10.559, 10.582 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the eligibility compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with eligibility requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: During testing over controls for eligibility, we noted there was no formal, secondary review for the applications entered in the food service software determining eligibility. Additionally, there was no documented annual review by School Corporation personnel of the FY23 income eligibility guidelines used by the food service software. The School Corporation did formally review the FY24 income eligibility guidelines used in the food service software. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and eligibility compliance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Program, School Summer Food Service Program, Fresh Fruit and Vegetable Program Assistance Listing Number: 10.553, 10.555, 10.559, 10.582 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the eligibility compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with eligibility requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: During testing over controls for eligibility, we noted there was no formal, secondary review for the applications entered in the food service software determining eligibility. Additionally, there was no documented annual review by School Corporation personnel of the FY23 income eligibility guidelines used by the food service software. The School Corporation did formally review the FY24 income eligibility guidelines used in the food service software. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and eligibility compliance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Program, School Summer Food Service Program, Fresh Fruit and Vegetable Program Assistance Listing Number: 10.553, 10.555, 10.559, 10.582 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the eligibility compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with eligibility requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: During testing over controls for eligibility, we noted there was no formal, secondary review for the applications entered in the food service software determining eligibility. Additionally, there was no documented annual review by School Corporation personnel of the FY23 income eligibility guidelines used by the food service software. The School Corporation did formally review the FY24 income eligibility guidelines used in the food service software. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and eligibility compliance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Program, School Summer Food Service Program, Fresh Fruit and Vegetable Program Assistance Listing Number: 10.553, 10.555, 10.559, 10.582 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the eligibility compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with eligibility requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: During testing over controls for eligibility, we noted there was no formal, secondary review for the applications entered in the food service software determining eligibility. Additionally, there was no documented annual review by School Corporation personnel of the FY23 income eligibility guidelines used by the food service software. The School Corporation did formally review the FY24 income eligibility guidelines used in the food service software. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and eligibility compliance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Program, School Summer Food Service Program, Fresh Fruit and Vegetable Program Assistance Listing Number: 10.553, 10.555, 10.559, 10.582 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the eligibility compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with eligibility requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: During testing over controls for eligibility, we noted there was no formal, secondary review for the applications entered in the food service software determining eligibility. Additionally, there was no documented annual review by School Corporation personnel of the FY23 income eligibility guidelines used by the food service software. The School Corporation did formally review the FY24 income eligibility guidelines used in the food service software. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and eligibility compliance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Program, School Summer Food Service Program, Fresh Fruit and Vegetable Program Assistance Listing Number: 10.553, 10.555, 10.559, 10.582 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the eligibility compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with eligibility requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: During testing over controls for eligibility, we noted there was no formal, secondary review for the applications entered in the food service software determining eligibility. Additionally, there was no documented annual review by School Corporation personnel of the FY23 income eligibility guidelines used by the food service software. The School Corporation did formally review the FY24 income eligibility guidelines used in the food service software. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and eligibility compliance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Subject: Child Nutrition Cluster – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, Fresh Fruit and Vegetable Program Assistance Listing Number: 10.553, 10.555, 10.559, 10.582 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Significant Deficiency Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the two small purchase method procurements sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. Additionally, the School Corporation did not perform a suspension and debarment check on the vendors. The sample items were for $76,200 and $31,639 worth of repair supplies in FY2023 and FY2024, respectively. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-003. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Additionally, we recommend management monitor annual vendor activity to ensure vendors that exceed small purchase threshold and suspension and debarment threshold in aggregate are reviewed for potential analysis and suspension and debarment checks required by federal and state regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Subject: Child Nutrition Cluster – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, Fresh Fruit and Vegetable Program Assistance Listing Number: 10.553, 10.555, 10.559, 10.582 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Significant Deficiency Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the two small purchase method procurements sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. Additionally, the School Corporation did not perform a suspension and debarment check on the vendors. The sample items were for $76,200 and $31,639 worth of repair supplies in FY2023 and FY2024, respectively. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-003. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Additionally, we recommend management monitor annual vendor activity to ensure vendors that exceed small purchase threshold and suspension and debarment threshold in aggregate are reviewed for potential analysis and suspension and debarment checks required by federal and state regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Subject: Child Nutrition Cluster – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, Fresh Fruit and Vegetable Program Assistance Listing Number: 10.553, 10.555, 10.559, 10.582 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Significant Deficiency Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the two small purchase method procurements sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. Additionally, the School Corporation did not perform a suspension and debarment check on the vendors. The sample items were for $76,200 and $31,639 worth of repair supplies in FY2023 and FY2024, respectively. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-003. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Additionally, we recommend management monitor annual vendor activity to ensure vendors that exceed small purchase threshold and suspension and debarment threshold in aggregate are reviewed for potential analysis and suspension and debarment checks required by federal and state regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.