Federal Agency: U.S. Department of Education Federal Program Name: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010 Federal Award Identification Number and Year: S010A210020 S010A220020 S010A230020 S010A220020 S010A210020 S010A220020 S010A230020 Pass-Through Agency: Maryland Department of Education (MSDE) Pass-Through Number(s): 221499-01 231095-01 241282-01 231255-01 232028-01 231992-01 241671-01 Award Period: 7/1/2021–9/30/2023 7/1/2022–9/30/2024 7/1/2023–9/30/2024 7/1/2022–9/30/2024 3/1/2023–9/30/2023 3/1/2023–9/30/2024 7/1/2023–9/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: Per ESEA sections 1111(h)(1)(C)(iii)(II) and 8101(23), (25) (20 USC 6311(h)(1)(C)(iii)(II) and 7801(23), (25))), in order to remove a student from the cohort, a school or LEA must confirm, in writing, that the student transferred out, emigrated to another country, transferred to a prison or juvenile facility, or is deceased. To confirm that a student transferred out, the school or LEA must have official written documentation that the student enrolled in another school or in an educational program that culminates in the award of a regular high school diploma. A student who is retained in grade, enrolls in a GED program, or leaves school for any other reason may not be counted as having transferred out for the purpose of calculating graduation rate and must remain in the adjusted cohort. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: For six out of eighteen samples tested, the Board did not maintain documentation to support the students’ withdrawal and/or evidence of the school’s review and approval of the student’s withdrawal that was reported to Maryland State Department of Education (MSDE). MSDE requires the Board to provide data for students that no longer attend a school in the district. The data is used to determine if the Board's graduation rate is affected because of the student’s departure. Questioned costs: Undeterminable. Cause: The Board did not retain documentation supporting student withdrawal codes as required by the grant. Effect: The Board's graduation rate may be improperly calculated if the data provided to the State is inaccurate. Repeat Finding: Yes, refer to prior year finding 2023-004. Recommendation: We recommend that the Board continue with established policies and procedures implemented in October 2023 to ensure that it obtains documentation to support student withdrawals and that this documentation is available for audit purposes. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Education Federal Program Name: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010 Federal Award Identification Number and Year: S010A210020 S010A220020 S010A230020 S010A220020 S010A210020 S010A220020 S010A230020 Pass-Through Agency: Maryland Department of Education (MSDE) Pass-Through Number(s): 221499-01 231095-01 241282-01 231255-01 232028-01 231992-01 241671-01 Award Period: 7/1/2021–9/30/2023 7/1/2022–9/30/2024 7/1/2023–9/30/2024 7/1/2022–9/30/2024 3/1/2023–9/30/2023 3/1/2023–9/30/2024 7/1/2023–9/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: Per ESEA sections 1111(h)(1)(C)(iii)(II) and 8101(23), (25) (20 USC 6311(h)(1)(C)(iii)(II) and 7801(23), (25))), in order to remove a student from the cohort, a school or LEA must confirm, in writing, that the student transferred out, emigrated to another country, transferred to a prison or juvenile facility, or is deceased. To confirm that a student transferred out, the school or LEA must have official written documentation that the student enrolled in another school or in an educational program that culminates in the award of a regular high school diploma. A student who is retained in grade, enrolls in a GED program, or leaves school for any other reason may not be counted as having transferred out for the purpose of calculating graduation rate and must remain in the adjusted cohort. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: For six out of eighteen samples tested, the Board did not maintain documentation to support the students’ withdrawal and/or evidence of the school’s review and approval of the student’s withdrawal that was reported to Maryland State Department of Education (MSDE). MSDE requires the Board to provide data for students that no longer attend a school in the district. The data is used to determine if the Board's graduation rate is affected because of the student’s departure. Questioned costs: Undeterminable. Cause: The Board did not retain documentation supporting student withdrawal codes as required by the grant. Effect: The Board's graduation rate may be improperly calculated if the data provided to the State is inaccurate. Repeat Finding: Yes, refer to prior year finding 2023-004. Recommendation: We recommend that the Board continue with established policies and procedures implemented in October 2023 to ensure that it obtains documentation to support student withdrawals and that this documentation is available for audit purposes. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Education Federal Program Name: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010 Federal Award Identification Number and Year: S010A210020 S010A220020 S010A230020 S010A220020 S010A210020 S010A220020 S010A230020 Pass-Through Agency: Maryland Department of Education (MSDE) Pass-Through Number(s): 221499-01 231095-01 241282-01 231255-01 232028-01 231992-01 241671-01 Award Period: 7/1/2021–9/30/2023 7/1/2022–9/30/2024 7/1/2023–9/30/2024 7/1/2022–9/30/2024 3/1/2023–9/30/2023 3/1/2023–9/30/2024 7/1/2023–9/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: Per ESEA sections 1111(h)(1)(C)(iii)(II) and 8101(23), (25) (20 USC 6311(h)(1)(C)(iii)(II) and 7801(23), (25))), in order to remove a student from the cohort, a school or LEA must confirm, in writing, that the student transferred out, emigrated to another country, transferred to a prison or juvenile facility, or is deceased. To confirm that a student transferred out, the school or LEA must have official written documentation that the student enrolled in another school or in an educational program that culminates in the award of a regular high school diploma. A student who is retained in grade, enrolls in a GED program, or leaves school for any other reason may not be counted as having transferred out for the purpose of calculating graduation rate and must remain in the adjusted cohort. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: For six out of eighteen samples tested, the Board did not maintain documentation to support the students’ withdrawal and/or evidence of the school’s review and approval of the student’s withdrawal that was reported to Maryland State Department of Education (MSDE). MSDE requires the Board to provide data for students that no longer attend a school in the district. The data is used to determine if the Board's graduation rate is affected because of the student’s departure. Questioned costs: Undeterminable. Cause: The Board did not retain documentation supporting student withdrawal codes as required by the grant. Effect: The Board's graduation rate may be improperly calculated if the data provided to the State is inaccurate. Repeat Finding: Yes, refer to prior year finding 2023-004. Recommendation: We recommend that the Board continue with established policies and procedures implemented in October 2023 to ensure that it obtains documentation to support student withdrawals and that this documentation is available for audit purposes. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Education Federal Program Name: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010 Federal Award Identification Number and Year: S010A210020 S010A220020 S010A230020 S010A220020 S010A210020 S010A220020 S010A230020 Pass-Through Agency: Maryland Department of Education (MSDE) Pass-Through Number(s): 221499-01 231095-01 241282-01 231255-01 232028-01 231992-01 241671-01 Award Period: 7/1/2021–9/30/2023 7/1/2022–9/30/2024 7/1/2023–9/30/2024 7/1/2022–9/30/2024 3/1/2023–9/30/2023 3/1/2023–9/30/2024 7/1/2023–9/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: Per ESEA sections 1111(h)(1)(C)(iii)(II) and 8101(23), (25) (20 USC 6311(h)(1)(C)(iii)(II) and 7801(23), (25))), in order to remove a student from the cohort, a school or LEA must confirm, in writing, that the student transferred out, emigrated to another country, transferred to a prison or juvenile facility, or is deceased. To confirm that a student transferred out, the school or LEA must have official written documentation that the student enrolled in another school or in an educational program that culminates in the award of a regular high school diploma. A student who is retained in grade, enrolls in a GED program, or leaves school for any other reason may not be counted as having transferred out for the purpose of calculating graduation rate and must remain in the adjusted cohort. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: For six out of eighteen samples tested, the Board did not maintain documentation to support the students’ withdrawal and/or evidence of the school’s review and approval of the student’s withdrawal that was reported to Maryland State Department of Education (MSDE). MSDE requires the Board to provide data for students that no longer attend a school in the district. The data is used to determine if the Board's graduation rate is affected because of the student’s departure. Questioned costs: Undeterminable. Cause: The Board did not retain documentation supporting student withdrawal codes as required by the grant. Effect: The Board's graduation rate may be improperly calculated if the data provided to the State is inaccurate. Repeat Finding: Yes, refer to prior year finding 2023-004. Recommendation: We recommend that the Board continue with established policies and procedures implemented in October 2023 to ensure that it obtains documentation to support student withdrawals and that this documentation is available for audit purposes. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Education Federal Program Name: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010 Federal Award Identification Number and Year: S010A210020 S010A220020 S010A230020 S010A220020 S010A210020 S010A220020 S010A230020 Pass-Through Agency: Maryland Department of Education (MSDE) Pass-Through Number(s): 221499-01 231095-01 241282-01 231255-01 232028-01 231992-01 241671-01 Award Period: 7/1/2021–9/30/2023 7/1/2022–9/30/2024 7/1/2023–9/30/2024 7/1/2022–9/30/2024 3/1/2023–9/30/2023 3/1/2023–9/30/2024 7/1/2023–9/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: Per ESEA sections 1111(h)(1)(C)(iii)(II) and 8101(23), (25) (20 USC 6311(h)(1)(C)(iii)(II) and 7801(23), (25))), in order to remove a student from the cohort, a school or LEA must confirm, in writing, that the student transferred out, emigrated to another country, transferred to a prison or juvenile facility, or is deceased. To confirm that a student transferred out, the school or LEA must have official written documentation that the student enrolled in another school or in an educational program that culminates in the award of a regular high school diploma. A student who is retained in grade, enrolls in a GED program, or leaves school for any other reason may not be counted as having transferred out for the purpose of calculating graduation rate and must remain in the adjusted cohort. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: For six out of eighteen samples tested, the Board did not maintain documentation to support the students’ withdrawal and/or evidence of the school’s review and approval of the student’s withdrawal that was reported to Maryland State Department of Education (MSDE). MSDE requires the Board to provide data for students that no longer attend a school in the district. The data is used to determine if the Board's graduation rate is affected because of the student’s departure. Questioned costs: Undeterminable. Cause: The Board did not retain documentation supporting student withdrawal codes as required by the grant. Effect: The Board's graduation rate may be improperly calculated if the data provided to the State is inaccurate. Repeat Finding: Yes, refer to prior year finding 2023-004. Recommendation: We recommend that the Board continue with established policies and procedures implemented in October 2023 to ensure that it obtains documentation to support student withdrawals and that this documentation is available for audit purposes. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Education Federal Program Name: Title III English Language Acquisition State Grant Assistance Listing Number: 84.365 Federal Award Identification Number and Year: S365A220020 Pass-Through Agency: Maryland Department of Education (MSDE) Pass-Through Number(s): 241230-02 Award Period: 7/1/2022–9/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR Section 200.430 (8)(i) Standards for Documentation of Personnel Expenses states that: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (vi) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (vii) Be incorporated into the official records of the non-Federal entity; (viii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (ix) Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (x) Comply with the established accounting policies and practices of the non-Federal entity; (viii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: For three of forty timesheets selected for testing, the Board was unable to provide documentation to substantiate that the time and effort was dedicated to the federal program. The Board did not have effective controls in place for monitoring and obtaining adequate support to validate actual payroll expenses charged to the federal program. Questioned costs: $15,233 Cause: Controls were not operating effectively to ensure that time and effort reporting was performed and documented in a timely manner, in accordance with federal requirements. Effect: There is an increased risk of charging unallowed payroll costs to the program. Repeat Finding: No. Recommendation: We recommend that the Board reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Board should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Documentation should be readily available for audit. Views of responsible officials: There is no disagreement with the audit finding.
Assistance Listing Number, Federal Agency, and Program Name - 84.007, 84.063, 84.268; U.S. Department of Education; Federal Supplemental Educational Opportunity Grants, Federal Pell Grant Program, Federal Direct Student Loans Federal Award Identification Number and Year - P007A236053, P063P232857, P268K242857; 2023-2024 Pass through Entity - N/A Finding Type - Material weakness Repeat Finding - No Criteria - In accordance with 2 CFR 200.303, the College must establish and maintain effective internal control over its federal awards in order to provide reasonable assurance that it is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Specific to these Title IV programs, 34 CFR 668.22 outlines the requirements for insitutions to follow when returns of Title IV funds are required, including identifying when calculations are necessary and the time frame in which they are required to be returned. Condition - There was a lack of internal controls in place related to the return of Title IV funds. Questioned Costs - N/A Identification of How Questioned Costs Were Computed - N/A Context - Once return calculations were identified and calculated, there were no controls in place to ensure that the calculations were complete, accurate, or returned in a timely manner. Cause and Effect - A lack of review of the processes to identify students who required a calculation, the completed calculations for accuracy, or ensure that that all calculated returns were completed could lead to incomplete calculations, inaccurate calculations, or untimely return of funds once they are identified. Recommendation - We recommend that the College implement a review control that would cover each stage of the return process outlined. Views of Responsible Officials and Corrective Action Plan - The College will implement controls related to returns of Title IV funds to ensure the related calculations are complete and accurate and that the funds are returned in a timely manner.
Assistance Listing Number, Federal Agency, and Program Name - 84.007, 84.063, 84.268; U.S. Department of Education; Federal Supplemental Educational Opportunity Grants, Federal Pell Grant Program, Federal Direct Student Loans Federal Award Identification Number and Year - P007A236053, P063P232857, P268K242857; 2023-2024 Pass through Entity - N/A Finding Type - Material weakness Repeat Finding - No Criteria - In accordance with 2 CFR 200.303, the College must establish and maintain effective internal control over its federal awards in order to provide reasonable assurance that it is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Specific to these Title IV programs, 34 CFR 668.22 outlines the requirements for insitutions to follow when returns of Title IV funds are required, including identifying when calculations are necessary and the time frame in which they are required to be returned. Condition - There was a lack of internal controls in place related to the return of Title IV funds. Questioned Costs - N/A Identification of How Questioned Costs Were Computed - N/A Context - Once return calculations were identified and calculated, there were no controls in place to ensure that the calculations were complete, accurate, or returned in a timely manner. Cause and Effect - A lack of review of the processes to identify students who required a calculation, the completed calculations for accuracy, or ensure that that all calculated returns were completed could lead to incomplete calculations, inaccurate calculations, or untimely return of funds once they are identified. Recommendation - We recommend that the College implement a review control that would cover each stage of the return process outlined. Views of Responsible Officials and Corrective Action Plan - The College will implement controls related to returns of Title IV funds to ensure the related calculations are complete and accurate and that the funds are returned in a timely manner.
Assistance Listing Number, Federal Agency, and Program Name - 84.007, 84.063, 84.268; U.S. Department of Education; Federal Supplemental Educational Opportunity Grants, Federal Pell Grant Program, Federal Direct Student Loans Federal Award Identification Number and Year - P007A236053, P063P232857, P268K242857; 2023-2024 Pass through Entity - N/A Finding Type - Material weakness Repeat Finding - No Criteria - In accordance with 2 CFR 200.303, the College must establish and maintain effective internal control over its federal awards in order to provide reasonable assurance that it is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Specific to these Title IV programs, 34 CFR 668.22 outlines the requirements for insitutions to follow when returns of Title IV funds are required, including identifying when calculations are necessary and the time frame in which they are required to be returned. Condition - There was a lack of internal controls in place related to the return of Title IV funds. Questioned Costs - N/A Identification of How Questioned Costs Were Computed - N/A Context - Once return calculations were identified and calculated, there were no controls in place to ensure that the calculations were complete, accurate, or returned in a timely manner. Cause and Effect - A lack of review of the processes to identify students who required a calculation, the completed calculations for accuracy, or ensure that that all calculated returns were completed could lead to incomplete calculations, inaccurate calculations, or untimely return of funds once they are identified. Recommendation - We recommend that the College implement a review control that would cover each stage of the return process outlined. Views of Responsible Officials and Corrective Action Plan - The College will implement controls related to returns of Title IV funds to ensure the related calculations are complete and accurate and that the funds are returned in a timely manner.
Assistance Listing Number, Federal Agency, and Program Name - 84.007, 84.033; U.S. Department of Education; Federal Supplemental Educational Opportunity Grants (FSEOG), Federal Work-Study Program (FWS) Federal Award Identification Number and Year - P007A236053, P033A236053; 2023-2024 Pass through Entity - N/A Finding Type - Material weakness Repeat Finding - No Criteria - In accordance with 2 CFR 200.303, the College must establish and maintain effective internal controls over its federal awards in order to provide reasonable assurance that it is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Specific to these Title IV programs, 34 CFR 675.19(b)(3) (FWS) and 34 CFR 676.19(b)(3) (FSEOG) outline the requirement for institutions to submit a Fiscal Operations Report (FISAP). Condition - There was a lack of internal controls in place related to the review of the FISAP that was submitted by the College in September 2023. Questioned Costs - N/A Identification of How Questioned Costs Were Computed - N/A Context - Once the FISAP was prepared, there was no control in place ensure that the information included in the report was accurate. Cause and Effect - A lack of review of the completed report prior to submission could lead to inaccurate information being reported to the U.S. Department of Education. Recommendation - We recommend that the College implement a level of review of the report prior to submission. Views of Responsible Officials and Planned Corrective Actions - The College will establish the proper controls to ensure that the information included in the FISAP is accurate, including implementing an additional level of review of the report.
Assistance Listing Number, Federal Agency, and Program Name - 84.007, 84.033; U.S. Department of Education; Federal Supplemental Educational Opportunity Grants (FSEOG), Federal Work-Study Program (FWS) Federal Award Identification Number and Year - P007A236053, P033A236053; 2023-2024 Pass through Entity - N/A Finding Type - Material weakness Repeat Finding - No Criteria - In accordance with 2 CFR 200.303, the College must establish and maintain effective internal controls over its federal awards in order to provide reasonable assurance that it is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Specific to these Title IV programs, 34 CFR 675.19(b)(3) (FWS) and 34 CFR 676.19(b)(3) (FSEOG) outline the requirement for institutions to submit a Fiscal Operations Report (FISAP). Condition - There was a lack of internal controls in place related to the review of the FISAP that was submitted by the College in September 2023. Questioned Costs - N/A Identification of How Questioned Costs Were Computed - N/A Context - Once the FISAP was prepared, there was no control in place ensure that the information included in the report was accurate. Cause and Effect - A lack of review of the completed report prior to submission could lead to inaccurate information being reported to the U.S. Department of Education. Recommendation - We recommend that the College implement a level of review of the report prior to submission. Views of Responsible Officials and Planned Corrective Actions - The College will establish the proper controls to ensure that the information included in the FISAP is accurate, including implementing an additional level of review of the report.
FINDING 2024-001 Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24 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). . . ." 7 CFR 245.3(c) sates 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. 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 the testing of internal controls over eligibility determinations for free and reduced meals, we noted there was no formal review control in place. There is no documented, secondary review for the applications entered in the food service software which determines eligibility. Additionally, there was no documented review by School Corporation personnel of the Income Eligibility Guidelines used by the food service software which are updated on annual basis. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation's management establish an internal control process to review the updates to the annual adjustments to the Income Eligibility Guidelines made to the food service software to determine eligibility to ensure updated guidelines are accurate and complete. This review should be documented on annual basis to confirm management’s oversight and monitoring of eligibility determinations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-001 Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24 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). . . ." 7 CFR 245.3(c) sates 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. 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 the testing of internal controls over eligibility determinations for free and reduced meals, we noted there was no formal review control in place. There is no documented, secondary review for the applications entered in the food service software which determines eligibility. Additionally, there was no documented review by School Corporation personnel of the Income Eligibility Guidelines used by the food service software which are updated on annual basis. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation's management establish an internal control process to review the updates to the annual adjustments to the Income Eligibility Guidelines made to the food service software to determine eligibility to ensure updated guidelines are accurate and complete. This review should be documented on annual basis to confirm management’s oversight and monitoring of eligibility determinations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-001 Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24 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). . . ." 7 CFR 245.3(c) sates 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. 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 the testing of internal controls over eligibility determinations for free and reduced meals, we noted there was no formal review control in place. There is no documented, secondary review for the applications entered in the food service software which determines eligibility. Additionally, there was no documented review by School Corporation personnel of the Income Eligibility Guidelines used by the food service software which are updated on annual basis. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation's management establish an internal control process to review the updates to the annual adjustments to the Income Eligibility Guidelines made to the food service software to determine eligibility to ensure updated guidelines are accurate and complete. This review should be documented on annual basis to confirm management’s oversight and monitoring of eligibility determinations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Assistance Listing, Federal Agency, and Program Name - 14.267, U.S. Department of Housing and Urban Development, Continuum of Care Program Federal Award Identification Number and Year - MI0429L5F012209, and MI0030L5F012215 (direct funded); 20230256-00, 20240559-00, MI0074L5F012114, and MI0074L5F012215 (pass-through funded) Pass through Entity - Michigan Department of Health and Human Services, Neighborhood Service Organization, and Detroit Wayne Integrated Health Network Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.303(a), a non federal entity must 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. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition - The Organization lacked sufficient controls to ensure consistent reviews/approvals of monthly reimbursement requests and tenant rent calculations throughout the year. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The review and approval of the monthly reimbursement requests and the tenant calculation serve to prevent and detect and correct noncompliance specific to the following compliance categories: period of performance, earmarking, program income and rent reasonableness. Each grant requests reimbursement for expenses incurred on a monthly basis. The review of the monthly reimbursement request, including supporting documentation, verifies that the costs are within the period of performance, administrative costs did not exceed 10 percent, and use of program income is consistent with grant terms. The review of the tenant rental calculations, including tenant rent calculation worksheet, verifies that the amount charged to participants is calculated and charged appropriately and the associated program income is identified and tracked appropriately. Based on the testing performed, the audit procedures identified that in 5 out of the 12 months there was not evidence of review for monthly reimbursement requests for one or more of the programs. Testing also identified that 4 out of a sample of 35 tenant rent calculations did not have evidence of review. Cause and Effect - The controls in place to ensure period of performance, earmarking, program income, and rent reasonableness are reviewed for completeness and accuracy were not in place. The lack of controls could result in an instance of noncompliance not being identified. Recommendation - We recommend the Organization ensure controls are in place to ensure the monthly reimbursement requests and the tenant rent calculations are reviewed for completeness and accuracy and for compliance with period of performance, earmarking, program income and rent reasonableness. Views of Responsible Officials and Corrective Action Plan - Effective immediately, the accounting director or rent analyst will review and approve the monthly reimbursement requests and rent calculations.
Assistance Listing, Federal Agency, and Program Name - 14.267, U.S. Department of Housing and Urban Development, Continuum of Care Program Federal Award Identification Number and Year - MI0429L5F012209, and MI0030L5F012215 (direct funded); 20230256-00, 20240559-00, MI0074L5F012114, and MI0074L5F012215 (pass-through funded) Pass through Entity - Michigan Department of Health and Human Services, Neighborhood Service Organization, and Detroit Wayne Integrated Health Network Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.303(a), a non federal entity must 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. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition - The Organization lacked sufficient controls to ensure consistent reviews/approvals of monthly reimbursement requests and tenant rent calculations throughout the year. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The review and approval of the monthly reimbursement requests and the tenant calculation serve to prevent and detect and correct noncompliance specific to the following compliance categories: period of performance, earmarking, program income and rent reasonableness. Each grant requests reimbursement for expenses incurred on a monthly basis. The review of the monthly reimbursement request, including supporting documentation, verifies that the costs are within the period of performance, administrative costs did not exceed 10 percent, and use of program income is consistent with grant terms. The review of the tenant rental calculations, including tenant rent calculation worksheet, verifies that the amount charged to participants is calculated and charged appropriately and the associated program income is identified and tracked appropriately. Based on the testing performed, the audit procedures identified that in 5 out of the 12 months there was not evidence of review for monthly reimbursement requests for one or more of the programs. Testing also identified that 4 out of a sample of 35 tenant rent calculations did not have evidence of review. Cause and Effect - The controls in place to ensure period of performance, earmarking, program income, and rent reasonableness are reviewed for completeness and accuracy were not in place. The lack of controls could result in an instance of noncompliance not being identified. Recommendation - We recommend the Organization ensure controls are in place to ensure the monthly reimbursement requests and the tenant rent calculations are reviewed for completeness and accuracy and for compliance with period of performance, earmarking, program income and rent reasonableness. Views of Responsible Officials and Corrective Action Plan - Effective immediately, the accounting director or rent analyst will review and approve the monthly reimbursement requests and rent calculations.
Assistance Listing, Federal Agency, and Program Name - 14.267, U.S. Department of Housing and Urban Development, Continuum of Care Program Federal Award Identification Number and Year - MI0429L5F012209, and MI0030L5F012215 (direct funded); 20230256-00, 20240559-00, MI0074L5F012114, and MI0074L5F012215 (pass-through funded) Pass through Entity - Michigan Department of Health and Human Services, Neighborhood Service Organization, and Detroit Wayne Integrated Health Network Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.303(a), a non federal entity must 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. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition - The Organization lacked sufficient controls to ensure consistent reviews/approvals of monthly reimbursement requests and tenant rent calculations throughout the year. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The review and approval of the monthly reimbursement requests and the tenant calculation serve to prevent and detect and correct noncompliance specific to the following compliance categories: period of performance, earmarking, program income and rent reasonableness. Each grant requests reimbursement for expenses incurred on a monthly basis. The review of the monthly reimbursement request, including supporting documentation, verifies that the costs are within the period of performance, administrative costs did not exceed 10 percent, and use of program income is consistent with grant terms. The review of the tenant rental calculations, including tenant rent calculation worksheet, verifies that the amount charged to participants is calculated and charged appropriately and the associated program income is identified and tracked appropriately. Based on the testing performed, the audit procedures identified that in 5 out of the 12 months there was not evidence of review for monthly reimbursement requests for one or more of the programs. Testing also identified that 4 out of a sample of 35 tenant rent calculations did not have evidence of review. Cause and Effect - The controls in place to ensure period of performance, earmarking, program income, and rent reasonableness are reviewed for completeness and accuracy were not in place. The lack of controls could result in an instance of noncompliance not being identified. Recommendation - We recommend the Organization ensure controls are in place to ensure the monthly reimbursement requests and the tenant rent calculations are reviewed for completeness and accuracy and for compliance with period of performance, earmarking, program income and rent reasonableness. Views of Responsible Officials and Corrective Action Plan - Effective immediately, the accounting director or rent analyst will review and approve the monthly reimbursement requests and rent calculations.
Assistance Listing, Federal Agency, and Program Name - 14.267, U.S. Department of Housing and Urban Development, Continuum of Care Program Federal Award Identification Number and Year - MI0429L5F012209, and MI0030L5F012215 (direct funded); 20230256-00, 20240559-00, MI0074L5F012114, and MI0074L5F012215 (pass-through funded) Pass through Entity - Michigan Department of Health and Human Services, Neighborhood Service Organization, and Detroit Wayne Integrated Health Network Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.303(a), a non federal entity must 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. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition - The Organization lacked sufficient controls to ensure consistent reviews/approvals of monthly reimbursement requests and tenant rent calculations throughout the year. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The review and approval of the monthly reimbursement requests and the tenant calculation serve to prevent and detect and correct noncompliance specific to the following compliance categories: period of performance, earmarking, program income and rent reasonableness. Each grant requests reimbursement for expenses incurred on a monthly basis. The review of the monthly reimbursement request, including supporting documentation, verifies that the costs are within the period of performance, administrative costs did not exceed 10 percent, and use of program income is consistent with grant terms. The review of the tenant rental calculations, including tenant rent calculation worksheet, verifies that the amount charged to participants is calculated and charged appropriately and the associated program income is identified and tracked appropriately. Based on the testing performed, the audit procedures identified that in 5 out of the 12 months there was not evidence of review for monthly reimbursement requests for one or more of the programs. Testing also identified that 4 out of a sample of 35 tenant rent calculations did not have evidence of review. Cause and Effect - The controls in place to ensure period of performance, earmarking, program income, and rent reasonableness are reviewed for completeness and accuracy were not in place. The lack of controls could result in an instance of noncompliance not being identified. Recommendation - We recommend the Organization ensure controls are in place to ensure the monthly reimbursement requests and the tenant rent calculations are reviewed for completeness and accuracy and for compliance with period of performance, earmarking, program income and rent reasonableness. Views of Responsible Officials and Corrective Action Plan - Effective immediately, the accounting director or rent analyst will review and approve the monthly reimbursement requests and rent calculations.
Assistance Listing, Federal Agency, and Program Name - 14.267, U.S. Department of Housing and Urban Development, Continuum of Care Program Federal Award Identification Number and Year - MI0429L5F012209, and MI0030L5F012215 (direct funded); 20230256-00, 20240559-00, MI0074L5F012114, and MI0074L5F012215 (pass-through funded) Pass through Entity - Michigan Department of Health and Human Services, Neighborhood Service Organization, and Detroit Wayne Integrated Health Network Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.303(a), a non federal entity must 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. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition - The Organization lacked sufficient controls to ensure consistent reviews/approvals of monthly reimbursement requests and tenant rent calculations throughout the year. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The review and approval of the monthly reimbursement requests and the tenant calculation serve to prevent and detect and correct noncompliance specific to the following compliance categories: period of performance, earmarking, program income and rent reasonableness. Each grant requests reimbursement for expenses incurred on a monthly basis. The review of the monthly reimbursement request, including supporting documentation, verifies that the costs are within the period of performance, administrative costs did not exceed 10 percent, and use of program income is consistent with grant terms. The review of the tenant rental calculations, including tenant rent calculation worksheet, verifies that the amount charged to participants is calculated and charged appropriately and the associated program income is identified and tracked appropriately. Based on the testing performed, the audit procedures identified that in 5 out of the 12 months there was not evidence of review for monthly reimbursement requests for one or more of the programs. Testing also identified that 4 out of a sample of 35 tenant rent calculations did not have evidence of review. Cause and Effect - The controls in place to ensure period of performance, earmarking, program income, and rent reasonableness are reviewed for completeness and accuracy were not in place. The lack of controls could result in an instance of noncompliance not being identified. Recommendation - We recommend the Organization ensure controls are in place to ensure the monthly reimbursement requests and the tenant rent calculations are reviewed for completeness and accuracy and for compliance with period of performance, earmarking, program income and rent reasonableness. Views of Responsible Officials and Corrective Action Plan - Effective immediately, the accounting director or rent analyst will review and approve the monthly reimbursement requests and rent calculations.
Assistance Listing, Federal Agency, and Program Name - 14.267, U.S. Department of Housing and Urban Development, Continuum of Care Program Federal Award Identification Number and Year - MI0429L5F012209, and MI0030L5F012215 (direct funded); 20230256-00, 20240559-00, MI0074L5F012114, and MI0074L5F012215 (pass-through funded) Pass through Entity - Michigan Department of Health and Human Services, Neighborhood Service Organization, and Detroit Wayne Integrated Health Network Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.303(a), a non federal entity must 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. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition - The Organization lacked sufficient controls to ensure consistent reviews/approvals of monthly reimbursement requests and tenant rent calculations throughout the year. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The review and approval of the monthly reimbursement requests and the tenant calculation serve to prevent and detect and correct noncompliance specific to the following compliance categories: period of performance, earmarking, program income and rent reasonableness. Each grant requests reimbursement for expenses incurred on a monthly basis. The review of the monthly reimbursement request, including supporting documentation, verifies that the costs are within the period of performance, administrative costs did not exceed 10 percent, and use of program income is consistent with grant terms. The review of the tenant rental calculations, including tenant rent calculation worksheet, verifies that the amount charged to participants is calculated and charged appropriately and the associated program income is identified and tracked appropriately. Based on the testing performed, the audit procedures identified that in 5 out of the 12 months there was not evidence of review for monthly reimbursement requests for one or more of the programs. Testing also identified that 4 out of a sample of 35 tenant rent calculations did not have evidence of review. Cause and Effect - The controls in place to ensure period of performance, earmarking, program income, and rent reasonableness are reviewed for completeness and accuracy were not in place. The lack of controls could result in an instance of noncompliance not being identified. Recommendation - We recommend the Organization ensure controls are in place to ensure the monthly reimbursement requests and the tenant rent calculations are reviewed for completeness and accuracy and for compliance with period of performance, earmarking, program income and rent reasonableness. Views of Responsible Officials and Corrective Action Plan - Effective immediately, the accounting director or rent analyst will review and approve the monthly reimbursement requests and rent calculations.
Assistance Listing, Federal Agency, and Program Name - 14.267, U.S. Department of Housing and Urban Development, Continuum of Care Program Federal Award Identification Number and Year - MI0429L5F012209, and MI0030L5F012215 (direct funded); 20230256-00, 20240559-00, MI0074L5F012114, and MI0074L5F012215 (pass-through funded) Pass through Entity - Michigan Department of Health and Human Services, Neighborhood Service Organization, and Detroit Wayne Integrated Health Network Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.303(a), a non federal entity must 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. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition - The Organization lacked sufficient controls to ensure consistent reviews/approvals of monthly reimbursement requests and tenant rent calculations throughout the year. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The review and approval of the monthly reimbursement requests and the tenant calculation serve to prevent and detect and correct noncompliance specific to the following compliance categories: period of performance, earmarking, program income and rent reasonableness. Each grant requests reimbursement for expenses incurred on a monthly basis. The review of the monthly reimbursement request, including supporting documentation, verifies that the costs are within the period of performance, administrative costs did not exceed 10 percent, and use of program income is consistent with grant terms. The review of the tenant rental calculations, including tenant rent calculation worksheet, verifies that the amount charged to participants is calculated and charged appropriately and the associated program income is identified and tracked appropriately. Based on the testing performed, the audit procedures identified that in 5 out of the 12 months there was not evidence of review for monthly reimbursement requests for one or more of the programs. Testing also identified that 4 out of a sample of 35 tenant rent calculations did not have evidence of review. Cause and Effect - The controls in place to ensure period of performance, earmarking, program income, and rent reasonableness are reviewed for completeness and accuracy were not in place. The lack of controls could result in an instance of noncompliance not being identified. Recommendation - We recommend the Organization ensure controls are in place to ensure the monthly reimbursement requests and the tenant rent calculations are reviewed for completeness and accuracy and for compliance with period of performance, earmarking, program income and rent reasonableness. Views of Responsible Officials and Corrective Action Plan - Effective immediately, the accounting director or rent analyst will review and approve the monthly reimbursement requests and rent calculations.
Assistance Listing, Federal Agency, and Program Name - 14.267, U.S. Department of Housing and Urban Development, Continuum of Care Program Federal Award Identification Number and Year - MI0429L5F012209, and MI0030L5F012215 (direct funded); 20230256-00, 20240559-00, MI0074L5F012114, and MI0074L5F012215 (pass-through funded) Pass through Entity - Michigan Department of Health and Human Services, Neighborhood Service Organization, and Detroit Wayne Integrated Health Network Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.303(a), a non federal entity must 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. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition - The Organization lacked sufficient controls to ensure consistent reviews/approvals of monthly reimbursement requests and tenant rent calculations throughout the year. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The review and approval of the monthly reimbursement requests and the tenant calculation serve to prevent and detect and correct noncompliance specific to the following compliance categories: period of performance, earmarking, program income and rent reasonableness. Each grant requests reimbursement for expenses incurred on a monthly basis. The review of the monthly reimbursement request, including supporting documentation, verifies that the costs are within the period of performance, administrative costs did not exceed 10 percent, and use of program income is consistent with grant terms. The review of the tenant rental calculations, including tenant rent calculation worksheet, verifies that the amount charged to participants is calculated and charged appropriately and the associated program income is identified and tracked appropriately. Based on the testing performed, the audit procedures identified that in 5 out of the 12 months there was not evidence of review for monthly reimbursement requests for one or more of the programs. Testing also identified that 4 out of a sample of 35 tenant rent calculations did not have evidence of review. Cause and Effect - The controls in place to ensure period of performance, earmarking, program income, and rent reasonableness are reviewed for completeness and accuracy were not in place. The lack of controls could result in an instance of noncompliance not being identified. Recommendation - We recommend the Organization ensure controls are in place to ensure the monthly reimbursement requests and the tenant rent calculations are reviewed for completeness and accuracy and for compliance with period of performance, earmarking, program income and rent reasonableness. Views of Responsible Officials and Corrective Action Plan - Effective immediately, the accounting director or rent analyst will review and approve the monthly reimbursement requests and rent calculations.
Assistance Listing, Federal Agency, and Program Name - 14.267, U.S. Department of Housing and Urban Development, Continuum of Care Program Federal Award Identification Number and Year - MI0429L5F012209, and MI0030L5F012215 (direct funded); 20230256-00, 20240559-00, MI0074L5F012114, and MI0074L5F012215 (pass-through funded) Pass through Entity - Michigan Department of Health and Human Services, Neighborhood Service Organization, and Detroit Wayne Integrated Health Network Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.303(a), a non federal entity must 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. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition - The Organization lacked sufficient controls to ensure consistent reviews/approvals of monthly reimbursement requests and tenant rent calculations throughout the year. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The review and approval of the monthly reimbursement requests and the tenant calculation serve to prevent and detect and correct noncompliance specific to the following compliance categories: period of performance, earmarking, program income and rent reasonableness. Each grant requests reimbursement for expenses incurred on a monthly basis. The review of the monthly reimbursement request, including supporting documentation, verifies that the costs are within the period of performance, administrative costs did not exceed 10 percent, and use of program income is consistent with grant terms. The review of the tenant rental calculations, including tenant rent calculation worksheet, verifies that the amount charged to participants is calculated and charged appropriately and the associated program income is identified and tracked appropriately. Based on the testing performed, the audit procedures identified that in 5 out of the 12 months there was not evidence of review for monthly reimbursement requests for one or more of the programs. Testing also identified that 4 out of a sample of 35 tenant rent calculations did not have evidence of review. Cause and Effect - The controls in place to ensure period of performance, earmarking, program income, and rent reasonableness are reviewed for completeness and accuracy were not in place. The lack of controls could result in an instance of noncompliance not being identified. Recommendation - We recommend the Organization ensure controls are in place to ensure the monthly reimbursement requests and the tenant rent calculations are reviewed for completeness and accuracy and for compliance with period of performance, earmarking, program income and rent reasonableness. Views of Responsible Officials and Corrective Action Plan - Effective immediately, the accounting director or rent analyst will review and approve the monthly reimbursement requests and rent calculations.
Special Tests and Provisions – Housing Quality Standards (HQS) Enforcement Finding Number: 2024-002 Assistance Listing Number and Title: AL # 14.871/14.879 Housing Choice Voucher Cluster Federal Award Identification Number / Year: OH054AF0148 / 2023 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: HQS Enforcement Pass-Through Entity: None Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 2400.101 gives regulatory effect to the Department of Housing & Urban Development for 2 CFR § 200.303 which requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 24 CFR § 982.404(d)(2) provides that the Public Housing Authority (PHA) must abate the Housing Assistance Payment (HAP), including amounts that had been withheld, if the owner fails to make the repairs within the applicable cure period (within 24 hours of notification for life-threatening deficiencies and within 30 days of notification (or other reasonable period established by the PHA) for non-life-threatening deficiencies). Due to deficiencies in the Authority's internal controls over compliance requirements, seven percent of inspections tested for Housing Quality Standards compliance did not abate HAP payments after the owner failed to make the repairs noted in the inspection report within the 30 period. Failing to properly abate HAP payments could result in the Authority making payments to owners who do not meet Housing Quality Standards. The Authority should adopt policies and procedures for HAP payments to ensure compliance with 24 CFR § 982.404(d)(2)
Special Tests and Provisions – Housing Quality Standards (HQS) Enforcement Finding Number: 2024-002 Assistance Listing Number and Title: AL # 14.871/14.879 Housing Choice Voucher Cluster Federal Award Identification Number / Year: OH054AF0148 / 2023 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: HQS Enforcement Pass-Through Entity: None Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 2400.101 gives regulatory effect to the Department of Housing & Urban Development for 2 CFR § 200.303 which requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 24 CFR § 982.404(d)(2) provides that the Public Housing Authority (PHA) must abate the Housing Assistance Payment (HAP), including amounts that had been withheld, if the owner fails to make the repairs within the applicable cure period (within 24 hours of notification for life-threatening deficiencies and within 30 days of notification (or other reasonable period established by the PHA) for non-life-threatening deficiencies). Due to deficiencies in the Authority's internal controls over compliance requirements, seven percent of inspections tested for Housing Quality Standards compliance did not abate HAP payments after the owner failed to make the repairs noted in the inspection report within the 30 period. Failing to properly abate HAP payments could result in the Authority making payments to owners who do not meet Housing Quality Standards. The Authority should adopt policies and procedures for HAP payments to ensure compliance with 24 CFR § 982.404(d)(2)
Criteria: Nonfederal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the federal award to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. This includes properly identifying all federal awards subject to the Uniform Guidance and fairly presenting the required information, including the assistance listing number (ALN), in the schedule of expenditures of federal awards (SEFA). Condition: The schedule of expenditures of federal awards was reissued after an error was identified by management in the schedule of expenditures of federal awards, specifically in the assistance listing number (ALN) under grant IL-2023-028-00, after the report was originally issued. Cause: The District had a minor lapse in internal controls related to the preparation and review of the schedule of expenditures of federal awards. Management detected the error in the ALN number of grant IL-2023-028-00; however, the audit report had already been issued. Effect: Without adequate internal controls over preparation and review of the schedule of expenditures of federal awards, it is possible that material errors would not be detected in a timely manner and could be reported. Questioned Costs: None noted. Recommendation: We recommend that the District review the control procedures around preparation and review of the schedule of expenditures of federal awards and implement an independent review of the ALN numbers per the grant agreements in the initial review of the SEFA.
2024‐002 INTERNAL CONTROL DOCUMENTATION Federal Program Information: Federal Agency and Program Name Federal Assistance Listing Number U.S. Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants 14.218 Criteria: 2 CFR 200.303 requires that a 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition: The City’s policies provide for review and approval of documentation and reports related to program compliance requirements however, evidence supporting the review for internal control purposes was not consistently documented or retained. Questioned Costs: Unknown Context: Total federal expenditures for the Community Development Block Grants/Entitlement Grants were $3,436,560 for the year ended June 30, 2024. Cause: The City did not retain adequate documentation supporting the review and approval of documentation. Effect: The City may not be in compliance with related program compliance requirements. Recommendation: We recommend that the City enhance their policies to ensure that documentation of review and approvals are maintained as evidence of controls with the specified requirements. Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
2024–003 ALLOWABILITY‐PAYROLL Federal Program Information: Federal Agency and Program Name Assistance Listing # U.S. Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants 14.218 Criteria: 2 CFR 200.303 requires that a 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.430(g)(1) states, “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; (iii) Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities (for IHEs, this is the IBS); (iv) Encompass federally‐assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; (v) Comply with the established accounting policies and procedures of the recipient or subrecipient (See paragraph (i)(1)(ii) of this section for treatment of incidental work for IHEs.); and (vi) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non‐Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 2 CFR 200.403 indicates that costs must “be consistent with policies and procedures that apply uniformly to both federally‐financed and other activities of the non‐Federal entity” and must “be adequately documented”. Condition: For 6 of the 17 payroll transactions selected for testing the individual’s hourly rate of pay charged to the federal program was not consistent with actual pay rates. Documentation supporting the difference in rate paid and rate reimbursed from the federal program was not available. Questioned Costs: $69 Context: Total federal expenditures for the Community Development Block Grant program were $3,436,560. The 6 payroll transactions represent $8,906 of the total payroll transactions tested of $24,915 for the program. Total payroll charged to the grant was $292,826. Cause: The City does not have adequate internal controls and policies and procedures in place to ensure that the payroll amounts reimbursed from the federal funds correspond to the payroll rates in the underlying payroll accounting records. Effect: The City is not be in compliance with federal statues, regulations, and terms of the conditions of the federal award. Expenditures were paid that are not allowable. The Authority may not identify noncompliance with federal statues, regulations, and terms of the conditions of the federal award including allowability. Recommendation: We recommend that City enhance internal controls to ensure that expenditures charged to the federal awards are properly reviewed and supported. Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
2024‐002 INTERNAL CONTROL DOCUMENTATION Federal Program Information: Federal Agency and Program Name Federal Assistance Listing Number U.S. Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants 14.218 Criteria: 2 CFR 200.303 requires that a 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition: The City’s policies provide for review and approval of documentation and reports related to program compliance requirements however, evidence supporting the review for internal control purposes was not consistently documented or retained. Questioned Costs: Unknown Context: Total federal expenditures for the Community Development Block Grants/Entitlement Grants were $3,436,560 for the year ended June 30, 2024. Cause: The City did not retain adequate documentation supporting the review and approval of documentation. Effect: The City may not be in compliance with related program compliance requirements. Recommendation: We recommend that the City enhance their policies to ensure that documentation of review and approvals are maintained as evidence of controls with the specified requirements. Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
2024–003 ALLOWABILITY‐PAYROLL Federal Program Information: Federal Agency and Program Name Assistance Listing # U.S. Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants 14.218 Criteria: 2 CFR 200.303 requires that a 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.430(g)(1) states, “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; (iii) Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities (for IHEs, this is the IBS); (iv) Encompass federally‐assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; (v) Comply with the established accounting policies and procedures of the recipient or subrecipient (See paragraph (i)(1)(ii) of this section for treatment of incidental work for IHEs.); and (vi) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non‐Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 2 CFR 200.403 indicates that costs must “be consistent with policies and procedures that apply uniformly to both federally‐financed and other activities of the non‐Federal entity” and must “be adequately documented”. Condition: For 6 of the 17 payroll transactions selected for testing the individual’s hourly rate of pay charged to the federal program was not consistent with actual pay rates. Documentation supporting the difference in rate paid and rate reimbursed from the federal program was not available. Questioned Costs: $69 Context: Total federal expenditures for the Community Development Block Grant program were $3,436,560. The 6 payroll transactions represent $8,906 of the total payroll transactions tested of $24,915 for the program. Total payroll charged to the grant was $292,826. Cause: The City does not have adequate internal controls and policies and procedures in place to ensure that the payroll amounts reimbursed from the federal funds correspond to the payroll rates in the underlying payroll accounting records. Effect: The City is not be in compliance with federal statues, regulations, and terms of the conditions of the federal award. Expenditures were paid that are not allowable. The Authority may not identify noncompliance with federal statues, regulations, and terms of the conditions of the federal award including allowability. Recommendation: We recommend that City enhance internal controls to ensure that expenditures charged to the federal awards are properly reviewed and supported. Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
FINDING 2024-001 Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 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). . . ." 7 CFR 245.3(c) sates 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. 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 sample testing of 60 students for eligibility, we noted 7 instances where there was no documented review by someone other than the individual making the eligibility determination. The lack of review was isolated to paper applications. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a formal review over a sample of applicants entered into the software to ensure the accuracy and completeness of the information entered. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-001 Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 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). . . ." 7 CFR 245.3(c) sates 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. 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 sample testing of 60 students for eligibility, we noted 7 instances where there was no documented review by someone other than the individual making the eligibility determination. The lack of review was isolated to paper applications. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a formal review over a sample of applicants entered into the software to ensure the accuracy and completeness of the information entered. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-001 Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 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). . . ." 7 CFR 245.3(c) sates 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. 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 sample testing of 60 students for eligibility, we noted 7 instances where there was no documented review by someone other than the individual making the eligibility determination. The lack of review was isolated to paper applications. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a formal review over a sample of applicants entered into the software to ensure the accuracy and completeness of the information entered. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-003 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, S425U200013 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. FINDING 2024-003 (Continued) 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 and ESSER III amounts reported on the Year 3 report ($347,591 and $337,851 respectively) did not agree to the underlying expenditure records ($135,355 and $159,811 respectively). Additionally, we noted that the ESSER II amount reported on the Year 4 report ($233,093) did not agree to the underlying expenditure records ($267,310) of the School Corporation. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-003. 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.
FINDING 2024-003 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, S425U200013 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. FINDING 2024-003 (Continued) 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 and ESSER III amounts reported on the Year 3 report ($347,591 and $337,851 respectively) did not agree to the underlying expenditure records ($135,355 and $159,811 respectively). Additionally, we noted that the ESSER II amount reported on the Year 4 report ($233,093) did not agree to the underlying expenditure records ($267,310) of the School Corporation. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-003. 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.
2024 - 009 Reporting - Capital Expenditures (2023-005 and 2022-008) Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Assistance Listing Number: 21. 027 Federal Award Identification Number and Year: Pub. L. No. 117-2-2021 Award Period: 5/10/2021 - l 2/3 l /2026 Type of Finding • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the recipient and subrecipient must 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. According to the 2022 Final Rule, for projects with total expected capital expenditures of $1 million or greater, recipients must complete and meet the substantive requirements of a written justification for their capital expenditure. Such written justification must include the following elements: (i) Describe the harm or need to be addressed; (ii) Explain why a capital expenditure is appropriate; and (iii) Compare the proposed capital expenditure to at least two alternative capital expenditures and demonstrate why the proposed capital expenditure is superior. Condition: During our testing, we noted two of the two written justifications did not include all the elements outlined in the 2022 Final Rule. Questioned costs: None Context: During our testing, it was noted that the written justifications for the WECH Kitchen and Gibson Medical Respite projects did not compare the proposed capital expenditure to at least two alternative capital expenditures and demonstrate why the proposed capital expenditure is superior. Total federal expenditures for WECH Kitchen and Gibson Medical Respite as of June 30, 2024 are $1,484,411 and $6,236,193, respectively. Cause: Management oversight. The City did not follow the requirements of a written justification for capital expenditures as outlined in the 2022 Final Rule. Effect: The auditor noted instances of noncompliance. Noncompliance results in inaccurate reporting. Recommendation: We recommend the City update the written justifications to include all the elements outlined in the 2022 Final Rule. Management Response: The City concurs with the finding. The City's Grant Administrator will work with the Department of Health, Housing and Homeless and the Department of Municipal Development to adequately document the comparison of capital expenditure options and demonstrate the superiority of the chosen capital project in the final written justifications. Timeline and Responsible Position: March 2025 - Grant Administrator
2024 - 010 Allowable Activities and Costs/Cost Principles - Payroll (2023-010 and 2022-005) Federal Agency: U.S. Department of Transportation Federal Program Name: Federal Transit Cluster - Federal Transit - Formula Grants Assistance Listing Number: 20.507 Federal Award Identification Number and Year: N1vl-2023-022-00 - 2023 N1vl-2023-036-00 - 2023 Award Period: 5/31/2023 - 9/30/2024 12/18/2023 - 6/30/2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the recipient and subrecipient must 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. According to §200.511 Audit findings follow-up of 2 CFR Part 200, the auditee is responsible for follow-up and corrective action on all audit findings. At the completion of the audit, the auditee must prepare a corrective action plan to address each audit finding included in the auditor's report for the current year. According to the City's Corrective Action Plan for the year ended June 30, 2023, the Transit department has established a timeline for the completion and approval of the time card policy, and it is expected that the policy will take effect in April 2024. Condition: During our testing, we noted the City did not have adequate internal controls designed to ensure proper timecard approval. Management's Progress for Repeat Findings: This is a repeated and modified finding. While the City has improved its efforts, there are still opportunities for improvement to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements as well as compliance with City policy. Questioned costs: None Context: During our testing, it was noted that thirteen out of sixteen payroll disbursements did not have approval of the employees' timecards. Cause: The City has not implemented corrective action from the audit for the year ended June 30, 2023. The Transit department is working on the policy and in the final stages of getting the policy updated. Effect: The auditor noted no instances of noncompliance with the provisions of allowable activities and costs/cost principles; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Recommendation: We recommend the City work to implement full corrective action. Management Response: The City concurs with the finding. Transit Department staff is in the process of developing a policy establishing internal controls over timekeeping and is near finalizing the policy. Once finalized, the policy will be reviewed with appropriate parties. Further, the Transit Department is exploring the purchase and implementation of additional software to assist with enacting these controls. Timeline and Responsible Position: April 2025 - Transit Department Director
2024 - 011 Allowable Activities and Costs/Cost Principles - Payroll Federal Agency: U.S. Department of Justice Federal Program Name: Public Safety Partnership and Community Policing Grants Assistance Listing Number: 16. 710 Federal Award Identification Number and Year: 2020ULWX0001 - 2020 Award Period: 7/1/2020 - 6/30/2024 Type of Finding • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the recipient and subrecipient must 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. According to §200.403 Factors affecting allowability of costs of 2 CFR Part 200, costs must conform to any limitations or exclusions set forth in these principles or in the federal award as to types or amount of cost items. The FY 2020 COPS Hiring Program (CHP) award provides funding to law enforcement agencies to hire and/or rehire career law enforcement officers. Specific to the City, CHP funding is for forty new hires. According to the award, the City may only be reimbursed for the approved cost categories that are documented within the Financial Clearance Memorandum (FC:M). Condition: During our testing, we noted the City paid incentive pay with CHP funding. Also, we noted the City paid salaries and fringe benefits for four officers not listed in the Date of Hire - COPS Officer List with CHP funding. Questioned costs: $16,882.17 Context: During our testing, it was noted that the City paid incentive pay of $3,000.00 for the pay period end 12/01/2023. The FCM does not have a cost category for incentive pay. Also, it was noted that the City paid salaries and fringe benefits of $13,882.17 for four officers not listed in the Date of Hire - COPS Officer List provided to the federal agency. Cause: The City charged the incentive pay to the grant by mistake. The City transferred the four officers to the grant during its initial years. The City moved the original forty officers to the grant and transferred any officers off the grant back to their positions funded by the general fund. These officers should have been moved out. Effect: The auditor noted instances of noncompliance. Noncompliance results in potential pay back of federal funds. Recommendation: We recommend the City review costs charged to the grant to ensure the FCM has a cost category for the costs. We recommend the City review the officers charged to the grant to ensure they are listed in the he Date of Hire - COPS Officer List provided to the federal agency. For any questioned costs, we recommend the City work with the federal agency for resolution. Management Response: The City concurs with the finding. Albuquerque Police Department (APD) Grant Administrator will meet with the City Grant Administrator to review and prepare the necessary payroll corrections, ensuring that all payroll charges allocated to the grant are accurate. The APD Grant Administrator will be responsible for submitting correcting payroll reclassifications to the City's Grants Management Section for review, entry and approval no later than January 31, 2025. APD will work directly with the City's Grants Management Section to establish new reconciliation, reclassification and validation processes to ensure that only eligible officers and pay types are charged to the grant. Timeline and Responsible Position: January 2025 - APD Grant Administrator
2024 - 012 Reporting Federal Agency: U.S. Department of Justice Federal Program Name: Public Safety Partnership and Community Policing Grants Assistance Listing Number: 16. 710 Federal Award Identification Number and Year: l SJCOPS-23-GG-01715-TECP - 2023 Award Period: 12/29/2022 - 12/31 /2024 Type of Finding • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the recipient and subrecipient must 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. According to Part 3 of the Compliance Supplement 2024, compliance testing of performance and special reports is only required for data, identified by agencies in parts 4 and 5 as key line items, that are quantifiable and are capable of evaluation against objective criteria stated in the statutes, regulations, contract or grant agreements pertaining to the program. Performance and special reports in parts 4 and 5 are assumed to meet the above criteria. However, if an agency does not identify key line items for a performance or special report, auditors are only required to test that the report was submitted in a timely manner and no other procedures are required. According to the terms and conditions of the award, the City is responsible for submitting semi-annual programmatic performance reports that describe project activities during the reporting period. Performance reports are due August 30 and March 1. Condition: During our testing, we noted one of the three performance reports was not submitted timely. Questioned costs: None Context: During our testing, it was noted that one of the three performance reports was not submitted timely. The performance report for the reporting period end date January 31 , 2024 and due March 1, 2024 was submitted on March 11 , 2024. Cause: Management oversight. The City did not submit the performance report by the due date. Effect: The auditor noted an instance of noncompliance. Noncompliance results in untimely submission of information to the federal agency. Recommendation: We recommend the City establish a reporting calendar. We recommend the City periodically reviews the completeness and accuracy of and adherence to the reporting calendar. Management Response: The City concurs with the finding. The APD Grant Administrator will establish a process to ensure that all programmatic reports are submitted on time by creating a spreadsheet to track the due dates for each programmatic report. Once the reports are submitted, it will be the responsibility of the Grant Coordinator to record the submission date. If a report is submitted late, the Grant Coordinator must contact the grantor by the end of the day to explain the reason for the delay. Timeline and Responsible Position: December 2024 -APD Grant Administrator
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: S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: 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). . . ." 29 CFR 5.5 states in part: a. The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in §5.1, the following clauses… (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics… (3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). 2 CFR 200 Appendix II states in part: In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week.. . .” Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirements. The School Corporation did not include Davis Bacon wage rate requirements in its contract with vendor which includes labor installation. The School Corporation did not obtain the weekly payroll reports certifications from vendor installing equipment. 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: The School Corporation had three projects during the audit period which included construction or labor installation which were charged to the ESSER III (84.425U) grant award. For one of two vendors selected for testing, the School Corporation did not include federal wage rate requirement clauses in the contract with the vendor and did not have an internal control designed to collect the weekly payroll reports certifications from vendors and its subcontractors, as applicable, to comply with Davis Bacon wage rate requirements. The amount disbursed for the project totaled $50,000. The lack of controls and noncompliance is isolated to the period of July 1, 2022 through June 30, 2023. Identification as a repeat finding: No. Recommendation: We recommend the School Corporation include Davis-Bacon wage requirements in vendor contracts which are federally funded and implement a formal process to ensure the required weekly payroll report certifications are collected and reviewed by management to ensure compliance with the federal wage rate requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
2 CFR § 2400.101 - Internal Control Failures for Eligibility Finding Number: 2024-001 Assistance Listing Number and Title: AL # 14.850 Public Housing Operating Federal Award Identification Number / Year: OH028-00000123D/2023 and OH028- 00000124D/2024 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Determine that the required eligibility determinations and redeterminations were performed, and individual was determined to be eligible in accordance with the compliance requirements of the program. Pass-Through Entity: None Repeat Finding from Prior Audit? No Material Weakness 2 CFR § 2400.101 gives regulatory effect to the Department of Housing & Urban Development for 2 CFR § 200.303 which requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 24 CFR § 960.253 provides that once a year, the Authority must give each family the opportunity to choose between the two methods for determining the amount of tenant rent payable monthly by the family. 24 CFR § 960.257 provides that the Authority must reexamine family income and composition at least once every 12 months and adjust the tenant rent as necessary using the documentation from third party verification Due to deficiencies in the Authority's internal controls over compliance requirements, ten percent of applications tested for eligibility compliance did not have sufficient documentation to demonstrate that examination was reviewed before certification and that the tenant was given a choice between the two methods prior to the examination's completion. Failing to properly determine eligibility could result in the Authority improperly admitting ineligible tenants and making improper payments. The Authority should review the applications for accuracy and ensure that proper documentation is maintained of those which meet the eligibility guidelines set for the Public Operating Fund.
FINDING 2024-001 Information on the federal program: Subject: Impact Aid – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: Impact Aid Assistance Listing Number: 84.041 Federal Award Numbers and Years (or Other Identifying Numbers): S041A-2021-1617, S041A-2022-1617, S041A-2023-1617, S041A-2024-1617, S041B-2021-1616, S041B-2022-1616, S041B-2023-1616, S041B- 2024-1616 Pass-Through Entity: Direct Grant Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: 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). . . ." 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). FINDING 2024-001 (Continued) 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: The School Corporation had one project for a new fabrication lab for students was funded with Impact Aid (84.041) grant awards. The School Corporation did not properly include Davis-Bacon wage rate requirements in the vendor contract, and did not obtain the weekly payroll reports certifications from the construction vendor to monitor compliance with Davis-Bacon wage rate requirements. Therefore, no review was performed to ensure that pay rates complied with the federal wage rate requirements. The total project cost disbursed during the audit period was $37,200 which included materials and labor. 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 for projects requiring labor installation and funded by federal grants subject to Davis-Bacon wage rate requirements to ensure compliance with federal regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-001 Information on the federal program: Subject: Impact Aid – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: Impact Aid Assistance Listing Number: 84.041 Federal Award Numbers and Years (or Other Identifying Numbers): S041A-2021-1617, S041A-2022-1617, S041A-2023-1617, S041A-2024-1617, S041B-2021-1616, S041B-2022-1616, S041B-2023-1616, S041B- 2024-1616 Pass-Through Entity: Direct Grant Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: 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). . . ." 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). FINDING 2024-001 (Continued) 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: The School Corporation had one project for a new fabrication lab for students was funded with Impact Aid (84.041) grant awards. The School Corporation did not properly include Davis-Bacon wage rate requirements in the vendor contract, and did not obtain the weekly payroll reports certifications from the construction vendor to monitor compliance with Davis-Bacon wage rate requirements. Therefore, no review was performed to ensure that pay rates complied with the federal wage rate requirements. The total project cost disbursed during the audit period was $37,200 which included materials and labor. 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 for projects requiring labor installation and funded by federal grants subject to Davis-Bacon wage rate requirements to ensure compliance with federal regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-001 Information on the federal program: Subject: Impact Aid – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: Impact Aid Assistance Listing Number: 84.041 Federal Award Numbers and Years (or Other Identifying Numbers): S041A-2021-1617, S041A-2022-1617, S041A-2023-1617, S041A-2024-1617, S041B-2021-1616, S041B-2022-1616, S041B-2023-1616, S041B- 2024-1616 Pass-Through Entity: Direct Grant Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: 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). . . ." 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). FINDING 2024-001 (Continued) 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: The School Corporation had one project for a new fabrication lab for students was funded with Impact Aid (84.041) grant awards. The School Corporation did not properly include Davis-Bacon wage rate requirements in the vendor contract, and did not obtain the weekly payroll reports certifications from the construction vendor to monitor compliance with Davis-Bacon wage rate requirements. Therefore, no review was performed to ensure that pay rates complied with the federal wage rate requirements. The total project cost disbursed during the audit period was $37,200 which included materials and labor. 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 for projects requiring labor installation and funded by federal grants subject to Davis-Bacon wage rate requirements to ensure compliance with federal regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-001 Information on the federal program: Subject: Impact Aid – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: Impact Aid Assistance Listing Number: 84.041 Federal Award Numbers and Years (or Other Identifying Numbers): S041A-2021-1617, S041A-2022-1617, S041A-2023-1617, S041A-2024-1617, S041B-2021-1616, S041B-2022-1616, S041B-2023-1616, S041B- 2024-1616 Pass-Through Entity: Direct Grant Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: 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). . . ." 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). FINDING 2024-001 (Continued) 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: The School Corporation had one project for a new fabrication lab for students was funded with Impact Aid (84.041) grant awards. The School Corporation did not properly include Davis-Bacon wage rate requirements in the vendor contract, and did not obtain the weekly payroll reports certifications from the construction vendor to monitor compliance with Davis-Bacon wage rate requirements. Therefore, no review was performed to ensure that pay rates complied with the federal wage rate requirements. The total project cost disbursed during the audit period was $37,200 which included materials and labor. 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 for projects requiring labor installation and funded by federal grants subject to Davis-Bacon wage rate requirements to ensure compliance with federal regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-001 Information on the federal program: Subject: Impact Aid – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: Impact Aid Assistance Listing Number: 84.041 Federal Award Numbers and Years (or Other Identifying Numbers): S041A-2021-1617, S041A-2022-1617, S041A-2023-1617, S041A-2024-1617, S041B-2021-1616, S041B-2022-1616, S041B-2023-1616, S041B- 2024-1616 Pass-Through Entity: Direct Grant Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: 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). . . ." 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). FINDING 2024-001 (Continued) 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: The School Corporation had one project for a new fabrication lab for students was funded with Impact Aid (84.041) grant awards. The School Corporation did not properly include Davis-Bacon wage rate requirements in the vendor contract, and did not obtain the weekly payroll reports certifications from the construction vendor to monitor compliance with Davis-Bacon wage rate requirements. Therefore, no review was performed to ensure that pay rates complied with the federal wage rate requirements. The total project cost disbursed during the audit period was $37,200 which included materials and labor. 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 for projects requiring labor installation and funded by federal grants subject to Davis-Bacon wage rate requirements to ensure compliance with federal regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-001 Information on the federal program: Subject: Impact Aid – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: Impact Aid Assistance Listing Number: 84.041 Federal Award Numbers and Years (or Other Identifying Numbers): S041A-2021-1617, S041A-2022-1617, S041A-2023-1617, S041A-2024-1617, S041B-2021-1616, S041B-2022-1616, S041B-2023-1616, S041B- 2024-1616 Pass-Through Entity: Direct Grant Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: 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). . . ." 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). FINDING 2024-001 (Continued) 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: The School Corporation had one project for a new fabrication lab for students was funded with Impact Aid (84.041) grant awards. The School Corporation did not properly include Davis-Bacon wage rate requirements in the vendor contract, and did not obtain the weekly payroll reports certifications from the construction vendor to monitor compliance with Davis-Bacon wage rate requirements. Therefore, no review was performed to ensure that pay rates complied with the federal wage rate requirements. The total project cost disbursed during the audit period was $37,200 which included materials and labor. 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 for projects requiring labor installation and funded by federal grants subject to Davis-Bacon wage rate requirements to ensure compliance with federal regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-001 Information on the federal program: Subject: Impact Aid – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: Impact Aid Assistance Listing Number: 84.041 Federal Award Numbers and Years (or Other Identifying Numbers): S041A-2021-1617, S041A-2022-1617, S041A-2023-1617, S041A-2024-1617, S041B-2021-1616, S041B-2022-1616, S041B-2023-1616, S041B- 2024-1616 Pass-Through Entity: Direct Grant Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: 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). . . ." 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). FINDING 2024-001 (Continued) 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: The School Corporation had one project for a new fabrication lab for students was funded with Impact Aid (84.041) grant awards. The School Corporation did not properly include Davis-Bacon wage rate requirements in the vendor contract, and did not obtain the weekly payroll reports certifications from the construction vendor to monitor compliance with Davis-Bacon wage rate requirements. Therefore, no review was performed to ensure that pay rates complied with the federal wage rate requirements. The total project cost disbursed during the audit period was $37,200 which included materials and labor. 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 for projects requiring labor installation and funded by federal grants subject to Davis-Bacon wage rate requirements to ensure compliance with federal regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-001 Information on the federal program: Subject: Impact Aid – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: Impact Aid Assistance Listing Number: 84.041 Federal Award Numbers and Years (or Other Identifying Numbers): S041A-2021-1617, S041A-2022-1617, S041A-2023-1617, S041A-2024-1617, S041B-2021-1616, S041B-2022-1616, S041B-2023-1616, S041B- 2024-1616 Pass-Through Entity: Direct Grant Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: 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). . . ." 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). FINDING 2024-001 (Continued) 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: The School Corporation had one project for a new fabrication lab for students was funded with Impact Aid (84.041) grant awards. The School Corporation did not properly include Davis-Bacon wage rate requirements in the vendor contract, and did not obtain the weekly payroll reports certifications from the construction vendor to monitor compliance with Davis-Bacon wage rate requirements. Therefore, no review was performed to ensure that pay rates complied with the federal wage rate requirements. The total project cost disbursed during the audit period was $37,200 which included materials and labor. 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 for projects requiring labor installation and funded by federal grants subject to Davis-Bacon wage rate requirements to ensure compliance with federal regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-002 Information on the federal program: Subject: COVID-19 – Education Stabilization Fund – Reporting 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): S425D200013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Significant Deficiency 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 District'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. Internal controls were not adequate to detect and prevent errors in annual data submitted to the Indiana Department of Education. Questioned Costs: There were no questioned costs identified. FINDING 2024-002 (Continued) Context: The School Corporation had not designed nor implemented a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) annual Data Collection reports (Reports) were complete and accurately submitted. The reports were prepared and submitted in JotForm, the online application used by the Indiana Department of Education to collect information, without an oversight or secondary review process in place to prevent or detect and correct errors. During the testing of the annual data reports, variances were noted in the amounts expended reported on the Year 3 and Year 4 annual data reports for the ESSER II and ESSER III grant awards when compared to underlying disbursement detail for the grant funds. The amounts reported as expended in the Year 3 reports, which covers the period of July 1, 2021 through June 30, 2022, included amounts not expended until the following fiscal year. The amounts reported as expended in the Year 4 report, which covers the period of July 1, 2022 through June 30, 2023, for ESSER III totaled $745,052 compared to underlying disbursement detail of $648,383 for the same period. Identification as a repeat finding, if applicable: No. Recommendation: We recommend someone other than the preparer of the report perform a documented, secondary review of the report information 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.