CONDITION In the 26 subrecipient awards tested, we found that the University of North Dakota did not sufficiently assess risk for 21 of those. Of the 21 subrecipient awards that were not sufficiently risk assessed, the following was noted: • There was no risk assessment completed for 12 subaward agreements (46%). • Risk assessment forms were completed after 9 subaward agreements had been issued (35%). CRITERIA 2 CFR 200.332 (c) states in part: Evaluate each subrecipient's fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring described in paragraph (f) of this section. When evaluating a subrecipient's risk, a pass-through entity should consider the following: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits. This includes considering whether or not the subrecipient receives a Single Audit in accordance with subpart F and the extent to which the same or similar subawards have been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of any Federal agency monitoring (for example, if the subrecipient also receives Federal awards directly from the Federal agency). During our audit period, University of North Dakota's operating practices stated that a risk assessment was to be completed on each subrecipient entity before a subaward agreement is issued. Institutional, project and threshold questions on the form assess risk of a subrecipient regardless of funding source. The risk assessment will determine whether a risk mitigation strategy should be developed and whether additional requirements should be imposed on the subrecipient. Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. CAUSE University of North Dakota did not have adequate procedures in place to properly monitor subrecipients. EFFECT The University of North Dakota took on additional risk with each subrecipient by not adequately assessing the risk. Each may have a high risk of noncompliance with federal requirements. Additionally, evaluation of risk plays a role in determining the appropriate subrecipient monitoring activities for each subrecipient. As risk assessments were not completed in a timely manner, risk-appropriate monitoring activities may not have been performed. CONTEXT The University of North Dakota had payments to subrecipients that totaled $25,929,781 during fiscal years 2023 and 2024. The University of North Dakota did not properly complete risk assessments for 21 out of 26 subaward agreements tested. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the University of North Dakota implement procedures to ensure risk assessments forms are completed prior the grant award being issued to provide assurance that appropriate subrecipient monitoring will be performed. UNIVERSITY SYSTEM RESPONSE University of North Dakota agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION In the 26 subrecipient awards tested, we found that the University of North Dakota did not sufficiently assess risk for 21 of those. Of the 21 subrecipient awards that were not sufficiently risk assessed, the following was noted: • There was no risk assessment completed for 12 subaward agreements (46%). • Risk assessment forms were completed after 9 subaward agreements had been issued (35%). CRITERIA 2 CFR 200.332 (c) states in part: Evaluate each subrecipient's fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring described in paragraph (f) of this section. When evaluating a subrecipient's risk, a pass-through entity should consider the following: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits. This includes considering whether or not the subrecipient receives a Single Audit in accordance with subpart F and the extent to which the same or similar subawards have been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of any Federal agency monitoring (for example, if the subrecipient also receives Federal awards directly from the Federal agency). During our audit period, University of North Dakota's operating practices stated that a risk assessment was to be completed on each subrecipient entity before a subaward agreement is issued. Institutional, project and threshold questions on the form assess risk of a subrecipient regardless of funding source. The risk assessment will determine whether a risk mitigation strategy should be developed and whether additional requirements should be imposed on the subrecipient. Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. CAUSE University of North Dakota did not have adequate procedures in place to properly monitor subrecipients. EFFECT The University of North Dakota took on additional risk with each subrecipient by not adequately assessing the risk. Each may have a high risk of noncompliance with federal requirements. Additionally, evaluation of risk plays a role in determining the appropriate subrecipient monitoring activities for each subrecipient. As risk assessments were not completed in a timely manner, risk-appropriate monitoring activities may not have been performed. CONTEXT The University of North Dakota had payments to subrecipients that totaled $25,929,781 during fiscal years 2023 and 2024. The University of North Dakota did not properly complete risk assessments for 21 out of 26 subaward agreements tested. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the University of North Dakota implement procedures to ensure risk assessments forms are completed prior the grant award being issued to provide assurance that appropriate subrecipient monitoring will be performed. UNIVERSITY SYSTEM RESPONSE University of North Dakota agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
CONDITION In the 26 subrecipient awards tested, we found that the University of North Dakota did not sufficiently assess risk for 21 of those. Of the 21 subrecipient awards that were not sufficiently risk assessed, the following was noted: • There was no risk assessment completed for 12 subaward agreements (46%). • Risk assessment forms were completed after 9 subaward agreements had been issued (35%). CRITERIA 2 CFR 200.332 (c) states in part: Evaluate each subrecipient's fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring described in paragraph (f) of this section. When evaluating a subrecipient's risk, a pass-through entity should consider the following: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits. This includes considering whether or not the subrecipient receives a Single Audit in accordance with subpart F and the extent to which the same or similar subawards have been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of any Federal agency monitoring (for example, if the subrecipient also receives Federal awards directly from the Federal agency). During our audit period, University of North Dakota's operating practices stated that a risk assessment was to be completed on each subrecipient entity before a subaward agreement is issued. Institutional, project and threshold questions on the form assess risk of a subrecipient regardless of funding source. The risk assessment will determine whether a risk mitigation strategy should be developed and whether additional requirements should be imposed on the subrecipient. Federal regulation, 2 CFR 200.303, requires non-Federal entities, in part, to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. CAUSE University of North Dakota did not have adequate procedures in place to properly monitor subrecipients. EFFECT The University of North Dakota took on additional risk with each subrecipient by not adequately assessing the risk. Each may have a high risk of noncompliance with federal requirements. Additionally, evaluation of risk plays a role in determining the appropriate subrecipient monitoring activities for each subrecipient. As risk assessments were not completed in a timely manner, risk-appropriate monitoring activities may not have been performed. CONTEXT The University of North Dakota had payments to subrecipients that totaled $25,929,781 during fiscal years 2023 and 2024. The University of North Dakota did not properly complete risk assessments for 21 out of 26 subaward agreements tested. Where sampling was performed, the audit used a non-statistical sampling method. IDENTIFICATION AS A REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the University of North Dakota implement procedures to ensure risk assessments forms are completed prior the grant award being issued to provide assurance that appropriate subrecipient monitoring will be performed. UNIVERSITY SYSTEM RESPONSE University of North Dakota agrees with the finding. See “Management’s Response and Corrective Action” section of this report.
FINDING 2024-001 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: 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The data reported by the School Corporation to the Indiana Department of Education contained errors when compared to underlying supporting records of grant activity for the period reported. 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) to meet federal reporting requirements for ESSER grant awards. The Annual Data Reports were prepared by School Corporation management and reviewed by someone other than the preparer, however, the review process in place did not prevent, or detect and correct, errors. During testing of the accuracy of the annual data reports, the following errors were noted: • The Year 2 Annual Data Report for the ESSER III (84.425U) grant award reported total disbursements of $2,219,321 for the period of July 1, 2021 through June 30, 2022 compared to underlying disbursement detail of $2,715,940. • The Year 3 Annual Data Report for the ESSER III (84.425U) grant award reported total disbursements of $224,309 for the period of July 1, 2022 through June 30, 2023 compared to underlying disbursement detail of $306,194. Identification as a repeat finding: Yes, see Finding 2022-009 in the prior period audit report. 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 which includes a comparison to the underlying funds ledger disbursement detail for the same period. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
2 CFR section 200.303 requires that non-Federal entities receiving Federal awards establish and maintain internal control over the Federal awards 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 awards. The School District employs a food service management company to oversee and conduct the activities of the food service department. The School District paid a lump sum to the food service management company each month, but there was no evidence that the School District reviewed any of the supporting invoices to verify amounts paid were for allowable activities and costs. Failure to have policies and procedures over allowable activities, allowable costs could result in unallowable costs and activities being charged to the federal program. The School District should review all detailed invoices from their food service management company. The School District should ensure to only reimburse the food service management company for allowable activities and costs for the Nutrition Cluster Federal Program.
2 CFR section 200.303 requires that non-Federal entities receiving Federal awards establish and maintain internal control over the Federal awards 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 awards. The School District employs a food service management company to oversee and conduct the activities of the food service department. The School District paid a lump sum to the food service management company each month, but there was no evidence that the School District reviewed any of the supporting invoices to verify amounts paid were for allowable activities and costs. Failure to have policies and procedures over allowable activities, allowable costs could result in unallowable costs and activities being charged to the federal program. The School District should review all detailed invoices from their food service management company. The School District should ensure to only reimburse the food service management company for allowable activities and costs for the Nutrition Cluster Federal Program.
2 CFR section 200.303 requires that non-Federal entities receiving Federal awards establish and maintain internal control over the Federal awards 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 awards. The School District employs a food service management company to oversee and conduct the activities of the food service department. The School District paid a lump sum to the food service management company each month, but there was no evidence that the School District reviewed any of the supporting invoices to verify amounts paid were for allowable activities and costs. Failure to have policies and procedures over allowable activities, allowable costs could result in unallowable costs and activities being charged to the federal program. The School District should review all detailed invoices from their food service management company. The School District should ensure to only reimburse the food service management company for allowable activities and costs for the Nutrition Cluster Federal Program.
2 CFR section 200.303 requires that non-Federal entities receiving Federal awards establish and maintain internal control over the Federal awards 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 awards. The School District employs a food service management company to oversee and conduct the activities of the food service department. The School District paid a lump sum to the food service management company each month, but there was no evidence that the School District reviewed any of the supporting invoices to verify amounts paid were for allowable activities and costs. Failure to have policies and procedures over allowable activities, allowable costs could result in unallowable costs and activities being charged to the federal program. The School District should review all detailed invoices from their food service management company. The School District should ensure to only reimburse the food service management company for allowable activities and costs for the Nutrition Cluster Federal Program.
Finding 2024-001: Procurement (Significant Deficiency) Information on the Federal Program: All Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-Federal entity must have written procedures for procurement transactions." Condition: The Organization has a procurement policy, which requires full and open competition for purchases of goods and services in excess of a certain threshold. We noted one instance where procurement procedures were not performed on a purchase in excess of the threshold during the fiscal year. Cause: The Organization's procurement policy is not properly updated to be in conformance with Federal cost principals. Effect or Potential Effect: Purchases of goods and services could be made above the prevailing market rates if the prescribed procurement procedures are not adhered to, and thus, there lies the potential that the Organization will not receive the best value for its purchases. The procurement process should also allow for an evaluation of potential conflicts of interest with prospective vendors and contractors. Furthermore, failure to perform the proper procurement procedures could result in disallowance of Federal expenditures based on lack of fair competition. Questioned Costs: $36,000. Context: The Organization has a procurement policy that is not in compliance with Federal cost principals, and hence, noncompliance with Federal standards. Our audit work in this area consisted of internal control testwork over a random sample of expenditures, as well as substantive testwork over transactions above a defined threshold from select expense accounts that were charged to the Federal program. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that the Organization ensure its policy is updated and in line with Federal cost principals, and distributed and communicated in a formal manner to its employees, and that management properly enforce compliance with its policy. All procurement actions should be clearly documented in writing and maintained in the vendor or contractor files.
Finding 2024-001: Procurement (Significant Deficiency) Information on the Federal Program: All Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-Federal entity must have written procedures for procurement transactions." Condition: The Organization has a procurement policy, which requires full and open competition for purchases of goods and services in excess of a certain threshold. We noted one instance where procurement procedures were not performed on a purchase in excess of the threshold during the fiscal year. Cause: The Organization's procurement policy is not properly updated to be in conformance with Federal cost principals. Effect or Potential Effect: Purchases of goods and services could be made above the prevailing market rates if the prescribed procurement procedures are not adhered to, and thus, there lies the potential that the Organization will not receive the best value for its purchases. The procurement process should also allow for an evaluation of potential conflicts of interest with prospective vendors and contractors. Furthermore, failure to perform the proper procurement procedures could result in disallowance of Federal expenditures based on lack of fair competition. Questioned Costs: $36,000. Context: The Organization has a procurement policy that is not in compliance with Federal cost principals, and hence, noncompliance with Federal standards. Our audit work in this area consisted of internal control testwork over a random sample of expenditures, as well as substantive testwork over transactions above a defined threshold from select expense accounts that were charged to the Federal program. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that the Organization ensure its policy is updated and in line with Federal cost principals, and distributed and communicated in a formal manner to its employees, and that management properly enforce compliance with its policy. All procurement actions should be clearly documented in writing and maintained in the vendor or contractor files.
Finding 2024-001: Procurement (Significant Deficiency) Information on the Federal Program: All Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-Federal entity must have written procedures for procurement transactions." Condition: The Organization has a procurement policy, which requires full and open competition for purchases of goods and services in excess of a certain threshold. We noted one instance where procurement procedures were not performed on a purchase in excess of the threshold during the fiscal year. Cause: The Organization's procurement policy is not properly updated to be in conformance with Federal cost principals. Effect or Potential Effect: Purchases of goods and services could be made above the prevailing market rates if the prescribed procurement procedures are not adhered to, and thus, there lies the potential that the Organization will not receive the best value for its purchases. The procurement process should also allow for an evaluation of potential conflicts of interest with prospective vendors and contractors. Furthermore, failure to perform the proper procurement procedures could result in disallowance of Federal expenditures based on lack of fair competition. Questioned Costs: $36,000. Context: The Organization has a procurement policy that is not in compliance with Federal cost principals, and hence, noncompliance with Federal standards. Our audit work in this area consisted of internal control testwork over a random sample of expenditures, as well as substantive testwork over transactions above a defined threshold from select expense accounts that were charged to the Federal program. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that the Organization ensure its policy is updated and in line with Federal cost principals, and distributed and communicated in a formal manner to its employees, and that management properly enforce compliance with its policy. All procurement actions should be clearly documented in writing and maintained in the vendor or contractor files.
Finding 2024-001: Procurement (Significant Deficiency) Information on the Federal Program: All Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-Federal entity must have written procedures for procurement transactions." Condition: The Organization has a procurement policy, which requires full and open competition for purchases of goods and services in excess of a certain threshold. We noted one instance where procurement procedures were not performed on a purchase in excess of the threshold during the fiscal year. Cause: The Organization's procurement policy is not properly updated to be in conformance with Federal cost principals. Effect or Potential Effect: Purchases of goods and services could be made above the prevailing market rates if the prescribed procurement procedures are not adhered to, and thus, there lies the potential that the Organization will not receive the best value for its purchases. The procurement process should also allow for an evaluation of potential conflicts of interest with prospective vendors and contractors. Furthermore, failure to perform the proper procurement procedures could result in disallowance of Federal expenditures based on lack of fair competition. Questioned Costs: $36,000. Context: The Organization has a procurement policy that is not in compliance with Federal cost principals, and hence, noncompliance with Federal standards. Our audit work in this area consisted of internal control testwork over a random sample of expenditures, as well as substantive testwork over transactions above a defined threshold from select expense accounts that were charged to the Federal program. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that the Organization ensure its policy is updated and in line with Federal cost principals, and distributed and communicated in a formal manner to its employees, and that management properly enforce compliance with its policy. All procurement actions should be clearly documented in writing and maintained in the vendor or contractor files.
Finding 2024-001: Procurement (Significant Deficiency) Information on the Federal Program: All Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-Federal entity must have written procedures for procurement transactions." Condition: The Organization has a procurement policy, which requires full and open competition for purchases of goods and services in excess of a certain threshold. We noted one instance where procurement procedures were not performed on a purchase in excess of the threshold during the fiscal year. Cause: The Organization's procurement policy is not properly updated to be in conformance with Federal cost principals. Effect or Potential Effect: Purchases of goods and services could be made above the prevailing market rates if the prescribed procurement procedures are not adhered to, and thus, there lies the potential that the Organization will not receive the best value for its purchases. The procurement process should also allow for an evaluation of potential conflicts of interest with prospective vendors and contractors. Furthermore, failure to perform the proper procurement procedures could result in disallowance of Federal expenditures based on lack of fair competition. Questioned Costs: $36,000. Context: The Organization has a procurement policy that is not in compliance with Federal cost principals, and hence, noncompliance with Federal standards. Our audit work in this area consisted of internal control testwork over a random sample of expenditures, as well as substantive testwork over transactions above a defined threshold from select expense accounts that were charged to the Federal program. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that the Organization ensure its policy is updated and in line with Federal cost principals, and distributed and communicated in a formal manner to its employees, and that management properly enforce compliance with its policy. All procurement actions should be clearly documented in writing and maintained in the vendor or contractor files.
2024-004. FINDING Failure to Notify Students and Parents Upon Disbursement of Funds Federal Agency: U.S. Department of Education Assistance Listing Numbers: 84.379; 84.268 Program Names: Student Financial Assistance Cluster - Teacher Education Assistance for College and Higher Education Grants Federal Direct Student Loans Program Expenditures: $23,575, $17,736,297 Award Numbers: P379T221351; P268K221351 Questioned Costs: None The Chicago State University (University) did not notify the students and parents upon disbursement of grant funds and loans. Conditions Found During testing of five students, who received Teacher Education Assistance for College and Higher Education (TEACH) Grants totaling $15,088, we noted one (20%) student with a grant disbursement amounting to $3,772 was notified by the University 98 days before the TEACH funds were credited to the student’s account. The sample methods used in performing this testing were not statistically valid. In addition, during testing of 40 students, who received Federal Direct Loans totaling $597,967, we noted the following: • Six (15%) students with grant disbursements totaling $60,860 were not notified by the University indicating the funds were credited to the students’ accounts. • Seven (18%) students with grant disbursements totaling $44,586 were notified 35 to 120 days before or after the Federal Direct Loan funds were credited to the students’ accounts. The sample methods used in performing this testing were not statistically valid. Evaluative Criteria The Code of Federal Regulations (Code) (34 CFR § 668.165 (a)(3)(i)) requires the University to notify students or parents in writing no earlier than 30 days before, and no later than 30 days after, crediting the student’s ledger account at the University with TEACH Grant funds and Federal Direct Loans. Further, the Code (2 CFR § 200.303) requires the nonfederal entity receiving federal awards to establish and maintain effective internal control over the federal award to provide reasonable assurance the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls include procedures to ensure timely notification of disbursements to students receiving TEACH Grants and Federal Direct Loans. Underlying Cause University management indicated the failure to timely notify students and parents upon disbursements of TEACH Grants and Federal Direct Loans was due to a student aid simplification process that caused errors in financial aid processing. University management further indicated the Enterprise Resource Planning (ERP) System experienced a technical glitch during the process of sending notifications to students. Significance Failure to timely notify students and parents regarding grant and loan disbursements represents noncompliance with the Code. (Finding Code No. 2024-004, 2023-005, 2022-005) RECOMMENDATION We recommend the University strengthen controls to ensure timely notifications are sent to students and parents upon disbursement of grant funds and loans. UNIVERSITY RESPONSE The University agrees with the recommendation. An additional level of oversight has been added to ensure the notification of disbursement information is sent in a timely manner. The Associate Director of Financial Aid and the Director of Financial Aid will review the list of disbursements against the list of emails sent to ensure that emails are sent in a timely manner. The additional oversight will begin with the Summer 2025 disbursement based on the date of notification of the issue.
2024-004. FINDING Failure to Notify Students and Parents Upon Disbursement of Funds Federal Agency: U.S. Department of Education Assistance Listing Numbers: 84.379; 84.268 Program Names: Student Financial Assistance Cluster - Teacher Education Assistance for College and Higher Education Grants Federal Direct Student Loans Program Expenditures: $23,575, $17,736,297 Award Numbers: P379T221351; P268K221351 Questioned Costs: None The Chicago State University (University) did not notify the students and parents upon disbursement of grant funds and loans. Conditions Found During testing of five students, who received Teacher Education Assistance for College and Higher Education (TEACH) Grants totaling $15,088, we noted one (20%) student with a grant disbursement amounting to $3,772 was notified by the University 98 days before the TEACH funds were credited to the student’s account. The sample methods used in performing this testing were not statistically valid. In addition, during testing of 40 students, who received Federal Direct Loans totaling $597,967, we noted the following: • Six (15%) students with grant disbursements totaling $60,860 were not notified by the University indicating the funds were credited to the students’ accounts. • Seven (18%) students with grant disbursements totaling $44,586 were notified 35 to 120 days before or after the Federal Direct Loan funds were credited to the students’ accounts. The sample methods used in performing this testing were not statistically valid. Evaluative Criteria The Code of Federal Regulations (Code) (34 CFR § 668.165 (a)(3)(i)) requires the University to notify students or parents in writing no earlier than 30 days before, and no later than 30 days after, crediting the student’s ledger account at the University with TEACH Grant funds and Federal Direct Loans. Further, the Code (2 CFR § 200.303) requires the nonfederal entity receiving federal awards to establish and maintain effective internal control over the federal award to provide reasonable assurance the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls include procedures to ensure timely notification of disbursements to students receiving TEACH Grants and Federal Direct Loans. Underlying Cause University management indicated the failure to timely notify students and parents upon disbursements of TEACH Grants and Federal Direct Loans was due to a student aid simplification process that caused errors in financial aid processing. University management further indicated the Enterprise Resource Planning (ERP) System experienced a technical glitch during the process of sending notifications to students. Significance Failure to timely notify students and parents regarding grant and loan disbursements represents noncompliance with the Code. (Finding Code No. 2024-004, 2023-005, 2022-005) RECOMMENDATION We recommend the University strengthen controls to ensure timely notifications are sent to students and parents upon disbursement of grant funds and loans. UNIVERSITY RESPONSE The University agrees with the recommendation. An additional level of oversight has been added to ensure the notification of disbursement information is sent in a timely manner. The Associate Director of Financial Aid and the Director of Financial Aid will review the list of disbursements against the list of emails sent to ensure that emails are sent in a timely manner. The additional oversight will begin with the Summer 2025 disbursement based on the date of notification of the issue.
Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the reporting compliance requirements. The School Corporation was not formally reviewing the ESSER reports being submitted by comparing the underlying expenditure detail to the amounts reported for each grant for the reporting period. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the reporting requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of a formal internal control system and procedures could have also allowed noncompliance with the compliance requirements and allowed mismanagement of federal funds. Questioned Costs: There were no questioned costs. Context: The School Corporation was required to submit six Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. Crowe noted the following reporting errors for the Year 3 reports (July 1, 2021 through June 30, 2022). The ESSER II amount reported on the Year 3 report ($585,040) did not agree to the underlying expenditure records ($581,468). This is the exact amount reported as the SEA reserve amount on the Annual Data Report. Crowe noted the ESSER III amount reported on the Year 3 report ($0) did not agree to the underlying expenditure records ($351,831). Crowe noted the following reporting error for the Year 4 reports (July 1, 2022 through June 30, 2023). The ESSER III amount reported on the Year 4 report ($1,062,765) did not agree to the underlying expenditure records ($1,054,618). This is the exact amount reported as the SEA reserve amount on the Annual Data Report. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the reporting compliance requirements. We recommend that management attach the expenditure detail to each Annual Data Report, so that the reviewer can easily decipher what expenditure detail makes up the amounts reported on the Annual Data Report for each ESSER report submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the reporting compliance requirements. The School Corporation was not formally reviewing the ESSER reports being submitted by comparing the underlying expenditure detail to the amounts reported for each grant for the reporting period. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the reporting requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of a formal internal control system and procedures could have also allowed noncompliance with the compliance requirements and allowed mismanagement of federal funds. Questioned Costs: There were no questioned costs. Context: The School Corporation was required to submit six Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. Crowe noted the following reporting errors for the Year 3 reports (July 1, 2021 through June 30, 2022). The ESSER II amount reported on the Year 3 report ($585,040) did not agree to the underlying expenditure records ($581,468). This is the exact amount reported as the SEA reserve amount on the Annual Data Report. Crowe noted the ESSER III amount reported on the Year 3 report ($0) did not agree to the underlying expenditure records ($351,831). Crowe noted the following reporting error for the Year 4 reports (July 1, 2022 through June 30, 2023). The ESSER III amount reported on the Year 4 report ($1,062,765) did not agree to the underlying expenditure records ($1,054,618). This is the exact amount reported as the SEA reserve amount on the Annual Data Report. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the reporting compliance requirements. We recommend that management attach the expenditure detail to each Annual Data Report, so that the reviewer can easily decipher what expenditure detail makes up the amounts reported on the Annual Data Report for each ESSER report submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Special Education Cluster – Internal Controls Federal Agency: Department of Education Federal Program: Special Education Preschool Grants Assistance Listing Number: 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 23619-008-PN01; 22619-008-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(i) states: "The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." 2 CFR 200.320(b) states: "Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Special Education Cluster and Procurement and Suspension and Debarment compliance requirements. Cause: A proper system of internal controls was not implemented by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation’s management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect: Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, adequate documentation was not retained for procurements that fell within the small purchase threshold and vendors to whom payments equal to or in excess of $25,000 were made, were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation is a member of the Delaware-Blackford Special Education Cooperative (Cooperative). During fiscal year 2022-2023, the Cooperative operated the special education preschool program and spent the federal money on behalf of six of its seven members. As the grant agreements were between the Indiana Department of Education and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Procurement and Suspension and Debarment compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the procurement and the suspension and debarment requirements. The Cooperative did not have adequate procedures in place to ensure that the requirements for small purchases were met for each applicable procured good or service or to ensure that vendors were not suspended or debarred prior to entering into a covered transaction. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for goods or services does not exceed the simplified acquisition threshold, which is customarily set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. If it is determined a single source provider can be used for a small purchase, documentation must be retained supporting the determination. Two vendors exceeded the small purchase threshold during the audit period. The Cooperative provided evidence of a quote being obtained for the first vendor, however, evidence of obtaining multiple quotes was not retained for audit. The chosen quote was attached to the accounts payable vouchers and provided for audit; however, the other quotes obtained for the purchase were not maintained. For the second vendor, the Cooperative determined psychological services were to be provided by a single source provider, however, they did not have a documented rationale or support for the decision. Documentation detailing the history of procurement, which must include the reason for the procurement method used, selection of the vendor, and the basis for the price, was not available for audit for either purchase. Suspension and Debarment The School Corporation did not have internal controls in place to ensure compliance with the suspension and debarment requirement. The Cooperative did not have adequate internal controls in place to ensure all applicable vendors were not suspended or debarred prior to entering into a covered transaction. As such, the Cooperative entered into a contract totaling $32,388, which exceeded $25,000, for psychological services. The Cooperative did not perform procedures to ensure that the vendor was not suspended or debarred from participation in federal programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Identification as a repeat finding: No. Recommendation: We recommended that management of the School Corporation establish a proper system of internal control and develop policies and procedures to ensure all required documentation is retained and provided for small purchases and to ensure contractors and subrecipients, as appropriate are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Special Education Cluster – Internal Controls Federal Agency: Department of Education Federal Program: Special Education Preschool Grants Assistance Listing Number: 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 23619-008-PN01; 22619-008-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(i) states: "The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." 2 CFR 200.320(b) states: "Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Special Education Cluster and Procurement and Suspension and Debarment compliance requirements. Cause: A proper system of internal controls was not implemented by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation’s management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect: Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, adequate documentation was not retained for procurements that fell within the small purchase threshold and vendors to whom payments equal to or in excess of $25,000 were made, were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation is a member of the Delaware-Blackford Special Education Cooperative (Cooperative). During fiscal year 2022-2023, the Cooperative operated the special education preschool program and spent the federal money on behalf of six of its seven members. As the grant agreements were between the Indiana Department of Education and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Procurement and Suspension and Debarment compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the procurement and the suspension and debarment requirements. The Cooperative did not have adequate procedures in place to ensure that the requirements for small purchases were met for each applicable procured good or service or to ensure that vendors were not suspended or debarred prior to entering into a covered transaction. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for goods or services does not exceed the simplified acquisition threshold, which is customarily set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. If it is determined a single source provider can be used for a small purchase, documentation must be retained supporting the determination. Two vendors exceeded the small purchase threshold during the audit period. The Cooperative provided evidence of a quote being obtained for the first vendor, however, evidence of obtaining multiple quotes was not retained for audit. The chosen quote was attached to the accounts payable vouchers and provided for audit; however, the other quotes obtained for the purchase were not maintained. For the second vendor, the Cooperative determined psychological services were to be provided by a single source provider, however, they did not have a documented rationale or support for the decision. Documentation detailing the history of procurement, which must include the reason for the procurement method used, selection of the vendor, and the basis for the price, was not available for audit for either purchase. Suspension and Debarment The School Corporation did not have internal controls in place to ensure compliance with the suspension and debarment requirement. The Cooperative did not have adequate internal controls in place to ensure all applicable vendors were not suspended or debarred prior to entering into a covered transaction. As such, the Cooperative entered into a contract totaling $32,388, which exceeded $25,000, for psychological services. The Cooperative did not perform procedures to ensure that the vendor was not suspended or debarred from participation in federal programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Identification as a repeat finding: No. Recommendation: We recommended that management of the School Corporation establish a proper system of internal control and develop policies and procedures to ensure all required documentation is retained and provided for small purchases and to ensure contractors and subrecipients, as appropriate are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit two Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER I and ESSER III amounts reported for the reports covering the FY22 time period ($22,163 and $409,347, respectively) did not agree to the underlying expenditure records ($3,796 and $404,347 respectively) for the period of July 1, 2021 through June 30, 2022. Additionally, we noted that the ESSER II amount reported for the reports covering the FY23 time period ($131,439) did not agree to the underlying expenditure records ($153,216) for the period of July 1, 2022 through June 30, 2023). We also noted there was no documented, secondary review of the information in the FY23 annual data reports by someone other than the preparer. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit two Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER I and ESSER III amounts reported for the reports covering the FY22 time period ($22,163 and $409,347, respectively) did not agree to the underlying expenditure records ($3,796 and $404,347 respectively) for the period of July 1, 2021 through June 30, 2022. Additionally, we noted that the ESSER II amount reported for the reports covering the FY23 time period ($131,439) did not agree to the underlying expenditure records ($153,216) for the period of July 1, 2022 through June 30, 2023). We also noted there was no documented, secondary review of the information in the FY23 annual data reports by someone other than the preparer. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit two Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER I and ESSER III amounts reported for the reports covering the FY22 time period ($22,163 and $409,347, respectively) did not agree to the underlying expenditure records ($3,796 and $404,347 respectively) for the period of July 1, 2021 through June 30, 2022. Additionally, we noted that the ESSER II amount reported for the reports covering the FY23 time period ($131,439) did not agree to the underlying expenditure records ($153,216) for the period of July 1, 2022 through June 30, 2023). We also noted there was no documented, secondary review of the information in the FY23 annual data reports by someone other than the preparer. Identification as a repeat finding: No. 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.
Bank reconciliation statements were not closed timely (significant deficiency and noncompliance) Condition: During the testing, it was noted that bank reconciliations were not prepared timely and in one instance, a second review of the reconciliation was not performed as required per the internal control policy. Criteria: 2 CFR section 200.303 states that management must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the subrecipient is managing the Federal award in compliance with Federa statutes, regulations, and the terms and conditions of the Federal award. Cause: For the year ended June 30,2024, auditor noted for two of the operating bank accounts reconciliation statements were prepared and reviewed in the month of August 2024 and one instance where a second review of the reconciliation was not performed as required per the internal control policy. Effect: Management has not maintained effective internal control over the Federal Awards by not following the internal control policy established and documented by the organization. Recommendation: We recommend that management develope specific procedures to ensure that the bank reconciliation statements are prepared and reviewed timely in accordance with the established internal control policy. Response: Management will implement additional controls to ensure that bank reconciliations are prepared timely and that a second review is performed as required per the current internal control policy.
Bank reconciliation statements were not closed timely (significant deficiency and noncompliance) Condition: During the testing, it was noted that bank reconciliations were not prepared timely and in one instance, a second review of the reconciliation was not performed as required per the internal control policy. Criteria: 2 CFR section 200.303 states that management must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the subrecipient is managing the Federal award in compliance with Federa statutes, regulations, and the terms and conditions of the Federal award. Cause: For the year ended June 30,2024, auditor noted for two of the operating bank accounts reconciliation statements were prepared and reviewed in the month of August 2024 and one instance where a second review of the reconciliation was not performed as required per the internal control policy. Effect: Management has not maintained effective internal control over the Federal Awards by not following the internal control policy established and documented by the organization. Recommendation: We recommend that management develope specific procedures to ensure that the bank reconciliation statements are prepared and reviewed timely in accordance with the established internal control policy. Response: Management will implement additional controls to ensure that bank reconciliations are prepared timely and that a second review is performed as required per the current internal control policy.
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: Procurement Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: During the audit period, the School Corporation had purchases between $10,000 and $150,000 from two vendors which fall under the small purchase method for federal and state procurement regulations and were charged to Fund 0800 – School Lunch Fund. For one vendor selected for testing, documentation was not presented to verify the School Corporation had performed checks to assure the vendor was not suspended or debarred prior to entering into the transaction in order to satisfy the suspended and debarment requirements. Identification as a repeat finding, if applicable: This is a repeat finding from the immediately prior audit. The finding number was 2022-002. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: 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: Procurement Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: During the audit period, the School Corporation had purchases between $10,000 and $150,000 from two vendors which fall under the small purchase method for federal and state procurement regulations and were charged to Fund 0800 – School Lunch Fund. For one vendor selected for testing, documentation was not presented to verify the School Corporation had performed checks to assure the vendor was not suspended or debarred prior to entering into the transaction in order to satisfy the suspended and debarment requirements. Identification as a repeat finding, if applicable: This is a repeat finding from the immediately prior audit. The finding number was 2022-002. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: 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: Procurement Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: During the audit period, the School Corporation had purchases between $10,000 and $150,000 from two vendors which fall under the small purchase method for federal and state procurement regulations and were charged to Fund 0800 – School Lunch Fund. For one vendor selected for testing, documentation was not presented to verify the School Corporation had performed checks to assure the vendor was not suspended or debarred prior to entering into the transaction in order to satisfy the suspended and debarment requirements. Identification as a repeat finding, if applicable: This is a repeat finding from the immediately prior audit. The finding number was 2022-002. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: 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: Procurement Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: During the audit period, the School Corporation had purchases between $10,000 and $150,000 from two vendors which fall under the small purchase method for federal and state procurement regulations and were charged to Fund 0800 – School Lunch Fund. For one vendor selected for testing, documentation was not presented to verify the School Corporation had performed checks to assure the vendor was not suspended or debarred prior to entering into the transaction in order to satisfy the suspended and debarment requirements. Identification as a repeat finding, if applicable: This is a repeat finding from the immediately prior audit. The finding number was 2022-002. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: 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). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the eligibility compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with eligibility requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: During testing over controls for eligibility, for 16 of the 60 applications selected, we noted there was no formal evidence that the applications had been reviewed and further, the application did not specify if the student was eligible for free or reduced lunch. We also noted for 2 of the 60 selections, management was unable to provide support for the student that was selected. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and eligibility compliance requirements. We recommend the School Corporation’s management ensure all documentation to support the applicant is maintained in a secure location. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program 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). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the eligibility compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with eligibility requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: During testing over controls for eligibility, for 16 of the 60 applications selected, we noted there was no formal evidence that the applications had been reviewed and further, the application did not specify if the student was eligible for free or reduced lunch. We also noted for 2 of the 60 selections, management was unable to provide support for the student that was selected. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and eligibility compliance requirements. We recommend the School Corporation’s management ensure all documentation to support the applicant is maintained in a secure location. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program 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). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the eligibility compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with eligibility requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: During testing over controls for eligibility, for 16 of the 60 applications selected, we noted there was no formal evidence that the applications had been reviewed and further, the application did not specify if the student was eligible for free or reduced lunch. We also noted for 2 of the 60 selections, management was unable to provide support for the student that was selected. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and eligibility compliance requirements. We recommend the School Corporation’s management ensure all documentation to support the applicant is maintained in a secure location. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program 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). . . ." 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 $540 of 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 for 26 of the 60 applications selected for testing. Additionally, for one of the 60 selections, the student was improperly classified as free when the annual income per the student’s application exceeded the corresponding threshold for that determination. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation's management establish an internal control process to review all applications to determine if the student qualifies for free or reduced meals. There should be a formal sign off in place that the application has been reviewed and the student’s classification of free or reduced is appropriate. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program 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). . . ." 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 $540 of 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 for 26 of the 60 applications selected for testing. Additionally, for one of the 60 selections, the student was improperly classified as free when the annual income per the student’s application exceeded the corresponding threshold for that determination. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation's management establish an internal control process to review all applications to determine if the student qualifies for free or reduced meals. There should be a formal sign off in place that the application has been reviewed and the student’s classification of free or reduced is appropriate. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program 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). . . ." 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 $540 of 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 for 26 of the 60 applications selected for testing. Additionally, for one of the 60 selections, the student was improperly classified as free when the annual income per the student’s application exceeded the corresponding threshold for that determination. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation's management establish an internal control process to review all applications to determine if the student qualifies for free or reduced meals. There should be a formal sign off in place that the application has been reviewed and the student’s classification of free or reduced is appropriate. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-001 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed a system of internal controls in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. A property record or capital asset listing is required to be maintained for all equipment purchased with the COVID-19 - Education Stabilization Fund grant award to ensure adequate safeguards are in place to prevent loss or damage of items. Equipment to be included in the listing is that which exceeds the School Corporation's capital asset threshold of $5,000. The School Corporation's capital asset listing did not include the following required information: The source of funding for the property (including the federal award identification number). The percentage of federal participation in the project costs for the federal award under which the property was acquired. In one instance, it did not include an identification number. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 GREENSBURG COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause The School Corporation's management was not aware of all the items required to be included in the capital asset listing. Effect The failure to establish an effective system of internal controls placed the School Corporation in noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation's capital asset listing did not include all information required for assets acquired with federal funds. Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls that would ensure compliance with the Equipment and Real Property management records and update its capital asset listing to include all required information. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed a system of internal controls in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. A property record or capital asset listing is required to be maintained for all equipment purchased with the COVID-19 - Education Stabilization Fund grant award to ensure adequate safeguards are in place to prevent loss or damage of items. Equipment to be included in the listing is that which exceeds the School Corporation's capital asset threshold of $5,000. The School Corporation's capital asset listing did not include the following required information: The source of funding for the property (including the federal award identification number). The percentage of federal participation in the project costs for the federal award under which the property was acquired. In one instance, it did not include an identification number. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 GREENSBURG COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause The School Corporation's management was not aware of all the items required to be included in the capital asset listing. Effect The failure to establish an effective system of internal controls placed the School Corporation in noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation's capital asset listing did not include all information required for assets acquired with federal funds. Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls that would ensure compliance with the Equipment and Real Property management records and update its capital asset listing to include all required information. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed a system of internal controls in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. A property record or capital asset listing is required to be maintained for all equipment purchased with the COVID-19 - Education Stabilization Fund grant award to ensure adequate safeguards are in place to prevent loss or damage of items. Equipment to be included in the listing is that which exceeds the School Corporation's capital asset threshold of $5,000. The School Corporation's capital asset listing did not include the following required information: The source of funding for the property (including the federal award identification number). The percentage of federal participation in the project costs for the federal award under which the property was acquired. In one instance, it did not include an identification number. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 GREENSBURG COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause The School Corporation's management was not aware of all the items required to be included in the capital asset listing. Effect The failure to establish an effective system of internal controls placed the School Corporation in noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation's capital asset listing did not include all information required for assets acquired with federal funds. Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls that would ensure compliance with the Equipment and Real Property management records and update its capital asset listing to include all required information. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed a system of internal controls in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. A property record or capital asset listing is required to be maintained for all equipment purchased with the COVID-19 - Education Stabilization Fund grant award to ensure adequate safeguards are in place to prevent loss or damage of items. Equipment to be included in the listing is that which exceeds the School Corporation's capital asset threshold of $5,000. The School Corporation's capital asset listing did not include the following required information: The source of funding for the property (including the federal award identification number). The percentage of federal participation in the project costs for the federal award under which the property was acquired. In one instance, it did not include an identification number. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 GREENSBURG COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause The School Corporation's management was not aware of all the items required to be included in the capital asset listing. Effect The failure to establish an effective system of internal controls placed the School Corporation in noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation's capital asset listing did not include all information required for assets acquired with federal funds. Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls that would ensure compliance with the Equipment and Real Property management records and update its capital asset listing to include all required information. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed a system of internal controls in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. A property record or capital asset listing is required to be maintained for all equipment purchased with the COVID-19 - Education Stabilization Fund grant award to ensure adequate safeguards are in place to prevent loss or damage of items. Equipment to be included in the listing is that which exceeds the School Corporation's capital asset threshold of $5,000. The School Corporation's capital asset listing did not include the following required information: The source of funding for the property (including the federal award identification number). The percentage of federal participation in the project costs for the federal award under which the property was acquired. In one instance, it did not include an identification number. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 GREENSBURG COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause The School Corporation's management was not aware of all the items required to be included in the capital asset listing. Effect The failure to establish an effective system of internal controls placed the School Corporation in noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation's capital asset listing did not include all information required for assets acquired with federal funds. Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls that would ensure compliance with the Equipment and Real Property management records and update its capital asset listing to include all required information. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed a system of internal controls in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. A property record or capital asset listing is required to be maintained for all equipment purchased with the COVID-19 - Education Stabilization Fund grant award to ensure adequate safeguards are in place to prevent loss or damage of items. Equipment to be included in the listing is that which exceeds the School Corporation's capital asset threshold of $5,000. The School Corporation's capital asset listing did not include the following required information: The source of funding for the property (including the federal award identification number). The percentage of federal participation in the project costs for the federal award under which the property was acquired. In one instance, it did not include an identification number. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 GREENSBURG COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause The School Corporation's management was not aware of all the items required to be included in the capital asset listing. Effect The failure to establish an effective system of internal controls placed the School Corporation in noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation's capital asset listing did not include all information required for assets acquired with federal funds. Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls that would ensure compliance with the Equipment and Real Property management records and update its capital asset listing to include all required information. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: Special Education Cluster (IDEA) - Equipment and Real Property Management Federal Agency: Department of Education Federal Programs: COVID-19 - Special Education Grants to States, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027X, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-144-ARP, 22619-144-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context 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 Equipment and Real Property Management compliance requirements. A property record or capital asset listing is required to be maintained for all equipment purchased with the COVID-19 - Education Stabilization Fund grant award to ensure adequate safeguards are in place to prevent loss or damage of items. Equipment to be included in the listing is that which exceeds the School Corporation's capital asset threshold of $5,000. The School Corporation's capital asset listing did not include the following required information: The source of funding for the property (including the federal award identification number). The percentage of federal participation in the project costs for the federal award under which the property was acquired. The use and condition of the asset. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: INDIANA STATE BOARD OF ACCOUNTS 18 GREENSBURG COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause The School Corporation's management was not aware of all the items required to be included in the capital asset listing. Effect The failure to establish an effective system of internal controls placed the School Corporation in noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation's capital asset listing did not include all information required for assets acquired with federal funds. Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls that would ensure compliance with the equipment and real property management records and update its capital asset listing to include all required information. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: Special Education Cluster (IDEA) - Equipment and Real Property Management Federal Agency: Department of Education Federal Programs: COVID-19 - Special Education Grants to States, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027X, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-144-ARP, 22619-144-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context 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 Equipment and Real Property Management compliance requirements. A property record or capital asset listing is required to be maintained for all equipment purchased with the COVID-19 - Education Stabilization Fund grant award to ensure adequate safeguards are in place to prevent loss or damage of items. Equipment to be included in the listing is that which exceeds the School Corporation's capital asset threshold of $5,000. The School Corporation's capital asset listing did not include the following required information: The source of funding for the property (including the federal award identification number). The percentage of federal participation in the project costs for the federal award under which the property was acquired. The use and condition of the asset. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: INDIANA STATE BOARD OF ACCOUNTS 18 GREENSBURG COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause The School Corporation's management was not aware of all the items required to be included in the capital asset listing. Effect The failure to establish an effective system of internal controls placed the School Corporation in noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation's capital asset listing did not include all information required for assets acquired with federal funds. Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls that would ensure compliance with the equipment and real property management records and update its capital asset listing to include all required information. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Indiana Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027A, 84.027X, 84.173A, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-144-PN01, 22619-144-PN01, 23611-144-PN01, 23619-144-PN01, 22611-144-ARP, 22619-144-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure that the School Corporation complied with Earmarking compliance requirements. The School Corporation did not have adequate procedures in place to ensure the required level of expenditures for nonpublic school students was met. The School Corporation's payroll-related disbursements for Non-Public Proportionate Share were estimated based on actual hours worked by School Corporation staff at nonpublic schools in the previous school year. This amount was allocated over the biweekly salaries of employees providing services at the nonpublic schools. This resulted in a fixed amount of each biweekly pay being charged to the nonpublic accounts regardless of actual time spent by employees with nonpublic students in the given pay period. There was no reconciliation process between budgeted hours and actual hours worked with nonpublic students during each pay period. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." INDIANA STATE BOARD OF ACCOUNTS 20 GREENSBURG COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed, . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." Cause Management of the School Corporation had not designed a system of internal controls that would have ensured that time worked by certified staff for nonpublic schools was properly identified. Internal controls in place did not identify that an improper method was used to identify expenditures for nonpublic students with disabilities. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation was unable to ensure that the proportionate share required to be expended for nonpublic students was met. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure the Non-Public Proportionate Share amounts are spent based on actual charged time by staff working with the nonpublic students. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Indiana Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027A, 84.027X, 84.173A, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-144-PN01, 22619-144-PN01, 23611-144-PN01, 23619-144-PN01, 22611-144-ARP, 22619-144-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure that the School Corporation complied with Earmarking compliance requirements. The School Corporation did not have adequate procedures in place to ensure the required level of expenditures for nonpublic school students was met. The School Corporation's payroll-related disbursements for Non-Public Proportionate Share were estimated based on actual hours worked by School Corporation staff at nonpublic schools in the previous school year. This amount was allocated over the biweekly salaries of employees providing services at the nonpublic schools. This resulted in a fixed amount of each biweekly pay being charged to the nonpublic accounts regardless of actual time spent by employees with nonpublic students in the given pay period. There was no reconciliation process between budgeted hours and actual hours worked with nonpublic students during each pay period. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." INDIANA STATE BOARD OF ACCOUNTS 20 GREENSBURG COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed, . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." Cause Management of the School Corporation had not designed a system of internal controls that would have ensured that time worked by certified staff for nonpublic schools was properly identified. Internal controls in place did not identify that an improper method was used to identify expenditures for nonpublic students with disabilities. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation was unable to ensure that the proportionate share required to be expended for nonpublic students was met. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure the Non-Public Proportionate Share amounts are spent based on actual charged time by staff working with the nonpublic students. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Indiana Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027A, 84.027X, 84.173A, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-144-PN01, 22619-144-PN01, 23611-144-PN01, 23619-144-PN01, 22611-144-ARP, 22619-144-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure that the School Corporation complied with Earmarking compliance requirements. The School Corporation did not have adequate procedures in place to ensure the required level of expenditures for nonpublic school students was met. The School Corporation's payroll-related disbursements for Non-Public Proportionate Share were estimated based on actual hours worked by School Corporation staff at nonpublic schools in the previous school year. This amount was allocated over the biweekly salaries of employees providing services at the nonpublic schools. This resulted in a fixed amount of each biweekly pay being charged to the nonpublic accounts regardless of actual time spent by employees with nonpublic students in the given pay period. There was no reconciliation process between budgeted hours and actual hours worked with nonpublic students during each pay period. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." INDIANA STATE BOARD OF ACCOUNTS 20 GREENSBURG COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed, . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." Cause Management of the School Corporation had not designed a system of internal controls that would have ensured that time worked by certified staff for nonpublic schools was properly identified. Internal controls in place did not identify that an improper method was used to identify expenditures for nonpublic students with disabilities. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation was unable to ensure that the proportionate share required to be expended for nonpublic students was met. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure the Non-Public Proportionate Share amounts are spent based on actual charged time by staff working with the nonpublic students. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Indiana Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027A, 84.027X, 84.173A, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-144-PN01, 22619-144-PN01, 23611-144-PN01, 23619-144-PN01, 22611-144-ARP, 22619-144-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure that the School Corporation complied with Earmarking compliance requirements. The School Corporation did not have adequate procedures in place to ensure the required level of expenditures for nonpublic school students was met. The School Corporation's payroll-related disbursements for Non-Public Proportionate Share were estimated based on actual hours worked by School Corporation staff at nonpublic schools in the previous school year. This amount was allocated over the biweekly salaries of employees providing services at the nonpublic schools. This resulted in a fixed amount of each biweekly pay being charged to the nonpublic accounts regardless of actual time spent by employees with nonpublic students in the given pay period. There was no reconciliation process between budgeted hours and actual hours worked with nonpublic students during each pay period. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." INDIANA STATE BOARD OF ACCOUNTS 20 GREENSBURG COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed, . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." Cause Management of the School Corporation had not designed a system of internal controls that would have ensured that time worked by certified staff for nonpublic schools was properly identified. Internal controls in place did not identify that an improper method was used to identify expenditures for nonpublic students with disabilities. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation was unable to ensure that the proportionate share required to be expended for nonpublic students was met. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure the Non-Public Proportionate Share amounts are spent based on actual charged time by staff working with the nonpublic students. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Indiana Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027A, 84.027X, 84.173A, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-144-PN01, 22619-144-PN01, 23611-144-PN01, 23619-144-PN01, 22611-144-ARP, 22619-144-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure that the School Corporation complied with Earmarking compliance requirements. The School Corporation did not have adequate procedures in place to ensure the required level of expenditures for nonpublic school students was met. The School Corporation's payroll-related disbursements for Non-Public Proportionate Share were estimated based on actual hours worked by School Corporation staff at nonpublic schools in the previous school year. This amount was allocated over the biweekly salaries of employees providing services at the nonpublic schools. This resulted in a fixed amount of each biweekly pay being charged to the nonpublic accounts regardless of actual time spent by employees with nonpublic students in the given pay period. There was no reconciliation process between budgeted hours and actual hours worked with nonpublic students during each pay period. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." INDIANA STATE BOARD OF ACCOUNTS 20 GREENSBURG COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed, . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." Cause Management of the School Corporation had not designed a system of internal controls that would have ensured that time worked by certified staff for nonpublic schools was properly identified. Internal controls in place did not identify that an improper method was used to identify expenditures for nonpublic students with disabilities. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation was unable to ensure that the proportionate share required to be expended for nonpublic students was met. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure the Non-Public Proportionate Share amounts are spent based on actual charged time by staff working with the nonpublic students. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Indiana Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027A, 84.027X, 84.173A, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-144-PN01, 22619-144-PN01, 23611-144-PN01, 23619-144-PN01, 22611-144-ARP, 22619-144-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure that the School Corporation complied with Earmarking compliance requirements. The School Corporation did not have adequate procedures in place to ensure the required level of expenditures for nonpublic school students was met. The School Corporation's payroll-related disbursements for Non-Public Proportionate Share were estimated based on actual hours worked by School Corporation staff at nonpublic schools in the previous school year. This amount was allocated over the biweekly salaries of employees providing services at the nonpublic schools. This resulted in a fixed amount of each biweekly pay being charged to the nonpublic accounts regardless of actual time spent by employees with nonpublic students in the given pay period. There was no reconciliation process between budgeted hours and actual hours worked with nonpublic students during each pay period. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." INDIANA STATE BOARD OF ACCOUNTS 20 GREENSBURG COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed, . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." Cause Management of the School Corporation had not designed a system of internal controls that would have ensured that time worked by certified staff for nonpublic schools was properly identified. Internal controls in place did not identify that an improper method was used to identify expenditures for nonpublic students with disabilities. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation was unable to ensure that the proportionate share required to be expended for nonpublic students was met. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure the Non-Public Proportionate Share amounts are spent based on actual charged time by staff working with the nonpublic students. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Special Education Cluster (IDEA) - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 21611-035-PN01, 22611-035-PN01, 21619-035-PN01, 22611-035-ARP, 23611-035-PN01, 24611-035-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 18 SCOTT COUNTY SCHOOL DISTRICT 1 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation was a participating member of the Madison Area Education Special Services Unit Cooperative (Cooperative). The School Corporation was reimbursed by the Cooperative, based on invoices prepared and submitted by the School Corporation for payments to substitute teachers and audit costs related to the special education grants. Because the grant agreements were between the Indiana Department of Education and the School Corporation, the School Corporation was ultimately responsible for compliance with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements. During the audit period, the Deputy Treasurer would prepare Excel spreadsheets of reimbursable expenses and submit them directly to the Cooperative without any secondary review. There was no evidence of administrative oversight of the invoice preparation and submission process by another knowledgeable individual to ensure that the amounts invoiced were for activities allowed, that the costs were allowable, and were for costs incurred during the period of performance. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements for reimbursable expenses paid by the School Corporation. Those expenses were submitted to the Cooperative for reimbursement from the special education grant funds without any secondary review to ensure that they were legitimate expenses that could be paid from the grant. Effect The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements. Noncompliance could have resulted in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 19 SCOTT COUNTY SCHOOL DISTRICT 1 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that the School Corporation's management establish and implement a system of internal controls related to the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Special Education Cluster (IDEA) - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 21611-035-PN01, 22611-035-PN01, 21619-035-PN01, 22611-035-ARP, 23611-035-PN01, 24611-035-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Audit Finding: Material Weakness INDIANA STATE BOARD OF ACCOUNTS 18 SCOTT COUNTY SCHOOL DISTRICT 1 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation was a participating member of the Madison Area Education Special Services Unit Cooperative (Cooperative). The School Corporation was reimbursed by the Cooperative, based on invoices prepared and submitted by the School Corporation for payments to substitute teachers and audit costs related to the special education grants. Because the grant agreements were between the Indiana Department of Education and the School Corporation, the School Corporation was ultimately responsible for compliance with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements. During the audit period, the Deputy Treasurer would prepare Excel spreadsheets of reimbursable expenses and submit them directly to the Cooperative without any secondary review. There was no evidence of administrative oversight of the invoice preparation and submission process by another knowledgeable individual to ensure that the amounts invoiced were for activities allowed, that the costs were allowable, and were for costs incurred during the period of performance. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements for reimbursable expenses paid by the School Corporation. Those expenses were submitted to the Cooperative for reimbursement from the special education grant funds without any secondary review to ensure that they were legitimate expenses that could be paid from the grant. Effect The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements. Noncompliance could have resulted in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 19 SCOTT COUNTY SCHOOL DISTRICT 1 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that the School Corporation's management establish and implement a system of internal controls related to the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.