FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion 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 Special Tests and Provisions - Wage Rate Requirements compliance requirement. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. The School Corporation had four applicable construction projects, funded in part or entirely with ESF funding during the audit period; however, related contracts did not contain the required prevailing wage rate clause. Additionally, the School Corporation did not obtain certified payroll documentation from contractors as required throughout the construction projects and audit period. The lack of internal controls was a systemic issue throughout the audit period and noncompliance affected each of the four applicable construction projects. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) Required contract clauses. The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in § 5.1, the following clauses . . . (1) Minimum wages. (i) Wages rates and fringe benefits. All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (a)(3)(ii) Certified payroll requirements— (A) The contractor or subcontractor must submit weekly, for each week in which any DBA- or Related Acts-covered work is performed, certified payrolls to the [write in name of appropriate Federal agency] if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the certified payrolls to the applicant, sponsor, owner, or other entity, as the case may be, that maintains such records, for transmission to the [write in name of agency]. . . ." 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, 'Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction'). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week." Cause The School Corporation officials were unaware of the requirements to include Wage Rate Requirements (Davis Bacon) provisions in the respective construction contracts and obtain weekly certified payrolls from the contractor(s) throughout the construction period. Effect The lack of an effective internal control system enabled material noncompliance with the grant agreement and the aforementioned compliance requirement to occur and remain undetected. Lack of compliance could result in contractors paying wages below those required by the DOL regulations. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and include the wage rate requirement clause in federally funded construction contracts. In addition, certified payrolls should be obtained as required for all federally funded construction contracts in excess of $2,000. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-004 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-004. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed or implemented a system of internal controls to ensure that the Elementary and Secondary School Emergency Relief (ESSER) annual data reports (Reports) were complete and accurately submitted. The Reports were prepared by the Director of Business Affairs without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause The Jotform system in which ESSER annual reports are submitted to the Indiana Department of Education (IDOE) does not have a required review built into the IT system. The School Corporation officials were unaware they should document a review of the annual reports. Effect The lack of an effective internal control system could enable noncompliance to occur and remain undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in inaccurate reporting to the IDOE and the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance with the grant agreement and the Reporting compliance requirement. Any and all future ESSER reports submitted in Jotform should document an oversight, review, or approval process by someone other than the Director of Business Affairs. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion 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 Special Tests and Provisions - Wage Rate Requirements compliance requirement. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. The School Corporation had four applicable construction projects, funded in part or entirely with ESF funding during the audit period; however, related contracts did not contain the required prevailing wage rate clause. Additionally, the School Corporation did not obtain certified payroll documentation from contractors as required throughout the construction projects and audit period. The lack of internal controls was a systemic issue throughout the audit period and noncompliance affected each of the four applicable construction projects. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) Required contract clauses. The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in § 5.1, the following clauses . . . (1) Minimum wages. (i) Wages rates and fringe benefits. All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (a)(3)(ii) Certified payroll requirements— (A) The contractor or subcontractor must submit weekly, for each week in which any DBA- or Related Acts-covered work is performed, certified payrolls to the [write in name of appropriate Federal agency] if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the certified payrolls to the applicant, sponsor, owner, or other entity, as the case may be, that maintains such records, for transmission to the [write in name of agency]. . . ." 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, 'Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction'). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week." Cause The School Corporation officials were unaware of the requirements to include Wage Rate Requirements (Davis Bacon) provisions in the respective construction contracts and obtain weekly certified payrolls from the contractor(s) throughout the construction period. Effect The lack of an effective internal control system enabled material noncompliance with the grant agreement and the aforementioned compliance requirement to occur and remain undetected. Lack of compliance could result in contractors paying wages below those required by the DOL regulations. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and include the wage rate requirement clause in federally funded construction contracts. In addition, certified payrolls should be obtained as required for all federally funded construction contracts in excess of $2,000. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-004 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-004. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed or implemented a system of internal controls to ensure that the Elementary and Secondary School Emergency Relief (ESSER) annual data reports (Reports) were complete and accurately submitted. The Reports were prepared by the Director of Business Affairs without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause The Jotform system in which ESSER annual reports are submitted to the Indiana Department of Education (IDOE) does not have a required review built into the IT system. The School Corporation officials were unaware they should document a review of the annual reports. Effect The lack of an effective internal control system could enable noncompliance to occur and remain undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in inaccurate reporting to the IDOE and the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance with the grant agreement and the Reporting compliance requirement. Any and all future ESSER reports submitted in Jotform should document an oversight, review, or approval process by someone other than the Director of Business Affairs. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion 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 Special Tests and Provisions - Wage Rate Requirements compliance requirement. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. The School Corporation had four applicable construction projects, funded in part or entirely with ESF funding during the audit period; however, related contracts did not contain the required prevailing wage rate clause. Additionally, the School Corporation did not obtain certified payroll documentation from contractors as required throughout the construction projects and audit period. The lack of internal controls was a systemic issue throughout the audit period and noncompliance affected each of the four applicable construction projects. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) Required contract clauses. The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in § 5.1, the following clauses . . . (1) Minimum wages. (i) Wages rates and fringe benefits. All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (a)(3)(ii) Certified payroll requirements— (A) The contractor or subcontractor must submit weekly, for each week in which any DBA- or Related Acts-covered work is performed, certified payrolls to the [write in name of appropriate Federal agency] if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the certified payrolls to the applicant, sponsor, owner, or other entity, as the case may be, that maintains such records, for transmission to the [write in name of agency]. . . ." 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, 'Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction'). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week." Cause The School Corporation officials were unaware of the requirements to include Wage Rate Requirements (Davis Bacon) provisions in the respective construction contracts and obtain weekly certified payrolls from the contractor(s) throughout the construction period. Effect The lack of an effective internal control system enabled material noncompliance with the grant agreement and the aforementioned compliance requirement to occur and remain undetected. Lack of compliance could result in contractors paying wages below those required by the DOL regulations. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and include the wage rate requirement clause in federally funded construction contracts. In addition, certified payrolls should be obtained as required for all federally funded construction contracts in excess of $2,000. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-004 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-004. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed or implemented a system of internal controls to ensure that the Elementary and Secondary School Emergency Relief (ESSER) annual data reports (Reports) were complete and accurately submitted. The Reports were prepared by the Director of Business Affairs without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause The Jotform system in which ESSER annual reports are submitted to the Indiana Department of Education (IDOE) does not have a required review built into the IT system. The School Corporation officials were unaware they should document a review of the annual reports. Effect The lack of an effective internal control system could enable noncompliance to occur and remain undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in inaccurate reporting to the IDOE and the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance with the grant agreement and the Reporting compliance requirement. Any and all future ESSER reports submitted in Jotform should document an oversight, review, or approval process by someone other than the Director of Business Affairs. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion 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 Special Tests and Provisions - Wage Rate Requirements compliance requirement. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. The School Corporation had four applicable construction projects, funded in part or entirely with ESF funding during the audit period; however, related contracts did not contain the required prevailing wage rate clause. Additionally, the School Corporation did not obtain certified payroll documentation from contractors as required throughout the construction projects and audit period. The lack of internal controls was a systemic issue throughout the audit period and noncompliance affected each of the four applicable construction projects. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) Required contract clauses. The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in § 5.1, the following clauses . . . (1) Minimum wages. (i) Wages rates and fringe benefits. All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (a)(3)(ii) Certified payroll requirements— (A) The contractor or subcontractor must submit weekly, for each week in which any DBA- or Related Acts-covered work is performed, certified payrolls to the [write in name of appropriate Federal agency] if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the certified payrolls to the applicant, sponsor, owner, or other entity, as the case may be, that maintains such records, for transmission to the [write in name of agency]. . . ." 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, 'Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction'). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week." Cause The School Corporation officials were unaware of the requirements to include Wage Rate Requirements (Davis Bacon) provisions in the respective construction contracts and obtain weekly certified payrolls from the contractor(s) throughout the construction period. Effect The lack of an effective internal control system enabled material noncompliance with the grant agreement and the aforementioned compliance requirement to occur and remain undetected. Lack of compliance could result in contractors paying wages below those required by the DOL regulations. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and include the wage rate requirement clause in federally funded construction contracts. In addition, certified payrolls should be obtained as required for all federally funded construction contracts in excess of $2,000. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-004 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-004. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed or implemented a system of internal controls to ensure that the Elementary and Secondary School Emergency Relief (ESSER) annual data reports (Reports) were complete and accurately submitted. The Reports were prepared by the Director of Business Affairs without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause The Jotform system in which ESSER annual reports are submitted to the Indiana Department of Education (IDOE) does not have a required review built into the IT system. The School Corporation officials were unaware they should document a review of the annual reports. Effect The lack of an effective internal control system could enable noncompliance to occur and remain undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in inaccurate reporting to the IDOE and the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance with the grant agreement and the Reporting compliance requirement. Any and all future ESSER reports submitted in Jotform should document an oversight, review, or approval process by someone other than the Director of Business Affairs. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion 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 Special Tests and Provisions - Wage Rate Requirements compliance requirement. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. The School Corporation had four applicable construction projects, funded in part or entirely with ESF funding during the audit period; however, related contracts did not contain the required prevailing wage rate clause. Additionally, the School Corporation did not obtain certified payroll documentation from contractors as required throughout the construction projects and audit period. The lack of internal controls was a systemic issue throughout the audit period and noncompliance affected each of the four applicable construction projects. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) Required contract clauses. The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in § 5.1, the following clauses . . . (1) Minimum wages. (i) Wages rates and fringe benefits. All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (a)(3)(ii) Certified payroll requirements— (A) The contractor or subcontractor must submit weekly, for each week in which any DBA- or Related Acts-covered work is performed, certified payrolls to the [write in name of appropriate Federal agency] if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the certified payrolls to the applicant, sponsor, owner, or other entity, as the case may be, that maintains such records, for transmission to the [write in name of agency]. . . ." 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, 'Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction'). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week." Cause The School Corporation officials were unaware of the requirements to include Wage Rate Requirements (Davis Bacon) provisions in the respective construction contracts and obtain weekly certified payrolls from the contractor(s) throughout the construction period. Effect The lack of an effective internal control system enabled material noncompliance with the grant agreement and the aforementioned compliance requirement to occur and remain undetected. Lack of compliance could result in contractors paying wages below those required by the DOL regulations. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and include the wage rate requirement clause in federally funded construction contracts. In addition, certified payrolls should be obtained as required for all federally funded construction contracts in excess of $2,000. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-004 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-004. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed or implemented a system of internal controls to ensure that the Elementary and Secondary School Emergency Relief (ESSER) annual data reports (Reports) were complete and accurately submitted. The Reports were prepared by the Director of Business Affairs without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause The Jotform system in which ESSER annual reports are submitted to the Indiana Department of Education (IDOE) does not have a required review built into the IT system. The School Corporation officials were unaware they should document a review of the annual reports. Effect The lack of an effective internal control system could enable noncompliance to occur and remain undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in inaccurate reporting to the IDOE and the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance with the grant agreement and the Reporting compliance requirement. Any and all future ESSER reports submitted in Jotform should document an oversight, review, or approval process by someone other than the Director of Business Affairs. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion 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 Special Tests and Provisions - Wage Rate Requirements compliance requirement. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. The School Corporation had four applicable construction projects, funded in part or entirely with ESF funding during the audit period; however, related contracts did not contain the required prevailing wage rate clause. Additionally, the School Corporation did not obtain certified payroll documentation from contractors as required throughout the construction projects and audit period. The lack of internal controls was a systemic issue throughout the audit period and noncompliance affected each of the four applicable construction projects. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) Required contract clauses. The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in § 5.1, the following clauses . . . (1) Minimum wages. (i) Wages rates and fringe benefits. All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (a)(3)(ii) Certified payroll requirements— (A) The contractor or subcontractor must submit weekly, for each week in which any DBA- or Related Acts-covered work is performed, certified payrolls to the [write in name of appropriate Federal agency] if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the certified payrolls to the applicant, sponsor, owner, or other entity, as the case may be, that maintains such records, for transmission to the [write in name of agency]. . . ." 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, 'Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction'). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week." Cause The School Corporation officials were unaware of the requirements to include Wage Rate Requirements (Davis Bacon) provisions in the respective construction contracts and obtain weekly certified payrolls from the contractor(s) throughout the construction period. Effect The lack of an effective internal control system enabled material noncompliance with the grant agreement and the aforementioned compliance requirement to occur and remain undetected. Lack of compliance could result in contractors paying wages below those required by the DOL regulations. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and include the wage rate requirement clause in federally funded construction contracts. In addition, certified payrolls should be obtained as required for all federally funded construction contracts in excess of $2,000. 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: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): SY2022-2023, SY2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-001. Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to the purchase of goods and services that fell within the small purchase threshold or were considered covered transactions. Procurement - Small Purchases When the value of goods or services exceeds the simplified acquisition threshold, the proper purchasing method would be the bidding process, unless the purchase meets certain other qualifications. 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 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. The School Corporation had not designed or implemented internal controls, which would consist of policies and procedures, to ensure that proper procurement procedures for small purchases were followed. A population of two small purchase vendors for fiscal year ending June 30, 2023; and a population of three small purchase venders for fiscal year ending June 30, 2024, were identified. All five were selected for testing. For three of the five small purchase transactions, totaling $102,026, the School Corporation did not obtain price or rate quotes nor was there documentation detailing the history of procurement, which must include the reason for the procurement method used. INDIANA STATE BOARD OF ACCOUNTS 16 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAM exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. The School Corporation had not designed or implemented internal controls, which would consist of policies and procedures, to ensure that vendors were not suspended or debarred prior to entering into a covered transaction. The School Corporation had three covered transactions that equaled or exceeded $25,000 during the audit period that were identified and selected for testing. Payments to the vendors, totaling $194,537, were made without verifying if the vendors were suspended, debarred, or otherwise excluded from participation in federal awards. 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 200.318(a) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non- Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327." 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." Indiana Code 5-22-8-3(d) states: "If the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required." INDIANA STATE BOARD OF ACCOUNTS 17 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 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 the SAM.gov Exclusions, or (b) Collecting a certification from that person, or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed and implemented by management of the School Corporation, which would include segregation of key functions. The School Corporation did not adequately perform suspension and debarment procedures and were not aware of small purchase requirements. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, price or rate quotes were not obtained for small purchases and vendors to whom payments equal to or in excess of $25,000 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. INDIANA STATE BOARD OF ACCOUNTS 18 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a system of internal controls and develop policies and procedures to ensure rate or price quotes are obtained for small purchases and 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 For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): SY2022-2023, SY2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-001. Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to the purchase of goods and services that fell within the small purchase threshold or were considered covered transactions. Procurement - Small Purchases When the value of goods or services exceeds the simplified acquisition threshold, the proper purchasing method would be the bidding process, unless the purchase meets certain other qualifications. 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 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. The School Corporation had not designed or implemented internal controls, which would consist of policies and procedures, to ensure that proper procurement procedures for small purchases were followed. A population of two small purchase vendors for fiscal year ending June 30, 2023; and a population of three small purchase venders for fiscal year ending June 30, 2024, were identified. All five were selected for testing. For three of the five small purchase transactions, totaling $102,026, the School Corporation did not obtain price or rate quotes nor was there documentation detailing the history of procurement, which must include the reason for the procurement method used. INDIANA STATE BOARD OF ACCOUNTS 16 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAM exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. The School Corporation had not designed or implemented internal controls, which would consist of policies and procedures, to ensure that vendors were not suspended or debarred prior to entering into a covered transaction. The School Corporation had three covered transactions that equaled or exceeded $25,000 during the audit period that were identified and selected for testing. Payments to the vendors, totaling $194,537, were made without verifying if the vendors were suspended, debarred, or otherwise excluded from participation in federal awards. 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 200.318(a) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non- Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327." 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." Indiana Code 5-22-8-3(d) states: "If the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required." INDIANA STATE BOARD OF ACCOUNTS 17 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 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 the SAM.gov Exclusions, or (b) Collecting a certification from that person, or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed and implemented by management of the School Corporation, which would include segregation of key functions. The School Corporation did not adequately perform suspension and debarment procedures and were not aware of small purchase requirements. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, price or rate quotes were not obtained for small purchases and vendors to whom payments equal to or in excess of $25,000 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. INDIANA STATE BOARD OF ACCOUNTS 18 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a system of internal controls and develop policies and procedures to ensure rate or price quotes are obtained for small purchases and 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 For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): SY2022-2023, SY2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-001. Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to the purchase of goods and services that fell within the small purchase threshold or were considered covered transactions. Procurement - Small Purchases When the value of goods or services exceeds the simplified acquisition threshold, the proper purchasing method would be the bidding process, unless the purchase meets certain other qualifications. 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 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. The School Corporation had not designed or implemented internal controls, which would consist of policies and procedures, to ensure that proper procurement procedures for small purchases were followed. A population of two small purchase vendors for fiscal year ending June 30, 2023; and a population of three small purchase venders for fiscal year ending June 30, 2024, were identified. All five were selected for testing. For three of the five small purchase transactions, totaling $102,026, the School Corporation did not obtain price or rate quotes nor was there documentation detailing the history of procurement, which must include the reason for the procurement method used. INDIANA STATE BOARD OF ACCOUNTS 16 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAM exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. The School Corporation had not designed or implemented internal controls, which would consist of policies and procedures, to ensure that vendors were not suspended or debarred prior to entering into a covered transaction. The School Corporation had three covered transactions that equaled or exceeded $25,000 during the audit period that were identified and selected for testing. Payments to the vendors, totaling $194,537, were made without verifying if the vendors were suspended, debarred, or otherwise excluded from participation in federal awards. 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 200.318(a) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non- Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327." 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." Indiana Code 5-22-8-3(d) states: "If the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required." INDIANA STATE BOARD OF ACCOUNTS 17 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 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 the SAM.gov Exclusions, or (b) Collecting a certification from that person, or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed and implemented by management of the School Corporation, which would include segregation of key functions. The School Corporation did not adequately perform suspension and debarment procedures and were not aware of small purchase requirements. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, price or rate quotes were not obtained for small purchases and vendors to whom payments equal to or in excess of $25,000 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. INDIANA STATE BOARD OF ACCOUNTS 18 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a system of internal controls and develop policies and procedures to ensure rate or price quotes are obtained for small purchases and 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 For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): SY2022-2023, SY2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-001. Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to the purchase of goods and services that fell within the small purchase threshold or were considered covered transactions. Procurement - Small Purchases When the value of goods or services exceeds the simplified acquisition threshold, the proper purchasing method would be the bidding process, unless the purchase meets certain other qualifications. 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 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. The School Corporation had not designed or implemented internal controls, which would consist of policies and procedures, to ensure that proper procurement procedures for small purchases were followed. A population of two small purchase vendors for fiscal year ending June 30, 2023; and a population of three small purchase venders for fiscal year ending June 30, 2024, were identified. All five were selected for testing. For three of the five small purchase transactions, totaling $102,026, the School Corporation did not obtain price or rate quotes nor was there documentation detailing the history of procurement, which must include the reason for the procurement method used. INDIANA STATE BOARD OF ACCOUNTS 16 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAM exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. The School Corporation had not designed or implemented internal controls, which would consist of policies and procedures, to ensure that vendors were not suspended or debarred prior to entering into a covered transaction. The School Corporation had three covered transactions that equaled or exceeded $25,000 during the audit period that were identified and selected for testing. Payments to the vendors, totaling $194,537, were made without verifying if the vendors were suspended, debarred, or otherwise excluded from participation in federal awards. 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 200.318(a) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non- Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327." 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." Indiana Code 5-22-8-3(d) states: "If the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required." INDIANA STATE BOARD OF ACCOUNTS 17 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 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 the SAM.gov Exclusions, or (b) Collecting a certification from that person, or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed and implemented by management of the School Corporation, which would include segregation of key functions. The School Corporation did not adequately perform suspension and debarment procedures and were not aware of small purchase requirements. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, price or rate quotes were not obtained for small purchases and vendors to whom payments equal to or in excess of $25,000 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. INDIANA STATE BOARD OF ACCOUNTS 18 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a system of internal controls and develop policies and procedures to ensure rate or price quotes are obtained for small purchases and 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 For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): SY2022-2023, SY2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to determining the eligibility of a child to receive free or reduced-price meals. A child's eligibility for free or reduced-price meals under a Child Nutrition Cluster program may be established by the submission of an annual application or statement which furnishes such information as family income and family size. Local educational agencies, institutions, and sponsors then determine eligibility by comparing the data reported by the child's household to published income eligibility guidelines. Additionally, a child may be direct certified. For a direct certification, annual eligibility determinations are based on the child's household receiving benefits under the Supplemental Nutrition Assistance Program (SNAP), the Food Distribution Program on the Indian Reservations (FDPIR), the Head Start program (ALN 93.600), or, under most circumstances, the Temporary Assistance for Needy Families (TANF) program (ALN 93.558). A household may furnish documentation of its participation in one of these programs; or the school, institution, or sponsor may obtain the information directly from the state or local agency that administers these programs. Certain foster, runaway, homeless, and migrant children are categorically eligible for free school lunches and breakfasts. Direct certified households do not need to complete an application for free or reduced-price meals. The School Corporation contracted with a Food Service Management Company (FSMC) for the operation of the food service program during the audit period. The FSMC had a dedicated representative who worked exclusively with the School Corporation. The School Corporation did not have policies or procedures in place to ensure compliance with determining the eligibility of students for free and reduce price meals as noted in the following: INDIANA STATE BOARD OF ACCOUNTS 19 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Direct Certifications The FSMC representative was responsible for generating and reviewing the direct certification file. The FSMC representative downloaded the direct certification file from the State of Indiana database and uploaded it to the school lunch point-of-sale (POS) system. There was no documentation of review by the School Corporation to ensure the upload had been completed, that the upload had imported correctly, or the students' statuses were updated accordingly. Applications The School Corporation utilized a POS system to determine eligibility of the applications submitted for free and reduced price meals based on income eligibility guidelines. The income eligibility guidelines were input by the FSMC representative and reviewed by a knowledgeable school employee for the year ended June 30, 2024; however, there was no documented review or approval in place to ensure the guidelines were properly entered for the year ended June 30, 2023. Applications were submitted online as part of the annual registration process, and, when fully complete, the determination of eligibility was completed by the POS system based on the inputted income eligibility guidelines. The School Corporation relied solely on the POS system to calculate and determine the eligibility status of student applications. There was no documentation of procedures or review to ensure the software system was accurately calculating and determining the student eligibility status. Of the 30 students receiving free and reduced-price meals that were tested, the following noncompliance was noted: Two students were receiving free meals but, based on reported income, were determined to be eligible for reduced-priced meals. Two students were receiving reduced-price meals but, based on reported income, were determined to be eligible for free meals. The lack of internal controls and noncompliance were systemic 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 20 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 245.6(c)(4) states: "The local educational agency must use the income information provided by the household on the application to calculate the household's total current income. When a household submits an application containing complete documentation, as defined in § 245.2, and the household's total current income is at or below the eligibility limits specified in the Income Eligibility Guidelines as defined in § 245.2, the children in that household must be approved for free or reduced price benefits, as applicable." Cause The system of internal controls over the monthly direct certification uploads, review of the income eligibility guidelines saved in the POS system, and application records were not properly implemented. The School Corporation relied on the FSMC and the POS to determine eligibility without an oversight process in place. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation did not calculate eligibility accurately. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would ensure student eligibility for free or reduced-price lunches is accurately determined and that all documentation is retained. 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: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): SY2022-2023, SY2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to determining the eligibility of a child to receive free or reduced-price meals. A child's eligibility for free or reduced-price meals under a Child Nutrition Cluster program may be established by the submission of an annual application or statement which furnishes such information as family income and family size. Local educational agencies, institutions, and sponsors then determine eligibility by comparing the data reported by the child's household to published income eligibility guidelines. Additionally, a child may be direct certified. For a direct certification, annual eligibility determinations are based on the child's household receiving benefits under the Supplemental Nutrition Assistance Program (SNAP), the Food Distribution Program on the Indian Reservations (FDPIR), the Head Start program (ALN 93.600), or, under most circumstances, the Temporary Assistance for Needy Families (TANF) program (ALN 93.558). A household may furnish documentation of its participation in one of these programs; or the school, institution, or sponsor may obtain the information directly from the state or local agency that administers these programs. Certain foster, runaway, homeless, and migrant children are categorically eligible for free school lunches and breakfasts. Direct certified households do not need to complete an application for free or reduced-price meals. The School Corporation contracted with a Food Service Management Company (FSMC) for the operation of the food service program during the audit period. The FSMC had a dedicated representative who worked exclusively with the School Corporation. The School Corporation did not have policies or procedures in place to ensure compliance with determining the eligibility of students for free and reduce price meals as noted in the following: INDIANA STATE BOARD OF ACCOUNTS 19 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Direct Certifications The FSMC representative was responsible for generating and reviewing the direct certification file. The FSMC representative downloaded the direct certification file from the State of Indiana database and uploaded it to the school lunch point-of-sale (POS) system. There was no documentation of review by the School Corporation to ensure the upload had been completed, that the upload had imported correctly, or the students' statuses were updated accordingly. Applications The School Corporation utilized a POS system to determine eligibility of the applications submitted for free and reduced price meals based on income eligibility guidelines. The income eligibility guidelines were input by the FSMC representative and reviewed by a knowledgeable school employee for the year ended June 30, 2024; however, there was no documented review or approval in place to ensure the guidelines were properly entered for the year ended June 30, 2023. Applications were submitted online as part of the annual registration process, and, when fully complete, the determination of eligibility was completed by the POS system based on the inputted income eligibility guidelines. The School Corporation relied solely on the POS system to calculate and determine the eligibility status of student applications. There was no documentation of procedures or review to ensure the software system was accurately calculating and determining the student eligibility status. Of the 30 students receiving free and reduced-price meals that were tested, the following noncompliance was noted: Two students were receiving free meals but, based on reported income, were determined to be eligible for reduced-priced meals. Two students were receiving reduced-price meals but, based on reported income, were determined to be eligible for free meals. The lack of internal controls and noncompliance were systemic 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 20 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 245.6(c)(4) states: "The local educational agency must use the income information provided by the household on the application to calculate the household's total current income. When a household submits an application containing complete documentation, as defined in § 245.2, and the household's total current income is at or below the eligibility limits specified in the Income Eligibility Guidelines as defined in § 245.2, the children in that household must be approved for free or reduced price benefits, as applicable." Cause The system of internal controls over the monthly direct certification uploads, review of the income eligibility guidelines saved in the POS system, and application records were not properly implemented. The School Corporation relied on the FSMC and the POS to determine eligibility without an oversight process in place. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation did not calculate eligibility accurately. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would ensure student eligibility for free or reduced-price lunches is accurately determined and that all documentation is retained. 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: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): SY2022-2023, SY2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to determining the eligibility of a child to receive free or reduced-price meals. A child's eligibility for free or reduced-price meals under a Child Nutrition Cluster program may be established by the submission of an annual application or statement which furnishes such information as family income and family size. Local educational agencies, institutions, and sponsors then determine eligibility by comparing the data reported by the child's household to published income eligibility guidelines. Additionally, a child may be direct certified. For a direct certification, annual eligibility determinations are based on the child's household receiving benefits under the Supplemental Nutrition Assistance Program (SNAP), the Food Distribution Program on the Indian Reservations (FDPIR), the Head Start program (ALN 93.600), or, under most circumstances, the Temporary Assistance for Needy Families (TANF) program (ALN 93.558). A household may furnish documentation of its participation in one of these programs; or the school, institution, or sponsor may obtain the information directly from the state or local agency that administers these programs. Certain foster, runaway, homeless, and migrant children are categorically eligible for free school lunches and breakfasts. Direct certified households do not need to complete an application for free or reduced-price meals. The School Corporation contracted with a Food Service Management Company (FSMC) for the operation of the food service program during the audit period. The FSMC had a dedicated representative who worked exclusively with the School Corporation. The School Corporation did not have policies or procedures in place to ensure compliance with determining the eligibility of students for free and reduce price meals as noted in the following: INDIANA STATE BOARD OF ACCOUNTS 19 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Direct Certifications The FSMC representative was responsible for generating and reviewing the direct certification file. The FSMC representative downloaded the direct certification file from the State of Indiana database and uploaded it to the school lunch point-of-sale (POS) system. There was no documentation of review by the School Corporation to ensure the upload had been completed, that the upload had imported correctly, or the students' statuses were updated accordingly. Applications The School Corporation utilized a POS system to determine eligibility of the applications submitted for free and reduced price meals based on income eligibility guidelines. The income eligibility guidelines were input by the FSMC representative and reviewed by a knowledgeable school employee for the year ended June 30, 2024; however, there was no documented review or approval in place to ensure the guidelines were properly entered for the year ended June 30, 2023. Applications were submitted online as part of the annual registration process, and, when fully complete, the determination of eligibility was completed by the POS system based on the inputted income eligibility guidelines. The School Corporation relied solely on the POS system to calculate and determine the eligibility status of student applications. There was no documentation of procedures or review to ensure the software system was accurately calculating and determining the student eligibility status. Of the 30 students receiving free and reduced-price meals that were tested, the following noncompliance was noted: Two students were receiving free meals but, based on reported income, were determined to be eligible for reduced-priced meals. Two students were receiving reduced-price meals but, based on reported income, were determined to be eligible for free meals. The lack of internal controls and noncompliance were systemic 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 20 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 245.6(c)(4) states: "The local educational agency must use the income information provided by the household on the application to calculate the household's total current income. When a household submits an application containing complete documentation, as defined in § 245.2, and the household's total current income is at or below the eligibility limits specified in the Income Eligibility Guidelines as defined in § 245.2, the children in that household must be approved for free or reduced price benefits, as applicable." Cause The system of internal controls over the monthly direct certification uploads, review of the income eligibility guidelines saved in the POS system, and application records were not properly implemented. The School Corporation relied on the FSMC and the POS to determine eligibility without an oversight process in place. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation did not calculate eligibility accurately. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would ensure student eligibility for free or reduced-price lunches is accurately determined and that all documentation is retained. 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: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): SY2022-2023, SY2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to determining the eligibility of a child to receive free or reduced-price meals. A child's eligibility for free or reduced-price meals under a Child Nutrition Cluster program may be established by the submission of an annual application or statement which furnishes such information as family income and family size. Local educational agencies, institutions, and sponsors then determine eligibility by comparing the data reported by the child's household to published income eligibility guidelines. Additionally, a child may be direct certified. For a direct certification, annual eligibility determinations are based on the child's household receiving benefits under the Supplemental Nutrition Assistance Program (SNAP), the Food Distribution Program on the Indian Reservations (FDPIR), the Head Start program (ALN 93.600), or, under most circumstances, the Temporary Assistance for Needy Families (TANF) program (ALN 93.558). A household may furnish documentation of its participation in one of these programs; or the school, institution, or sponsor may obtain the information directly from the state or local agency that administers these programs. Certain foster, runaway, homeless, and migrant children are categorically eligible for free school lunches and breakfasts. Direct certified households do not need to complete an application for free or reduced-price meals. The School Corporation contracted with a Food Service Management Company (FSMC) for the operation of the food service program during the audit period. The FSMC had a dedicated representative who worked exclusively with the School Corporation. The School Corporation did not have policies or procedures in place to ensure compliance with determining the eligibility of students for free and reduce price meals as noted in the following: INDIANA STATE BOARD OF ACCOUNTS 19 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Direct Certifications The FSMC representative was responsible for generating and reviewing the direct certification file. The FSMC representative downloaded the direct certification file from the State of Indiana database and uploaded it to the school lunch point-of-sale (POS) system. There was no documentation of review by the School Corporation to ensure the upload had been completed, that the upload had imported correctly, or the students' statuses were updated accordingly. Applications The School Corporation utilized a POS system to determine eligibility of the applications submitted for free and reduced price meals based on income eligibility guidelines. The income eligibility guidelines were input by the FSMC representative and reviewed by a knowledgeable school employee for the year ended June 30, 2024; however, there was no documented review or approval in place to ensure the guidelines were properly entered for the year ended June 30, 2023. Applications were submitted online as part of the annual registration process, and, when fully complete, the determination of eligibility was completed by the POS system based on the inputted income eligibility guidelines. The School Corporation relied solely on the POS system to calculate and determine the eligibility status of student applications. There was no documentation of procedures or review to ensure the software system was accurately calculating and determining the student eligibility status. Of the 30 students receiving free and reduced-price meals that were tested, the following noncompliance was noted: Two students were receiving free meals but, based on reported income, were determined to be eligible for reduced-priced meals. Two students were receiving reduced-price meals but, based on reported income, were determined to be eligible for free meals. The lack of internal controls and noncompliance were systemic 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 20 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 245.6(c)(4) states: "The local educational agency must use the income information provided by the household on the application to calculate the household's total current income. When a household submits an application containing complete documentation, as defined in § 245.2, and the household's total current income is at or below the eligibility limits specified in the Income Eligibility Guidelines as defined in § 245.2, the children in that household must be approved for free or reduced price benefits, as applicable." Cause The system of internal controls over the monthly direct certification uploads, review of the income eligibility guidelines saved in the POS system, and application records were not properly implemented. The School Corporation relied on the FSMC and the POS to determine eligibility without an oversight process in place. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation did not calculate eligibility accurately. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would ensure student eligibility for free or reduced-price lunches is accurately determined and that all documentation is retained. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-004 Subject: Special Education Cluster (IDEA) - Suspension and Debarment Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listings Number: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-046-PN01, 23611-046-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 21 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation is a member of the Porter County Education Interlocal (Cooperative). During fiscal year 2022-2023, the Cooperative operated the special education programs and spent the federal money on behalf of all its 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 the Debarment compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the suspension and debarment requirements. The Cooperative did not have effective internal controls to ensure compliance with the suspension and debarment requirements. Prior to entering into covered transactions with grant award funds, entities are required to verify that vendors under covered transactions are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods or services awarded under procurement and nonprocurement transactions (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the System for Award Management (SAM) exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Upon inquiry of the Cooperative in order to review procedures in place for verifying that an entity with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the Cooperative explained that if the covered transaction had a contract, the contract was verified to make sure the clause for suspension and debarment was included. However, if the covered transaction did not involve a contract, the Cooperative did not have procedures in place to verify the suspension and debarment requirements. A population of five covered transactions for goods or services that equaled or exceeded $25,000 paid from grant award funds during the audit period was identified. Three of the five covered transactions did not have documentation to show that they were verified for the suspension and debarment requirements. The lack of internal controls and noncompliance were 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). . . ." 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: INDIANA STATE BOARD OF ACCOUNTS 22 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking the SAM.gov Exclusions, or (b) Collecting a certification from that person, or (c) Adding a clause or condition to the covered transaction with that person." Cause The Cooperative indicated that if the covered transaction had a contract, the contract was verified to make sure the clause for suspension and debarment was included. However, if the covered transaction did not involve a contract, the Cooperative did not have procedures in place to verify the suspension and debarment requirements. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be 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. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure vendors are not suspended, debarred, or otherwise excluded prior to entering into any covered transactions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-004 Subject: Special Education Cluster (IDEA) - Suspension and Debarment Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listings Number: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-046-PN01, 23611-046-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 21 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation is a member of the Porter County Education Interlocal (Cooperative). During fiscal year 2022-2023, the Cooperative operated the special education programs and spent the federal money on behalf of all its 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 the Debarment compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the suspension and debarment requirements. The Cooperative did not have effective internal controls to ensure compliance with the suspension and debarment requirements. Prior to entering into covered transactions with grant award funds, entities are required to verify that vendors under covered transactions are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods or services awarded under procurement and nonprocurement transactions (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the System for Award Management (SAM) exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Upon inquiry of the Cooperative in order to review procedures in place for verifying that an entity with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the Cooperative explained that if the covered transaction had a contract, the contract was verified to make sure the clause for suspension and debarment was included. However, if the covered transaction did not involve a contract, the Cooperative did not have procedures in place to verify the suspension and debarment requirements. A population of five covered transactions for goods or services that equaled or exceeded $25,000 paid from grant award funds during the audit period was identified. Three of the five covered transactions did not have documentation to show that they were verified for the suspension and debarment requirements. The lack of internal controls and noncompliance were 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). . . ." 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: INDIANA STATE BOARD OF ACCOUNTS 22 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking the SAM.gov Exclusions, or (b) Collecting a certification from that person, or (c) Adding a clause or condition to the covered transaction with that person." Cause The Cooperative indicated that if the covered transaction had a contract, the contract was verified to make sure the clause for suspension and debarment was included. However, if the covered transaction did not involve a contract, the Cooperative did not have procedures in place to verify the suspension and debarment requirements. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be 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. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure vendors are not suspended, debarred, or otherwise excluded prior to entering into any covered transactions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States Assistance Listings Number: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-046-PN01, 22611-046-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 23 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation is a member of the Porter County Education Services (Cooperative). During fiscal year 2023-2024, the Cooperative operated the special education program and spent the federal money on behalf of all its members. As the grant agreement was between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for nonpublic school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure nonpublic school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for the 22611-046-PN01 and 22611-046-ARP grant awards could not be verified for the individual member schools. Total grant expenditures were posted as expended. The nonpublic proportionate share expenditures were determined by applying a percentage to the nonpublic school budgeted expenditures. As such, we were unable to identify if the minimum amount per the grant award was expended and properly reported to the IDOE as required. The lack of internal controls and noncompliance was isolated to the 22611-046-PN01 and 22611-046-ARP grant awards. 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. . . ." 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." INDIANA STATE BOARD OF ACCOUNTS 24 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Through inquiry of the Cooperative management, they were unaware of the requirements to track nonpublic proportionate share expenditures directly for each member school. While the Cooperative did implement new processes and procedures to ensure expenditures were tracked by member schools starting in July 2022, all of the grant awards had been allocated to the member schools based on a percentage of the budget. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation was unable to ensure the Cooperative compliance with earmarking requirements and the Cooperative was unable to track expenditures for nonpublic services for each member school. Consequently, the amounts requested for reimbursement were not supported by actual expenditures, but rather a percentage based on the budget per member school. Because of this, expenditures were not accurately reported to the oversight agency. 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 nonpublic proportionate share funds are appropriately allocated to the member school based on expenditures charged directly on behalf of the member school. Supporting documentation for these expenditures should be retained for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States Assistance Listings Number: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-046-PN01, 22611-046-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 23 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation is a member of the Porter County Education Services (Cooperative). During fiscal year 2023-2024, the Cooperative operated the special education program and spent the federal money on behalf of all its members. As the grant agreement was between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for nonpublic school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure nonpublic school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for the 22611-046-PN01 and 22611-046-ARP grant awards could not be verified for the individual member schools. Total grant expenditures were posted as expended. The nonpublic proportionate share expenditures were determined by applying a percentage to the nonpublic school budgeted expenditures. As such, we were unable to identify if the minimum amount per the grant award was expended and properly reported to the IDOE as required. The lack of internal controls and noncompliance was isolated to the 22611-046-PN01 and 22611-046-ARP grant awards. 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. . . ." 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." INDIANA STATE BOARD OF ACCOUNTS 24 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Through inquiry of the Cooperative management, they were unaware of the requirements to track nonpublic proportionate share expenditures directly for each member school. While the Cooperative did implement new processes and procedures to ensure expenditures were tracked by member schools starting in July 2022, all of the grant awards had been allocated to the member schools based on a percentage of the budget. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation was unable to ensure the Cooperative compliance with earmarking requirements and the Cooperative was unable to track expenditures for nonpublic services for each member school. Consequently, the amounts requested for reimbursement were not supported by actual expenditures, but rather a percentage based on the budget per member school. Because of this, expenditures were not accurately reported to the oversight agency. 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 nonpublic proportionate share funds are appropriately allocated to the member school based on expenditures charged directly on behalf of the member school. Supporting documentation for these expenditures should be retained for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States Assistance Listings Number: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-046-PN01, 22611-046-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 23 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation is a member of the Porter County Education Services (Cooperative). During fiscal year 2023-2024, the Cooperative operated the special education program and spent the federal money on behalf of all its members. As the grant agreement was between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for nonpublic school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure nonpublic school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for the 22611-046-PN01 and 22611-046-ARP grant awards could not be verified for the individual member schools. Total grant expenditures were posted as expended. The nonpublic proportionate share expenditures were determined by applying a percentage to the nonpublic school budgeted expenditures. As such, we were unable to identify if the minimum amount per the grant award was expended and properly reported to the IDOE as required. The lack of internal controls and noncompliance was isolated to the 22611-046-PN01 and 22611-046-ARP grant awards. 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. . . ." 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." INDIANA STATE BOARD OF ACCOUNTS 24 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Through inquiry of the Cooperative management, they were unaware of the requirements to track nonpublic proportionate share expenditures directly for each member school. While the Cooperative did implement new processes and procedures to ensure expenditures were tracked by member schools starting in July 2022, all of the grant awards had been allocated to the member schools based on a percentage of the budget. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation was unable to ensure the Cooperative compliance with earmarking requirements and the Cooperative was unable to track expenditures for nonpublic services for each member school. Consequently, the amounts requested for reimbursement were not supported by actual expenditures, but rather a percentage based on the budget per member school. Because of this, expenditures were not accurately reported to the oversight agency. 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 nonpublic proportionate share funds are appropriately allocated to the member school based on expenditures charged directly on behalf of the member school. Supporting documentation for these expenditures should be retained for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States Assistance Listings Number: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-046-PN01, 22611-046-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 23 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation is a member of the Porter County Education Services (Cooperative). During fiscal year 2023-2024, the Cooperative operated the special education program and spent the federal money on behalf of all its members. As the grant agreement was between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for nonpublic school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure nonpublic school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for the 22611-046-PN01 and 22611-046-ARP grant awards could not be verified for the individual member schools. Total grant expenditures were posted as expended. The nonpublic proportionate share expenditures were determined by applying a percentage to the nonpublic school budgeted expenditures. As such, we were unable to identify if the minimum amount per the grant award was expended and properly reported to the IDOE as required. The lack of internal controls and noncompliance was isolated to the 22611-046-PN01 and 22611-046-ARP grant awards. 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. . . ." 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." INDIANA STATE BOARD OF ACCOUNTS 24 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Through inquiry of the Cooperative management, they were unaware of the requirements to track nonpublic proportionate share expenditures directly for each member school. While the Cooperative did implement new processes and procedures to ensure expenditures were tracked by member schools starting in July 2022, all of the grant awards had been allocated to the member schools based on a percentage of the budget. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation was unable to ensure the Cooperative compliance with earmarking requirements and the Cooperative was unable to track expenditures for nonpublic services for each member school. Consequently, the amounts requested for reimbursement were not supported by actual expenditures, but rather a percentage based on the budget per member school. Because of this, expenditures were not accurately reported to the oversight agency. 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 nonpublic proportionate share funds are appropriately allocated to the member school based on expenditures charged directly on behalf of the member school. Supporting documentation for these expenditures should be retained for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding Number: 2024‐001 Repeat Finding: No Program Name/Assistance Listing Title: Education Stabilization Fund Assistance Listing Number: 84.425 Federal Agency: U.S. Department of Education Federal Award Number: S425U210038, S425W210003 Pass‐Through Agency: Arizona Department of Education Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Reporting Criteria In accordance with 2 CFR 200.303, management is responsible for establishing and maintaining internal controls over federal programs. This includes the development of a system to ensure documentation is maintained to support all reported figures and counts as it relates to federal programs. Condition The District lacked proper internal controls over preparation of the annual reporting required for the Education Stabilization Fund. Cause The annual report was not reviewed by someone other than the preparer. Effect The annual report contained errors in the number of ESSER funded positions and also indicated the District allocated ESSER funds to schools, when in fact they did not. Context The number of ESSER funded positions reported to the Arizona Department of Education did not agree to the FTE Statistics report for each specific position. In total, positions did not agree by 45 positions. Recommendation The District should ensure reported figures agree to supporting documentation and that annual reports are reviewed by someone other than the preparer. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2024‐001 Repeat Finding: No Program Name/Assistance Listing Title: Education Stabilization Fund Assistance Listing Number: 84.425 Federal Agency: U.S. Department of Education Federal Award Number: S425U210038, S425W210003 Pass‐Through Agency: Arizona Department of Education Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Reporting Criteria In accordance with 2 CFR 200.303, management is responsible for establishing and maintaining internal controls over federal programs. This includes the development of a system to ensure documentation is maintained to support all reported figures and counts as it relates to federal programs. Condition The District lacked proper internal controls over preparation of the annual reporting required for the Education Stabilization Fund. Cause The annual report was not reviewed by someone other than the preparer. Effect The annual report contained errors in the number of ESSER funded positions and also indicated the District allocated ESSER funds to schools, when in fact they did not. Context The number of ESSER funded positions reported to the Arizona Department of Education did not agree to the FTE Statistics report for each specific position. In total, positions did not agree by 45 positions. Recommendation The District should ensure reported figures agree to supporting documentation and that annual reports are reviewed by someone other than the preparer. Views of Responsible Officials See Corrective Action Plan.
Finding 2024-001 – Procurements and Suspension and Debarment Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Agency: U.S. Department of the Treasury Passed Through: N/A – Direct Program Award Year: Fiscal Year 2023-2024 Compliance Requirement: Procurement and Suspension and Debarment Questioned Costs: $0 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.303 states that the non- Federal entity (County) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per § 200.332, recipients and subrecipients are subject to the procurement and debarment and suspension regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. Condition During our testing of procurement and suspension and debarment, we noted six (6) instances where the County did not keep record for verifying that an entity with which it planned to enter into a covered transaction was not debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. Cause of Condition The County’s existing internal control system is not operating effectively to provide reasonable assurance that procurement procedures in place comply with the procurement requirements related to the program. Repeat Finding No. Effect of Condition There is increased risk of noncompliance with the procurement requirement as set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Failure to conduct proper verifications before engaging in a covered transaction with an entity could result in fraud, waste, and abuse of federal funds.Recommendation We recommend the County design and implement internal control activities over the procurement and suspension and debarment compliance requirement under the Uniform Guidance. We also recommend the County keeps adequate records for verifying the contractors receiving federal grant funding were not debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. Management Response and Corrective Action Plan The County has confirmed that the internal procurement process incorporates the verification that contractors are in possession of valid, applicable licenses and are not barred, suspended or otherwise excluded from receiving federal funds prior to engaging in contracted work. Reference to this process has not been regularly documented; going forward, verifications will be documented on the contract review cover sheet to further support the completion of the process. Copies of supporting documentation will be attached, when applicable, to demonstrate eligibility.
Information on the federal program: Subject: Special Education Cluster – Internal Controls Federal Agency: Department of Education Federal Program: Special Education Cluster Assistance Listing Number: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-122-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles 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 Activities Allowed or Unallowed, Allowable Costs/Cost Principles 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. The School Corporation did not have an internal control in place to review the underlying expenditures to determine if they were allowable in accordance with federal requirements. Effect: The failure to 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 pays one hundred percent of its Special Education Cluster funding to one service provider. For 1 of the 5 sample payments to the service provider, the School Corporation only reviewed a summary level invoice from the service provider which did not include the underlying support or detail of the reimbursable costs incurred by the service provider. The sample amount paid to the service provider without underlying support or detail was $1,138,684. The lack of underlying support was isolated to the 22611-122-PN01 grant. The School Corporation received the support for all other payments tested. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-002. Recommendation: We recommend the School Corporation implement a formal review of all expenditures incurred by the vendor by reviewing the underlying support for the expenditures incurred by the vendor. 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 Cluster Assistance Listing Number: 84.027, 84.027X, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-122-PN01, 23611-122-PN01, 24611-122-PN01, 22611-122-ARP, 22619-122-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Cash Management Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." For grants and cooperative agreements to non-federal entities that are paid on a reimbursement basis, supporting documentation shows that the costs for which reimbursement was requested were paid prior to the date of the reimbursement request. Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the federal award to the recipient (2 CFR section 200.305(b)(1)). 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 Cash Management compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with cash management for reimbursement grants. The School Corporation did not have a design control in place to ensure that service provider invoices were paid prior to the submitting reimbursements to the Indiana Department of Education (IDOE). 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. Questioned Costs: There were no questioned costs identified. Context: The School Corporation pays one hundred percent of its Special Education Cluster funding to one service provider, which totaled $3,782,381 for the audit period. For all invoices during the audit period, the School Corporation submitted and received reimbursement from the IDOE prior to paying the service provider, and then the School Corporation remitted payment to the service provider. There was significant delay in the time between the School Corporation was reimbursed by IDOE and when the School Corporation paid the service provider. The delay in payment was in the range of 2 – 4 months for the payments made during the audit period. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-003. Recommendation: We recommend the School Corporation implement procedures to ensure the invoices are paid before submitting draw requests and receiving funds from IDOE. 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 Cluster Assistance Listing Number: 84.027, 84.027X, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-122-PN01, 23611-122-PN01, 24611-122-PN01, 22611-122-ARP, 22619-122-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Cash Management Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." For grants and cooperative agreements to non-federal entities that are paid on a reimbursement basis, supporting documentation shows that the costs for which reimbursement was requested were paid prior to the date of the reimbursement request. Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the federal award to the recipient (2 CFR section 200.305(b)(1)). 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 Cash Management compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with cash management for reimbursement grants. The School Corporation did not have a design control in place to ensure that service provider invoices were paid prior to the submitting reimbursements to the Indiana Department of Education (IDOE). 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. Questioned Costs: There were no questioned costs identified. Context: The School Corporation pays one hundred percent of its Special Education Cluster funding to one service provider, which totaled $3,782,381 for the audit period. For all invoices during the audit period, the School Corporation submitted and received reimbursement from the IDOE prior to paying the service provider, and then the School Corporation remitted payment to the service provider. There was significant delay in the time between the School Corporation was reimbursed by IDOE and when the School Corporation paid the service provider. The delay in payment was in the range of 2 – 4 months for the payments made during the audit period. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-003. Recommendation: We recommend the School Corporation implement procedures to ensure the invoices are paid before submitting draw requests and receiving funds from IDOE. 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 Cluster Assistance Listing Number: 84.027, 84.027X, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-122-PN01, 23611-122-PN01, 24611-122-PN01, 22611-122-ARP, 22619-122-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Cash Management Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." For grants and cooperative agreements to non-federal entities that are paid on a reimbursement basis, supporting documentation shows that the costs for which reimbursement was requested were paid prior to the date of the reimbursement request. Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the federal award to the recipient (2 CFR section 200.305(b)(1)). 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 Cash Management compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with cash management for reimbursement grants. The School Corporation did not have a design control in place to ensure that service provider invoices were paid prior to the submitting reimbursements to the Indiana Department of Education (IDOE). 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. Questioned Costs: There were no questioned costs identified. Context: The School Corporation pays one hundred percent of its Special Education Cluster funding to one service provider, which totaled $3,782,381 for the audit period. For all invoices during the audit period, the School Corporation submitted and received reimbursement from the IDOE prior to paying the service provider, and then the School Corporation remitted payment to the service provider. There was significant delay in the time between the School Corporation was reimbursed by IDOE and when the School Corporation paid the service provider. The delay in payment was in the range of 2 – 4 months for the payments made during the audit period. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-003. Recommendation: We recommend the School Corporation implement procedures to ensure the invoices are paid before submitting draw requests and receiving funds from IDOE. 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 Cluster Assistance Listing Number: 84.027, 84.027X, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-122-PN01, 23611-122-PN01, 24611-122-PN01, 22611-122-ARP, 22619-122-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Cash Management Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." For grants and cooperative agreements to non-federal entities that are paid on a reimbursement basis, supporting documentation shows that the costs for which reimbursement was requested were paid prior to the date of the reimbursement request. Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the federal award to the recipient (2 CFR section 200.305(b)(1)). 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 Cash Management compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with cash management for reimbursement grants. The School Corporation did not have a design control in place to ensure that service provider invoices were paid prior to the submitting reimbursements to the Indiana Department of Education (IDOE). 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. Questioned Costs: There were no questioned costs identified. Context: The School Corporation pays one hundred percent of its Special Education Cluster funding to one service provider, which totaled $3,782,381 for the audit period. For all invoices during the audit period, the School Corporation submitted and received reimbursement from the IDOE prior to paying the service provider, and then the School Corporation remitted payment to the service provider. There was significant delay in the time between the School Corporation was reimbursed by IDOE and when the School Corporation paid the service provider. The delay in payment was in the range of 2 – 4 months for the payments made during the audit period. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-003. Recommendation: We recommend the School Corporation implement procedures to ensure the invoices are paid before submitting draw requests and receiving funds from IDOE. 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 Cluster Assistance Listing Number: 84.027, 84.027X, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-122-PN01, 23611-122-PN01, 24611-122-PN01, 22611-122-ARP, 22619-122-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Cash Management Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." For grants and cooperative agreements to non-federal entities that are paid on a reimbursement basis, supporting documentation shows that the costs for which reimbursement was requested were paid prior to the date of the reimbursement request. Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the federal award to the recipient (2 CFR section 200.305(b)(1)). 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 Cash Management compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with cash management for reimbursement grants. The School Corporation did not have a design control in place to ensure that service provider invoices were paid prior to the submitting reimbursements to the Indiana Department of Education (IDOE). 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. Questioned Costs: There were no questioned costs identified. Context: The School Corporation pays one hundred percent of its Special Education Cluster funding to one service provider, which totaled $3,782,381 for the audit period. For all invoices during the audit period, the School Corporation submitted and received reimbursement from the IDOE prior to paying the service provider, and then the School Corporation remitted payment to the service provider. There was significant delay in the time between the School Corporation was reimbursed by IDOE and when the School Corporation paid the service provider. The delay in payment was in the range of 2 – 4 months for the payments made during the audit period. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-003. Recommendation: We recommend the School Corporation implement procedures to ensure the invoices are paid before submitting draw requests and receiving funds from IDOE. 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 Cluster Assistance Listing Number: 84.027X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-122-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Period of Performance 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 200.309 states: "A non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance (except as described in § 200.461 Publication and printing costs) and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. 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 period of performance compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the period of performance requirement. The School Corporation did not have a design control in place to ensure that service provider invoices were paid before the required liquidation date. 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. Questioned Costs: There were no questioned costs identified. Context: The School Corporation pays one hundred percent of its Special Education Cluster funding to one service provider. From review of the expense population, we noted 2 payments to the service provider where the service provider was not paid until after liquidation date of December 29, 2023. The School Corporation did not pay the service provider until April 30, 2024 for $258,488 for the services provided. Identification as a repeat finding: No. Recommendation: We recommend the School Corporation implement procedures to ensure the invoices are paid before the required liquidation date. 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 Cluster Assistance Listing Number: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-122-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Level of Effort - Maintenance of Effort 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 Level of Effort - Maintenance of Effort compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirement 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 one workbook covering FY21 and FY22 to the Indiana Department of Education (IDOE) during the audit period to meet federal the Level of Effort - Maintenance of Effort requirements. We noted the amounts reported covering the FY21 time period ($865,515) did not agree to the underlying expenditure records ($1,474,349 for the period of July 1, 2020 through June 30, 2021). Additionally, we noted the amounts reported covering the FY22 time period ($937,948) did not agree to the underlying expenditure records ($2,695,619, for the period of July 1, 2021 through June 30, 2022). 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 II and ESSER III amounts reported for the reports covering the FY22 time period ($0 and $0, respectively) did not agree to the underlying expenditure records ($79,112 and $99,245 respectively, for the period of July 1, 2021 through June 30, 2022). Additionally, we noted that the ESSER II, and ESSER III amounts reported for the reports covering the FY23 time period ($178,829 and $874,154, respectively) did not agree to the underlying expenditure records ($159,450 and $789,489), respectively, for the period of July 1, 2022 through June 30, 2023). We also noted there was no documented, secondary review of the information in the annual data reports by someone other than the preparer. Identification as a repeat finding: 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 II and ESSER III amounts reported for the reports covering the FY22 time period ($0 and $0, respectively) did not agree to the underlying expenditure records ($79,112 and $99,245 respectively, for the period of July 1, 2021 through June 30, 2022). Additionally, we noted that the ESSER II, and ESSER III amounts reported for the reports covering the FY23 time period ($178,829 and $874,154, respectively) did not agree to the underlying expenditure records ($159,450 and $789,489), respectively, for the period of July 1, 2022 through June 30, 2023). We also noted there was no documented, secondary review of the information in the annual data reports by someone other than the preparer. Identification as a repeat finding: 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 – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Material Noncompliance, Qualified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics… (3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). 2 CFR 200 Appendix II states in part: In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week.. . .” Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to design and implement an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: For the one project sampled for Davis-Bacon requirements, the School Corporation did not obtain the weekly payroll reports certifications from the company that performed renovations on the School Corporation. Therefore, no review was performed to ensure that pay rates complied with the federal wage rate requirements. Additionally, the School Corporation did not have a contract with the company that included the clause for the federal wage rate requirements. The total amount disbursed and reported on the SEFA during the audit period is $467,094 and the labor portion was not determinable by the School Corporation. Identification as a repeat finding: No. Recommendation: We recommend the School Corporation implement a formal process to ensure the required weekly payroll reports certifications are collected and reviewed to ensure compliance with the wage rate requirements. Additionally, We recommend the School Corporation implement a formal process to ensure the contracts including labor costs over $2,000 funded by federal awards have Davis Bacon wage rate requirement clause in written contract. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.