2024-003: Significant Deficiency in Internal Controls over Compliance and Compliance – Setup and Monitoring of Reporting and Match Agency: U.S. Department of Transportation, Federal Aviation Administration Program(s) and Federal Award Listing Number(s): Airport Improvement Program ALN: 20.106 FAIN: 3-02-0133-092-2022, 3-02-0133-098-2023, 3-02-0133-100-2023 New or Repeat: New Criteria: 2 CFR 200.303 requires internal controls to ensure accuracy in financial reporting, while 2 CFR 200.306 mandates proper tracking and documentation of matching contributions. Condition: Internal controls were not sufficiently designed and implemented to ensure that matching funds were correctly allocated in accordance with grant requirements. As a result, errors in the match setup were not detected in a timely manner, leading to discrepancies between the financial data provided for audit and the City and Borough’s prepared reports submitted to the grantor. Internal controls over reporting were not designed or implemented to detect and correct the errors prior to report submission. Context: The City and Borough’s financial system was not properly configured to allocate matching funds correctly, resulting in discrepancies in reported amounts. Specifically, an under-allocation to an Airport Improvement Program (AIP) grant and an over-allocation to the match occurred in one project of $474,704 and an under-allocation to match and over-allocation of $107,651 to two other AIP grants occurred. Effect: Overall expenses were under-allocated to the AIP and over-allocated to match funding. The overall impact of these errors resulted in discrepancies between reported amounts and supporting documentation. Due to amount reported as AIP costs being under-reported, this is considered immaterial non-compliance and is reported as an other matter. Questioned costs: No questioned costs as overall program impact was the under-allocation of expenses to the grants as of June 30, 2024. The City and Borough elected not to adjust the amounts reported in the schedule of expenditures of federal awards, since allocations and reports can be corrected in the following reporting year. Cause: Internal controls were not designed or implemented to detect the incorrect system configuration for allocating project expenses between grant and match funds in a timely manner, nor was the report preparation review process sufficiently designed or implemented to detect and correct the under-and over-allocations of project costs being reported. Recommendation: We recommend the City and Borough improve monitoring controls over the setup for project expense allocations and the review controls over report preparation process to ensure that errors are detected and corrected in a timely manner. View of responsible officials: Management concurs with this finding, see corrective action plan.
2024-003: Significant Deficiency in Internal Controls over Compliance and Compliance – Setup and Monitoring of Reporting and Match Agency: U.S. Department of Transportation, Federal Aviation Administration Program(s) and Federal Award Listing Number(s): Airport Improvement Program ALN: 20.106 FAIN: 3-02-0133-092-2022, 3-02-0133-098-2023, 3-02-0133-100-2023 New or Repeat: New Criteria: 2 CFR 200.303 requires internal controls to ensure accuracy in financial reporting, while 2 CFR 200.306 mandates proper tracking and documentation of matching contributions. Condition: Internal controls were not sufficiently designed and implemented to ensure that matching funds were correctly allocated in accordance with grant requirements. As a result, errors in the match setup were not detected in a timely manner, leading to discrepancies between the financial data provided for audit and the City and Borough’s prepared reports submitted to the grantor. Internal controls over reporting were not designed or implemented to detect and correct the errors prior to report submission. Context: The City and Borough’s financial system was not properly configured to allocate matching funds correctly, resulting in discrepancies in reported amounts. Specifically, an under-allocation to an Airport Improvement Program (AIP) grant and an over-allocation to the match occurred in one project of $474,704 and an under-allocation to match and over-allocation of $107,651 to two other AIP grants occurred. Effect: Overall expenses were under-allocated to the AIP and over-allocated to match funding. The overall impact of these errors resulted in discrepancies between reported amounts and supporting documentation. Due to amount reported as AIP costs being under-reported, this is considered immaterial non-compliance and is reported as an other matter. Questioned costs: No questioned costs as overall program impact was the under-allocation of expenses to the grants as of June 30, 2024. The City and Borough elected not to adjust the amounts reported in the schedule of expenditures of federal awards, since allocations and reports can be corrected in the following reporting year. Cause: Internal controls were not designed or implemented to detect the incorrect system configuration for allocating project expenses between grant and match funds in a timely manner, nor was the report preparation review process sufficiently designed or implemented to detect and correct the under-and over-allocations of project costs being reported. Recommendation: We recommend the City and Borough improve monitoring controls over the setup for project expense allocations and the review controls over report preparation process to ensure that errors are detected and corrected in a timely manner. View of responsible officials: Management concurs with this finding, see corrective action plan.
2024-003: Significant Deficiency in Internal Controls over Compliance and Compliance – Setup and Monitoring of Reporting and Match Agency: U.S. Department of Transportation, Federal Aviation Administration Program(s) and Federal Award Listing Number(s): Airport Improvement Program ALN: 20.106 FAIN: 3-02-0133-092-2022, 3-02-0133-098-2023, 3-02-0133-100-2023 New or Repeat: New Criteria: 2 CFR 200.303 requires internal controls to ensure accuracy in financial reporting, while 2 CFR 200.306 mandates proper tracking and documentation of matching contributions. Condition: Internal controls were not sufficiently designed and implemented to ensure that matching funds were correctly allocated in accordance with grant requirements. As a result, errors in the match setup were not detected in a timely manner, leading to discrepancies between the financial data provided for audit and the City and Borough’s prepared reports submitted to the grantor. Internal controls over reporting were not designed or implemented to detect and correct the errors prior to report submission. Context: The City and Borough’s financial system was not properly configured to allocate matching funds correctly, resulting in discrepancies in reported amounts. Specifically, an under-allocation to an Airport Improvement Program (AIP) grant and an over-allocation to the match occurred in one project of $474,704 and an under-allocation to match and over-allocation of $107,651 to two other AIP grants occurred. Effect: Overall expenses were under-allocated to the AIP and over-allocated to match funding. The overall impact of these errors resulted in discrepancies between reported amounts and supporting documentation. Due to amount reported as AIP costs being under-reported, this is considered immaterial non-compliance and is reported as an other matter. Questioned costs: No questioned costs as overall program impact was the under-allocation of expenses to the grants as of June 30, 2024. The City and Borough elected not to adjust the amounts reported in the schedule of expenditures of federal awards, since allocations and reports can be corrected in the following reporting year. Cause: Internal controls were not designed or implemented to detect the incorrect system configuration for allocating project expenses between grant and match funds in a timely manner, nor was the report preparation review process sufficiently designed or implemented to detect and correct the under-and over-allocations of project costs being reported. Recommendation: We recommend the City and Borough improve monitoring controls over the setup for project expense allocations and the review controls over report preparation process to ensure that errors are detected and corrected in a timely manner. View of responsible officials: Management concurs with this finding, see corrective action plan.
2024-003: Significant Deficiency in Internal Controls over Compliance and Compliance – Setup and Monitoring of Reporting and Match Agency: U.S. Department of Transportation, Federal Aviation Administration Program(s) and Federal Award Listing Number(s): Airport Improvement Program ALN: 20.106 FAIN: 3-02-0133-092-2022, 3-02-0133-098-2023, 3-02-0133-100-2023 New or Repeat: New Criteria: 2 CFR 200.303 requires internal controls to ensure accuracy in financial reporting, while 2 CFR 200.306 mandates proper tracking and documentation of matching contributions. Condition: Internal controls were not sufficiently designed and implemented to ensure that matching funds were correctly allocated in accordance with grant requirements. As a result, errors in the match setup were not detected in a timely manner, leading to discrepancies between the financial data provided for audit and the City and Borough’s prepared reports submitted to the grantor. Internal controls over reporting were not designed or implemented to detect and correct the errors prior to report submission. Context: The City and Borough’s financial system was not properly configured to allocate matching funds correctly, resulting in discrepancies in reported amounts. Specifically, an under-allocation to an Airport Improvement Program (AIP) grant and an over-allocation to the match occurred in one project of $474,704 and an under-allocation to match and over-allocation of $107,651 to two other AIP grants occurred. Effect: Overall expenses were under-allocated to the AIP and over-allocated to match funding. The overall impact of these errors resulted in discrepancies between reported amounts and supporting documentation. Due to amount reported as AIP costs being under-reported, this is considered immaterial non-compliance and is reported as an other matter. Questioned costs: No questioned costs as overall program impact was the under-allocation of expenses to the grants as of June 30, 2024. The City and Borough elected not to adjust the amounts reported in the schedule of expenditures of federal awards, since allocations and reports can be corrected in the following reporting year. Cause: Internal controls were not designed or implemented to detect the incorrect system configuration for allocating project expenses between grant and match funds in a timely manner, nor was the report preparation review process sufficiently designed or implemented to detect and correct the under-and over-allocations of project costs being reported. Recommendation: We recommend the City and Borough improve monitoring controls over the setup for project expense allocations and the review controls over report preparation process to ensure that errors are detected and corrected in a timely manner. View of responsible officials: Management concurs with this finding, see corrective action plan.
2024-003: Significant Deficiency in Internal Controls over Compliance and Compliance – Setup and Monitoring of Reporting and Match Agency: U.S. Department of Transportation, Federal Aviation Administration Program(s) and Federal Award Listing Number(s): Airport Improvement Program ALN: 20.106 FAIN: 3-02-0133-092-2022, 3-02-0133-098-2023, 3-02-0133-100-2023 New or Repeat: New Criteria: 2 CFR 200.303 requires internal controls to ensure accuracy in financial reporting, while 2 CFR 200.306 mandates proper tracking and documentation of matching contributions. Condition: Internal controls were not sufficiently designed and implemented to ensure that matching funds were correctly allocated in accordance with grant requirements. As a result, errors in the match setup were not detected in a timely manner, leading to discrepancies between the financial data provided for audit and the City and Borough’s prepared reports submitted to the grantor. Internal controls over reporting were not designed or implemented to detect and correct the errors prior to report submission. Context: The City and Borough’s financial system was not properly configured to allocate matching funds correctly, resulting in discrepancies in reported amounts. Specifically, an under-allocation to an Airport Improvement Program (AIP) grant and an over-allocation to the match occurred in one project of $474,704 and an under-allocation to match and over-allocation of $107,651 to two other AIP grants occurred. Effect: Overall expenses were under-allocated to the AIP and over-allocated to match funding. The overall impact of these errors resulted in discrepancies between reported amounts and supporting documentation. Due to amount reported as AIP costs being under-reported, this is considered immaterial non-compliance and is reported as an other matter. Questioned costs: No questioned costs as overall program impact was the under-allocation of expenses to the grants as of June 30, 2024. The City and Borough elected not to adjust the amounts reported in the schedule of expenditures of federal awards, since allocations and reports can be corrected in the following reporting year. Cause: Internal controls were not designed or implemented to detect the incorrect system configuration for allocating project expenses between grant and match funds in a timely manner, nor was the report preparation review process sufficiently designed or implemented to detect and correct the under-and over-allocations of project costs being reported. Recommendation: We recommend the City and Borough improve monitoring controls over the setup for project expense allocations and the review controls over report preparation process to ensure that errors are detected and corrected in a timely manner. View of responsible officials: Management concurs with this finding, see corrective action plan.
FINDING 2024-002 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: COVID-19 - Special Education Grants to States, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027X, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-087-ARP, 22619-087-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. 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. Small purchase procedures require that price or rate quotations must be obtained from an adequate number of qualified sources or documented reasoning to support a single source provider. During the audit period, the School Corporation had six vendors, totaling $165,726, that were determined to require small purchase procedures. Two vendors were selected for testing. For the two vendors tested, the School Corporation procured $82,669 in services and could not provide evidence of open competition or quotes for the purchases. INDIANA STATE BOARD OF ACCOUNTS 15 WARRICK COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Additionally, the School Corporation had not established a purchasing policy that would reflect applicable state laws and regulations, including procedures to avoid the acquisition of unnecessary or duplicative items; procedures to ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured; procedures ensure that all solicitations identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals; and did not maintain written standards of conduct covering conflicts of interest and governing actions of its employees engaged in the selection, award, and administration of contracts. 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 person, or adding a clause or condition to the covered transaction with that vendor. Three covered transactions for goods or services that exceeded $25,000 paid from the Special Education funds during the audit period were identified. The School Corporation did not verify the vendor's suspension and debarment status prior to payment for any of the three vendors. Amounts paid to the vendors totaled $131,637. 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 states in part: "(a) 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. . . . (i) 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 STATE BOARD OF ACCOUNTS 16 WARRICK COUNTY SCHOOL CORPORATION 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 SAM 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 School Corporation did not have the proper safeguards in place to ensure that the documentation was properly maintained. As a result, the School Corporation was unable to provide documentation to demonstrate it had properly procured services. In addition, the Treasurer and Assistant Superintendent of Schools assumed the vendor's suspension and debarment status was verified and quotes were being obtained or reasoning for a single source provider was being documented. There was not adequate oversight to ensure proper procurement procedures were being followed. Effect The School Corporation was not able to provide the documentation that they followed the proper procurement procedures or that they verified vendors were not suspended or debarred. By not following proper procurement procedures, the School Corporation may not be receiving the most competitive pricing. If the School Corporation does not verify that vendors are not suspended or debarred, the School Corporation may be purchasing from vendors that are not eligible to receive federal funds. INDIANA STATE BOARD OF ACCOUNTS 17 WARRICK COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Without a proper system of internal controls in place that operated effectively, material noncompliance remained undetected. 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 there are appropriate procurement procedures for goods and services and that contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Documentation of all procurement and suspension and debarment activities should be maintained. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: COVID-19 - Special Education Grants to States, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027X, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-087-ARP, 22619-087-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. 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. Small purchase procedures require that price or rate quotations must be obtained from an adequate number of qualified sources or documented reasoning to support a single source provider. During the audit period, the School Corporation had six vendors, totaling $165,726, that were determined to require small purchase procedures. Two vendors were selected for testing. For the two vendors tested, the School Corporation procured $82,669 in services and could not provide evidence of open competition or quotes for the purchases. INDIANA STATE BOARD OF ACCOUNTS 15 WARRICK COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Additionally, the School Corporation had not established a purchasing policy that would reflect applicable state laws and regulations, including procedures to avoid the acquisition of unnecessary or duplicative items; procedures to ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured; procedures ensure that all solicitations identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals; and did not maintain written standards of conduct covering conflicts of interest and governing actions of its employees engaged in the selection, award, and administration of contracts. 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 person, or adding a clause or condition to the covered transaction with that vendor. Three covered transactions for goods or services that exceeded $25,000 paid from the Special Education funds during the audit period were identified. The School Corporation did not verify the vendor's suspension and debarment status prior to payment for any of the three vendors. Amounts paid to the vendors totaled $131,637. 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 states in part: "(a) 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. . . . (i) 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 STATE BOARD OF ACCOUNTS 16 WARRICK COUNTY SCHOOL CORPORATION 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 SAM 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 School Corporation did not have the proper safeguards in place to ensure that the documentation was properly maintained. As a result, the School Corporation was unable to provide documentation to demonstrate it had properly procured services. In addition, the Treasurer and Assistant Superintendent of Schools assumed the vendor's suspension and debarment status was verified and quotes were being obtained or reasoning for a single source provider was being documented. There was not adequate oversight to ensure proper procurement procedures were being followed. Effect The School Corporation was not able to provide the documentation that they followed the proper procurement procedures or that they verified vendors were not suspended or debarred. By not following proper procurement procedures, the School Corporation may not be receiving the most competitive pricing. If the School Corporation does not verify that vendors are not suspended or debarred, the School Corporation may be purchasing from vendors that are not eligible to receive federal funds. INDIANA STATE BOARD OF ACCOUNTS 17 WARRICK COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Without a proper system of internal controls in place that operated effectively, material noncompliance remained undetected. 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 there are appropriate procurement procedures for goods and services and that contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Documentation of all procurement and suspension and debarment activities should be maintained. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: COVID-19 - Special Education Grants to States, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027X, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-087-ARP, 22619-087-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. 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. Small purchase procedures require that price or rate quotations must be obtained from an adequate number of qualified sources or documented reasoning to support a single source provider. During the audit period, the School Corporation had six vendors, totaling $165,726, that were determined to require small purchase procedures. Two vendors were selected for testing. For the two vendors tested, the School Corporation procured $82,669 in services and could not provide evidence of open competition or quotes for the purchases. INDIANA STATE BOARD OF ACCOUNTS 15 WARRICK COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Additionally, the School Corporation had not established a purchasing policy that would reflect applicable state laws and regulations, including procedures to avoid the acquisition of unnecessary or duplicative items; procedures to ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured; procedures ensure that all solicitations identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals; and did not maintain written standards of conduct covering conflicts of interest and governing actions of its employees engaged in the selection, award, and administration of contracts. 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 person, or adding a clause or condition to the covered transaction with that vendor. Three covered transactions for goods or services that exceeded $25,000 paid from the Special Education funds during the audit period were identified. The School Corporation did not verify the vendor's suspension and debarment status prior to payment for any of the three vendors. Amounts paid to the vendors totaled $131,637. 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 states in part: "(a) 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. . . . (i) 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 STATE BOARD OF ACCOUNTS 16 WARRICK COUNTY SCHOOL CORPORATION 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 SAM 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 School Corporation did not have the proper safeguards in place to ensure that the documentation was properly maintained. As a result, the School Corporation was unable to provide documentation to demonstrate it had properly procured services. In addition, the Treasurer and Assistant Superintendent of Schools assumed the vendor's suspension and debarment status was verified and quotes were being obtained or reasoning for a single source provider was being documented. There was not adequate oversight to ensure proper procurement procedures were being followed. Effect The School Corporation was not able to provide the documentation that they followed the proper procurement procedures or that they verified vendors were not suspended or debarred. By not following proper procurement procedures, the School Corporation may not be receiving the most competitive pricing. If the School Corporation does not verify that vendors are not suspended or debarred, the School Corporation may be purchasing from vendors that are not eligible to receive federal funds. INDIANA STATE BOARD OF ACCOUNTS 17 WARRICK COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Without a proper system of internal controls in place that operated effectively, material noncompliance remained undetected. 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 there are appropriate procurement procedures for goods and services and that contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Documentation of all procurement and suspension and debarment activities should be maintained. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: COVID-19 - Special Education Grants to States, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027X, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-087-ARP, 22619-087-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. 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. Small purchase procedures require that price or rate quotations must be obtained from an adequate number of qualified sources or documented reasoning to support a single source provider. During the audit period, the School Corporation had six vendors, totaling $165,726, that were determined to require small purchase procedures. Two vendors were selected for testing. For the two vendors tested, the School Corporation procured $82,669 in services and could not provide evidence of open competition or quotes for the purchases. INDIANA STATE BOARD OF ACCOUNTS 15 WARRICK COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Additionally, the School Corporation had not established a purchasing policy that would reflect applicable state laws and regulations, including procedures to avoid the acquisition of unnecessary or duplicative items; procedures to ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured; procedures ensure that all solicitations identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals; and did not maintain written standards of conduct covering conflicts of interest and governing actions of its employees engaged in the selection, award, and administration of contracts. 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 person, or adding a clause or condition to the covered transaction with that vendor. Three covered transactions for goods or services that exceeded $25,000 paid from the Special Education funds during the audit period were identified. The School Corporation did not verify the vendor's suspension and debarment status prior to payment for any of the three vendors. Amounts paid to the vendors totaled $131,637. 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 states in part: "(a) 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. . . . (i) 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 STATE BOARD OF ACCOUNTS 16 WARRICK COUNTY SCHOOL CORPORATION 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 SAM 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 School Corporation did not have the proper safeguards in place to ensure that the documentation was properly maintained. As a result, the School Corporation was unable to provide documentation to demonstrate it had properly procured services. In addition, the Treasurer and Assistant Superintendent of Schools assumed the vendor's suspension and debarment status was verified and quotes were being obtained or reasoning for a single source provider was being documented. There was not adequate oversight to ensure proper procurement procedures were being followed. Effect The School Corporation was not able to provide the documentation that they followed the proper procurement procedures or that they verified vendors were not suspended or debarred. By not following proper procurement procedures, the School Corporation may not be receiving the most competitive pricing. If the School Corporation does not verify that vendors are not suspended or debarred, the School Corporation may be purchasing from vendors that are not eligible to receive federal funds. INDIANA STATE BOARD OF ACCOUNTS 17 WARRICK COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Without a proper system of internal controls in place that operated effectively, material noncompliance remained undetected. 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 there are appropriate procurement procedures for goods and services and that contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Documentation of all procurement and suspension and debarment activities should be maintained. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2024-002 Policies Regarding Internal Controls Over Federal Awards (Significant Deficiency in Internal Controls over Compliance and Noncompliance —All Awards) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, £200.303(a) The recipient and subrecipient of federal awards must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: The Agency historically updated their documentation of internal controls in conjunction with the annual audit. However, the Agency was unable to provide internally produced written policies regarding the internal controls over state and federal awards. Cause: A misunderstanding of the requirements to maintain written policies over federal awards. Effect: The Agency is not in compliance with requirements for recipients and subrecipients of federal awards per 2 CFR 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, £200.303. Accounting department staff lack clearly documented guidance for implementing internal controls over federal awards. Questioned Costs: None Recommendations: Management should familiarize themselves with the requirements of 2 CFR 200 regarding the specific written policies required to be maintained for recipients and subrecipients of federal awards. Management should develop and maintain internally produced written policies regarding the internal controls over federal awards as described in 2 CFR 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, £200.303. Written policies over internal controls over federal awards developed by management should be approved by the Board of Directors or designated committee. Written policies should be made available to accounting department staff involved in the accounting procedures related to federal award expenditures. Views of Responsible Officials and Planned Corrective Actions: Management is committed to compliance in accordance with all grant agreements and will work to formally document the Agency’s internal controls over Federal and State awards. Additional training will be provided as needed to prevent future findings.
2024-002 Policies Regarding Internal Controls Over Federal Awards (Significant Deficiency in Internal Controls over Compliance and Noncompliance —All Awards) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, £200.303(a) The recipient and subrecipient of federal awards must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: The Agency historically updated their documentation of internal controls in conjunction with the annual audit. However, the Agency was unable to provide internally produced written policies regarding the internal controls over state and federal awards. Cause: A misunderstanding of the requirements to maintain written policies over federal awards. Effect: The Agency is not in compliance with requirements for recipients and subrecipients of federal awards per 2 CFR 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, £200.303. Accounting department staff lack clearly documented guidance for implementing internal controls over federal awards. Questioned Costs: None Recommendations: Management should familiarize themselves with the requirements of 2 CFR 200 regarding the specific written policies required to be maintained for recipients and subrecipients of federal awards. Management should develop and maintain internally produced written policies regarding the internal controls over federal awards as described in 2 CFR 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, £200.303. Written policies over internal controls over federal awards developed by management should be approved by the Board of Directors or designated committee. Written policies should be made available to accounting department staff involved in the accounting procedures related to federal award expenditures. Views of Responsible Officials and Planned Corrective Actions: Management is committed to compliance in accordance with all grant agreements and will work to formally document the Agency’s internal controls over Federal and State awards. Additional training will be provided as needed to prevent future findings.
2024-002 Policies Regarding Internal Controls Over Federal Awards (Significant Deficiency in Internal Controls over Compliance and Noncompliance —All Awards) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, £200.303(a) The recipient and subrecipient of federal awards must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: The Agency historically updated their documentation of internal controls in conjunction with the annual audit. However, the Agency was unable to provide internally produced written policies regarding the internal controls over state and federal awards. Cause: A misunderstanding of the requirements to maintain written policies over federal awards. Effect: The Agency is not in compliance with requirements for recipients and subrecipients of federal awards per 2 CFR 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, £200.303. Accounting department staff lack clearly documented guidance for implementing internal controls over federal awards. Questioned Costs: None Recommendations: Management should familiarize themselves with the requirements of 2 CFR 200 regarding the specific written policies required to be maintained for recipients and subrecipients of federal awards. Management should develop and maintain internally produced written policies regarding the internal controls over federal awards as described in 2 CFR 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, £200.303. Written policies over internal controls over federal awards developed by management should be approved by the Board of Directors or designated committee. Written policies should be made available to accounting department staff involved in the accounting procedures related to federal award expenditures. Views of Responsible Officials and Planned Corrective Actions: Management is committed to compliance in accordance with all grant agreements and will work to formally document the Agency’s internal controls over Federal and State awards. Additional training will be provided as needed to prevent future findings.
2024-002 Policies Regarding Internal Controls Over Federal Awards (Significant Deficiency in Internal Controls over Compliance and Noncompliance —All Awards) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, £200.303(a) The recipient and subrecipient of federal awards must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: The Agency historically updated their documentation of internal controls in conjunction with the annual audit. However, the Agency was unable to provide internally produced written policies regarding the internal controls over state and federal awards. Cause: A misunderstanding of the requirements to maintain written policies over federal awards. Effect: The Agency is not in compliance with requirements for recipients and subrecipients of federal awards per 2 CFR 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, £200.303. Accounting department staff lack clearly documented guidance for implementing internal controls over federal awards. Questioned Costs: None Recommendations: Management should familiarize themselves with the requirements of 2 CFR 200 regarding the specific written policies required to be maintained for recipients and subrecipients of federal awards. Management should develop and maintain internally produced written policies regarding the internal controls over federal awards as described in 2 CFR 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, £200.303. Written policies over internal controls over federal awards developed by management should be approved by the Board of Directors or designated committee. Written policies should be made available to accounting department staff involved in the accounting procedures related to federal award expenditures. Views of Responsible Officials and Planned Corrective Actions: Management is committed to compliance in accordance with all grant agreements and will work to formally document the Agency’s internal controls over Federal and State awards. Additional training will be provided as needed to prevent future findings.
2024-002 Policies Regarding Internal Controls Over Federal Awards (Significant Deficiency in Internal Controls over Compliance and Noncompliance —All Awards) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, £200.303(a) The recipient and subrecipient of federal awards must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: The Agency historically updated their documentation of internal controls in conjunction with the annual audit. However, the Agency was unable to provide internally produced written policies regarding the internal controls over state and federal awards. Cause: A misunderstanding of the requirements to maintain written policies over federal awards. Effect: The Agency is not in compliance with requirements for recipients and subrecipients of federal awards per 2 CFR 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, £200.303. Accounting department staff lack clearly documented guidance for implementing internal controls over federal awards. Questioned Costs: None Recommendations: Management should familiarize themselves with the requirements of 2 CFR 200 regarding the specific written policies required to be maintained for recipients and subrecipients of federal awards. Management should develop and maintain internally produced written policies regarding the internal controls over federal awards as described in 2 CFR 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, £200.303. Written policies over internal controls over federal awards developed by management should be approved by the Board of Directors or designated committee. Written policies should be made available to accounting department staff involved in the accounting procedures related to federal award expenditures. Views of Responsible Officials and Planned Corrective Actions: Management is committed to compliance in accordance with all grant agreements and will work to formally document the Agency’s internal controls over Federal and State awards. Additional training will be provided as needed to prevent future findings.
2024-001 – Suspension and Debarment Material Weakness Federal Program: Research and Development Cluster Assistance Listing Number(s): 16.817 – Byrne Criminal Justice Innovation Program 16.525 – Grants to Reduce Domestic Violence, Dating Violence, Sexual Assault and Stalking on Campus 47.084 – NSFT Technology, Innovation, and Partnerships 47.074 – Biological Sciences 47.076 – Education and Human resources 47.070 – Computer and Information Science and Engineering 11.417 – Sea Grant Support Criteria: The Federal Government requires that when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. In addition, per the Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The University was not able to provide an audit trail to support the verification that a vendor was not suspended and debarred before entering into a contract. Cause: The University does not have a control and/or process in place to ensure that the audit trail surrounding suspension and debarment verification is maintained. Effect or Potential Effect: There is a possibility of the University entering into a contract with a vendor or subrecipient that is suspended or debarred. Questioned Costs: None. Context: Due to the University not having an audit trail for their internal controls around suspension and debarment verification, RSM evaluated the suspension and debarment compliance requirement as having a high level of control risk. Repeat Finding: No. Recommendation: We recommend the University evaluate its procedures and implement additional control to ensure an audit trail is maintained surrounding the verification that vendors are not suspended and debarred. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
2024-001 – Suspension and Debarment Material Weakness Federal Program: Research and Development Cluster Assistance Listing Number(s): 16.817 – Byrne Criminal Justice Innovation Program 16.525 – Grants to Reduce Domestic Violence, Dating Violence, Sexual Assault and Stalking on Campus 47.084 – NSFT Technology, Innovation, and Partnerships 47.074 – Biological Sciences 47.076 – Education and Human resources 47.070 – Computer and Information Science and Engineering 11.417 – Sea Grant Support Criteria: The Federal Government requires that when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. In addition, per the Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The University was not able to provide an audit trail to support the verification that a vendor was not suspended and debarred before entering into a contract. Cause: The University does not have a control and/or process in place to ensure that the audit trail surrounding suspension and debarment verification is maintained. Effect or Potential Effect: There is a possibility of the University entering into a contract with a vendor or subrecipient that is suspended or debarred. Questioned Costs: None. Context: Due to the University not having an audit trail for their internal controls around suspension and debarment verification, RSM evaluated the suspension and debarment compliance requirement as having a high level of control risk. Repeat Finding: No. Recommendation: We recommend the University evaluate its procedures and implement additional control to ensure an audit trail is maintained surrounding the verification that vendors are not suspended and debarred. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
2024-001 – Suspension and Debarment Material Weakness Federal Program: Research and Development Cluster Assistance Listing Number(s): 16.817 – Byrne Criminal Justice Innovation Program 16.525 – Grants to Reduce Domestic Violence, Dating Violence, Sexual Assault and Stalking on Campus 47.084 – NSFT Technology, Innovation, and Partnerships 47.074 – Biological Sciences 47.076 – Education and Human resources 47.070 – Computer and Information Science and Engineering 11.417 – Sea Grant Support Criteria: The Federal Government requires that when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. In addition, per the Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The University was not able to provide an audit trail to support the verification that a vendor was not suspended and debarred before entering into a contract. Cause: The University does not have a control and/or process in place to ensure that the audit trail surrounding suspension and debarment verification is maintained. Effect or Potential Effect: There is a possibility of the University entering into a contract with a vendor or subrecipient that is suspended or debarred. Questioned Costs: None. Context: Due to the University not having an audit trail for their internal controls around suspension and debarment verification, RSM evaluated the suspension and debarment compliance requirement as having a high level of control risk. Repeat Finding: No. Recommendation: We recommend the University evaluate its procedures and implement additional control to ensure an audit trail is maintained surrounding the verification that vendors are not suspended and debarred. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
2024-001 – Suspension and Debarment Material Weakness Federal Program: Research and Development Cluster Assistance Listing Number(s): 16.817 – Byrne Criminal Justice Innovation Program 16.525 – Grants to Reduce Domestic Violence, Dating Violence, Sexual Assault and Stalking on Campus 47.084 – NSFT Technology, Innovation, and Partnerships 47.074 – Biological Sciences 47.076 – Education and Human resources 47.070 – Computer and Information Science and Engineering 11.417 – Sea Grant Support Criteria: The Federal Government requires that when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. In addition, per the Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The University was not able to provide an audit trail to support the verification that a vendor was not suspended and debarred before entering into a contract. Cause: The University does not have a control and/or process in place to ensure that the audit trail surrounding suspension and debarment verification is maintained. Effect or Potential Effect: There is a possibility of the University entering into a contract with a vendor or subrecipient that is suspended or debarred. Questioned Costs: None. Context: Due to the University not having an audit trail for their internal controls around suspension and debarment verification, RSM evaluated the suspension and debarment compliance requirement as having a high level of control risk. Repeat Finding: No. Recommendation: We recommend the University evaluate its procedures and implement additional control to ensure an audit trail is maintained surrounding the verification that vendors are not suspended and debarred. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
2024-001 – Suspension and Debarment Material Weakness Federal Program: Research and Development Cluster Assistance Listing Number(s): 16.817 – Byrne Criminal Justice Innovation Program 16.525 – Grants to Reduce Domestic Violence, Dating Violence, Sexual Assault and Stalking on Campus 47.084 – NSFT Technology, Innovation, and Partnerships 47.074 – Biological Sciences 47.076 – Education and Human resources 47.070 – Computer and Information Science and Engineering 11.417 – Sea Grant Support Criteria: The Federal Government requires that when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. In addition, per the Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The University was not able to provide an audit trail to support the verification that a vendor was not suspended and debarred before entering into a contract. Cause: The University does not have a control and/or process in place to ensure that the audit trail surrounding suspension and debarment verification is maintained. Effect or Potential Effect: There is a possibility of the University entering into a contract with a vendor or subrecipient that is suspended or debarred. Questioned Costs: None. Context: Due to the University not having an audit trail for their internal controls around suspension and debarment verification, RSM evaluated the suspension and debarment compliance requirement as having a high level of control risk. Repeat Finding: No. Recommendation: We recommend the University evaluate its procedures and implement additional control to ensure an audit trail is maintained surrounding the verification that vendors are not suspended and debarred. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
2024-001 – Suspension and Debarment Material Weakness Federal Program: Research and Development Cluster Assistance Listing Number(s): 16.817 – Byrne Criminal Justice Innovation Program 16.525 – Grants to Reduce Domestic Violence, Dating Violence, Sexual Assault and Stalking on Campus 47.084 – NSFT Technology, Innovation, and Partnerships 47.074 – Biological Sciences 47.076 – Education and Human resources 47.070 – Computer and Information Science and Engineering 11.417 – Sea Grant Support Criteria: The Federal Government requires that when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. In addition, per the Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The University was not able to provide an audit trail to support the verification that a vendor was not suspended and debarred before entering into a contract. Cause: The University does not have a control and/or process in place to ensure that the audit trail surrounding suspension and debarment verification is maintained. Effect or Potential Effect: There is a possibility of the University entering into a contract with a vendor or subrecipient that is suspended or debarred. Questioned Costs: None. Context: Due to the University not having an audit trail for their internal controls around suspension and debarment verification, RSM evaluated the suspension and debarment compliance requirement as having a high level of control risk. Repeat Finding: No. Recommendation: We recommend the University evaluate its procedures and implement additional control to ensure an audit trail is maintained surrounding the verification that vendors are not suspended and debarred. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
2024-001 – Suspension and Debarment Material Weakness Federal Program: Research and Development Cluster Assistance Listing Number(s): 16.817 – Byrne Criminal Justice Innovation Program 16.525 – Grants to Reduce Domestic Violence, Dating Violence, Sexual Assault and Stalking on Campus 47.084 – NSFT Technology, Innovation, and Partnerships 47.074 – Biological Sciences 47.076 – Education and Human resources 47.070 – Computer and Information Science and Engineering 11.417 – Sea Grant Support Criteria: The Federal Government requires that when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. In addition, per the Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The University was not able to provide an audit trail to support the verification that a vendor was not suspended and debarred before entering into a contract. Cause: The University does not have a control and/or process in place to ensure that the audit trail surrounding suspension and debarment verification is maintained. Effect or Potential Effect: There is a possibility of the University entering into a contract with a vendor or subrecipient that is suspended or debarred. Questioned Costs: None. Context: Due to the University not having an audit trail for their internal controls around suspension and debarment verification, RSM evaluated the suspension and debarment compliance requirement as having a high level of control risk. Repeat Finding: No. Recommendation: We recommend the University evaluate its procedures and implement additional control to ensure an audit trail is maintained surrounding the verification that vendors are not suspended and debarred. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
2024-001 – Suspension and Debarment Material Weakness Federal Program: Research and Development Cluster Assistance Listing Number(s): 16.817 – Byrne Criminal Justice Innovation Program 16.525 – Grants to Reduce Domestic Violence, Dating Violence, Sexual Assault and Stalking on Campus 47.084 – NSFT Technology, Innovation, and Partnerships 47.074 – Biological Sciences 47.076 – Education and Human resources 47.070 – Computer and Information Science and Engineering 11.417 – Sea Grant Support Criteria: The Federal Government requires that when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. In addition, per the Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The University was not able to provide an audit trail to support the verification that a vendor was not suspended and debarred before entering into a contract. Cause: The University does not have a control and/or process in place to ensure that the audit trail surrounding suspension and debarment verification is maintained. Effect or Potential Effect: There is a possibility of the University entering into a contract with a vendor or subrecipient that is suspended or debarred. Questioned Costs: None. Context: Due to the University not having an audit trail for their internal controls around suspension and debarment verification, RSM evaluated the suspension and debarment compliance requirement as having a high level of control risk. Repeat Finding: No. Recommendation: We recommend the University evaluate its procedures and implement additional control to ensure an audit trail is maintained surrounding the verification that vendors are not suspended and debarred. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
FINDING 2024-004 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 four Annual Data Reports to the Indiana Department of Education (IDOE) each year during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the CrossAct amount reported on the Year 3 report (118 employees) did not agree to the underlying employee records (94 employees). Additionally, we noted that the CrossAct amount reported on the Year 4 report (104 employees) did not agree to the underlying employee records (112 employees). Additionally, for all reports the School Corporation was required to submit during the audit period, auditable evidence of review and approval of these reports was not provided. Identification as a repeat finding: This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-004 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 four Annual Data Reports to the Indiana Department of Education (IDOE) each year during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the CrossAct amount reported on the Year 3 report (118 employees) did not agree to the underlying employee records (94 employees). Additionally, we noted that the CrossAct amount reported on the Year 4 report (104 employees) did not agree to the underlying employee records (112 employees). Additionally, for all reports the School Corporation was required to submit during the audit period, auditable evidence of review and approval of these reports was not provided. Identification as a repeat finding: This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-005 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 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… 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 w ages 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 1 of 2 sample items tested, we noted the School Corporation expended approximately $152,000 on a new gym floor, which was funded with ESSER III (84.425U) grant awards. The School Corporation did not properly include Davis-Bacon wage rate requirements in the vendor contract. Additionally, the School Corporation did not obtain the weekly payroll reports certifications from the construction vendor to monitor compliance with Davis-Bacon wage rate requirements. Therefore, no review was performed to ensure that pay rates complied with the federal wage rate requirements. Identification as a repeat finding: This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-004. Recommendation: We recommend the School Corporation ensure vendor contracts with labor installation in excess of $2,000 which are funded by federal grants including Davis Bacon Wage Rate Requirement clauses and implement a formal process to ensure the required weekly payroll reports certifications are collected and reviewed to ensure compliance with federal regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Significant Deficiency 2024-001. Procurement United States Department of Education, passed through New York State Department of Education Education Stabilization Fund COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief – Homeless Youth and Children ALN: 84.425W Criteria: 2 CFR §200.303 of the Uniform Guidance requires non-federal entities receiving federal awards to establish and maintain 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. Under the Uniform Guidance, federal awards recipients must maintain written documentation of internal control policies and procedures, such as procurement policies that adhere to state and local law, as well as federal regulations and statutes; procedures for documenting how costs are to be allocated to federal awards, documenting actual time and effort for payroll costs charged to federal awards; cash management procedures to minimize the time elapsed between the receipts and disbursements of federal funds; and, how to safeguard personally identifiable information. Condition: The District has not updated its existing policies and written procedures to conform to Uniform Guidance requirements. Cause: Staffing constraints have limited the District’s ability to perform a timely review of its existing policies and written procedures. Effect: Having insufficient or non-compliant written policies and procedures weaken internal controls over the federal awards received, increasing the risk of noncompliance with federal statutes and regulations. Questioned Costs: None reported. Identification of a Repeat Finding: This is a repeat finding from the previous audit referenced 2023-001. Recommendation: The District must review its existing written policies and procedures and update them as needed in order to comply with requirements of Uniform Guidance. Views of Responsible Officials of Auditee: The District’s Assistant Superintendent for Business will work on updating all policies and procedures relating to U.S. Office of Management and Budget Uniform Guidance to ensure policies are in compliance with these guidelines.
Significant Deficiency 2024-001. Procurement United States Department of Education, passed through New York State Department of Education Education Stabilization Fund COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief – Homeless Youth and Children ALN: 84.425W Criteria: 2 CFR §200.303 of the Uniform Guidance requires non-federal entities receiving federal awards to establish and maintain 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. Under the Uniform Guidance, federal awards recipients must maintain written documentation of internal control policies and procedures, such as procurement policies that adhere to state and local law, as well as federal regulations and statutes; procedures for documenting how costs are to be allocated to federal awards, documenting actual time and effort for payroll costs charged to federal awards; cash management procedures to minimize the time elapsed between the receipts and disbursements of federal funds; and, how to safeguard personally identifiable information. Condition: The District has not updated its existing policies and written procedures to conform to Uniform Guidance requirements. Cause: Staffing constraints have limited the District’s ability to perform a timely review of its existing policies and written procedures. Effect: Having insufficient or non-compliant written policies and procedures weaken internal controls over the federal awards received, increasing the risk of noncompliance with federal statutes and regulations. Questioned Costs: None reported. Identification of a Repeat Finding: This is a repeat finding from the previous audit referenced 2023-001. Recommendation: The District must review its existing written policies and procedures and update them as needed in order to comply with requirements of Uniform Guidance. Views of Responsible Officials of Auditee: The District’s Assistant Superintendent for Business will work on updating all policies and procedures relating to U.S. Office of Management and Budget Uniform Guidance to ensure policies are in compliance with these guidelines.
Significant Deficiency 2024-001. Procurement United States Department of Education, passed through New York State Department of Education Education Stabilization Fund COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief – Homeless Youth and Children ALN: 84.425W Criteria: 2 CFR §200.303 of the Uniform Guidance requires non-federal entities receiving federal awards to establish and maintain 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. Under the Uniform Guidance, federal awards recipients must maintain written documentation of internal control policies and procedures, such as procurement policies that adhere to state and local law, as well as federal regulations and statutes; procedures for documenting how costs are to be allocated to federal awards, documenting actual time and effort for payroll costs charged to federal awards; cash management procedures to minimize the time elapsed between the receipts and disbursements of federal funds; and, how to safeguard personally identifiable information. Condition: The District has not updated its existing policies and written procedures to conform to Uniform Guidance requirements. Cause: Staffing constraints have limited the District’s ability to perform a timely review of its existing policies and written procedures. Effect: Having insufficient or non-compliant written policies and procedures weaken internal controls over the federal awards received, increasing the risk of noncompliance with federal statutes and regulations. Questioned Costs: None reported. Identification of a Repeat Finding: This is a repeat finding from the previous audit referenced 2023-001. Recommendation: The District must review its existing written policies and procedures and update them as needed in order to comply with requirements of Uniform Guidance. Views of Responsible Officials of Auditee: The District’s Assistant Superintendent for Business will work on updating all policies and procedures relating to U.S. Office of Management and Budget Uniform Guidance to ensure policies are in compliance with these guidelines.
Significant Deficiency 2024-001. Procurement United States Department of Education, passed through New York State Department of Education Education Stabilization Fund COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief – Homeless Youth and Children ALN: 84.425W Criteria: 2 CFR §200.303 of the Uniform Guidance requires non-federal entities receiving federal awards to establish and maintain 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. Under the Uniform Guidance, federal awards recipients must maintain written documentation of internal control policies and procedures, such as procurement policies that adhere to state and local law, as well as federal regulations and statutes; procedures for documenting how costs are to be allocated to federal awards, documenting actual time and effort for payroll costs charged to federal awards; cash management procedures to minimize the time elapsed between the receipts and disbursements of federal funds; and, how to safeguard personally identifiable information. Condition: The District has not updated its existing policies and written procedures to conform to Uniform Guidance requirements. Cause: Staffing constraints have limited the District’s ability to perform a timely review of its existing policies and written procedures. Effect: Having insufficient or non-compliant written policies and procedures weaken internal controls over the federal awards received, increasing the risk of noncompliance with federal statutes and regulations. Questioned Costs: None reported. Identification of a Repeat Finding: This is a repeat finding from the previous audit referenced 2023-001. Recommendation: The District must review its existing written policies and procedures and update them as needed in order to comply with requirements of Uniform Guidance. Views of Responsible Officials of Auditee: The District’s Assistant Superintendent for Business will work on updating all policies and procedures relating to U.S. Office of Management and Budget Uniform Guidance to ensure policies are in compliance with these guidelines.
Federal Agency: US Department of Education (ED) Program Name: Student Financial Assistance Cluster: Federal Direct Student Loans ALN: 84.268 Award Numbers: N/A; Federal Awards Year 2023 - 2024 Questioned Costs: None Repeat Finding: No 2024-003. Finding: Errors in Reporting for NSLDS Northern Illinois University (the University) did not properly report enrollment changes for certain students who received federal student aid to the National Student Loan Data System (NSLDS) and the internal controls in place did not identify the errors. Condition: Out of 40 students tested, we noted 1 (2.5%) student in which the University did not report the correct enrollment effective date to the NSLDS at the Program Level. Out of 40 students tested, we noted 1 (2.5%) student in which the University did not report the correct enrollment effective date to the NSLDS at the Campus Level. Out of 40 students tested, we noted 1 (2.5%) student in which the University did not timely report the correct enrollment effective date to the NSLDS at the Campus Level. The sample was not intended to be, and was not, a statistically valid sample. Criteria: The Code of Federal Regulations (34 CFR 685.309) requires enrollment status changes for students to be reported to NSLDS within 30 days or within 60 days if the student with the status change will be reported on a scheduled transmission within 60 days of the change in status. Regulations require the status to include an accurate effective date. According to the NSLDS Enrollment Reporting Guide, a student’s Program-Level enrollment status should be reported with the same enrollment status as that student’s campus-level enrollment status for all programs the student is enrolled in at that location, even if the student is not currently taking coursework that applies to a particular program. If the student has withdrawn or graduated from an academic program, a “terminal enrollment status” of ‘W’ or ‘G,’ as appropriate, should be reported for that program, even if the student is still taking coursework applicable to other programs in which the student is enrolled. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure enrollment reporting is completed properly. Cause: University officials stated the two Campus Level exceptions were the result of a change to system configuration to reflect an academic policy change in the graduate school regarding the assignment of grades for course and program withdrawals. A new withdrawal grade code was implemented for 45 graduate students for the 2023-2024 academic year which caused the student information system enrollment reporting logic not to accurately calculate a withdrawal status for some students. University officials also stated the Program Level exception was the result of a misinterpretation of NSLDS reporting requirements regarding the appropriate effective date to provide in the event that a student’s withdrawal is processed on a later date than the withdrawal’s effective date. Effect: If the NSLDS system is not properly updated with the student information, overawards could occur should the student transfer to another institution and the student may not properly enter the repayment period. (Finding Code No. 2024-003) Recommendation: We recommend the University review current processes for reporting to NSLDS and implement procedures to ensure submissions are reported timely and accurately. University Response: Accepted. The University will take steps to address the recommendation in this finding. The University will correct the software issue which caused some students with the new withdrawal grade code to not have a withdrawal status calculated correctly at the campus level. The University will provide additional training and guidance to address the misinterpretation of withdrawal status effective date reporting which caused an error at the program level.
Federal Agency: US Department of Education (ED) Program Name: Fund for the Improvement of Postsecondary Education ALN: 84.116 Award Number: P116Z230260; Federal Awards Year 2023 - 2024 Questioned Costs: None Repeat Finding: No 2024-004. Finding: Internal Controls Over Procurement Northern Illinois University (the University) included incorrect documentation within purchase requisition forms for small purchases and simplified acquisition procurement transactions at the time of approval of the purchase which did not allow a reviewer to determine the appropriateness of the procurement method in the Fund for the Improvement of Postsecondary Education program. Condition: The University’s internal controls over purchases include review and approval of purchase requisitions in PeopleSoft that document the procurement method selected. Out of four small purchase procurement transactions tested, four transactions (100%) were approved based on a form that summarized the incorrect procurement method. The University incorrectly indicated on a small purchase waiver form that the transactions were exempt from procurement under Illinois Procurement Code (30 ILCS 500 / 1-13(b)(8)). Out of four transactions tested meeting the simplified acquisition threshold, four transactions (100%) were approved based on a form that summarized the incorrect procurement method. The University incorrectly indicated on a small purchase waiver form that the transactions were exempt from procurement under Illinois Procurement Code (30 ILCS 500 / 1-13(b)(8)). Based on additional information provided to us during our testing, the University did have other documentation to support the history of procurement, including rationale for the method of procurement and there were no indications that procurement methods ultimately used were inappropriate. The sample was not intended to be, and was not, a statistically valid sample. Criteria: Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure procurement procedures are properly followed and support is properly maintained as required by 2 CFR 200.318. Cause: University officials stated that staff turnover and lack of training on policies and procedures governing procurements subject to 2 CFR 200 lead to the incorrect documentation on the purchase requisitions. Effect: If the purchase requisition forms contain an incorrect rationale for the procurement method selected, the University could approve payments of federal funds to vendors that do not meet federal regulations. (Finding Code No. 2024-004) Recommendation: We recommend the University review current processes for small purchases and simplified acquisition transactions to ensure purchase requisition forms are completed correctly. University Response: Accepted. The University has already initiated a review of current processes and is taking steps to address the recommendation.
FINDING 2024-001 Subject: Special Education Cluster (IDEA) - Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): H027A190084, 22611-093-ARP, H173A180104, H173A210104, 22619-093-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Prior to entering into a covered transaction for goods and services equal to or over $25,000 that were paid with Special Education Cluster funds, recipients are required to verify that such contractors or vendors are not suspended, debarred, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. The verification is to be done by checking 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 School Corporation, the procedures in place over suspension and debarment during the audit period were to verify new vendors, when being entered into the system, were not excluded on SAM.gov. However, the School Corporation did not retain documentation of SAM.gov verifications, nor were checks done each year to verify that applicable vendors were still considered eligible under federal requirements. A population of six covered transactions for goods or services, totaling $569,754, that equaled or exceeded $25,000 paid from Special Education funds during the audit period was identified. No documentation was available to verify that the School Corporation performed the required checks. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 KOKOMO SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 31 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by the management of the School Corporation. The School Corporation was unable to provide documentation to demonstrate it checked SAM.gov or received certification from applicable vendors to verify that contractors and vendors were not suspended or debarred. 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. No documentation existed to ensure vendors to whom payments equal to or in excess of $25,000 were verified to not be suspended, debarred, or otherwise excluded. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation strengthen its system of internal controls to ensure that all vendors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal program before entering into any covered transactions and retain documentation to support the performance of these procedures. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: Special Education Cluster (IDEA) - Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): H027A190084, 22611-093-ARP, H173A180104, H173A210104, 22619-093-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Prior to entering into a covered transaction for goods and services equal to or over $25,000 that were paid with Special Education Cluster funds, recipients are required to verify that such contractors or vendors are not suspended, debarred, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. The verification is to be done by checking 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 School Corporation, the procedures in place over suspension and debarment during the audit period were to verify new vendors, when being entered into the system, were not excluded on SAM.gov. However, the School Corporation did not retain documentation of SAM.gov verifications, nor were checks done each year to verify that applicable vendors were still considered eligible under federal requirements. A population of six covered transactions for goods or services, totaling $569,754, that equaled or exceeded $25,000 paid from Special Education funds during the audit period was identified. No documentation was available to verify that the School Corporation performed the required checks. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 KOKOMO SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 31 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by the management of the School Corporation. The School Corporation was unable to provide documentation to demonstrate it checked SAM.gov or received certification from applicable vendors to verify that contractors and vendors were not suspended or debarred. 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. No documentation existed to ensure vendors to whom payments equal to or in excess of $25,000 were verified to not be suspended, debarred, or otherwise excluded. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation strengthen its system of internal controls to ensure that all vendors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal program before entering into any covered transactions and retain documentation to support the performance of these procedures. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: Special Education Cluster (IDEA) - Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): H027A190084, 22611-093-ARP, H173A180104, H173A210104, 22619-093-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Prior to entering into a covered transaction for goods and services equal to or over $25,000 that were paid with Special Education Cluster funds, recipients are required to verify that such contractors or vendors are not suspended, debarred, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. The verification is to be done by checking 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 School Corporation, the procedures in place over suspension and debarment during the audit period were to verify new vendors, when being entered into the system, were not excluded on SAM.gov. However, the School Corporation did not retain documentation of SAM.gov verifications, nor were checks done each year to verify that applicable vendors were still considered eligible under federal requirements. A population of six covered transactions for goods or services, totaling $569,754, that equaled or exceeded $25,000 paid from Special Education funds during the audit period was identified. No documentation was available to verify that the School Corporation performed the required checks. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 KOKOMO SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 31 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by the management of the School Corporation. The School Corporation was unable to provide documentation to demonstrate it checked SAM.gov or received certification from applicable vendors to verify that contractors and vendors were not suspended or debarred. 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. No documentation existed to ensure vendors to whom payments equal to or in excess of $25,000 were verified to not be suspended, debarred, or otherwise excluded. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation strengthen its system of internal controls to ensure that all vendors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal program before entering into any covered transactions and retain documentation to support the performance of these procedures. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: Special Education Cluster (IDEA) - Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): H027A190084, 22611-093-ARP, H173A180104, H173A210104, 22619-093-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Prior to entering into a covered transaction for goods and services equal to or over $25,000 that were paid with Special Education Cluster funds, recipients are required to verify that such contractors or vendors are not suspended, debarred, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. The verification is to be done by checking 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 School Corporation, the procedures in place over suspension and debarment during the audit period were to verify new vendors, when being entered into the system, were not excluded on SAM.gov. However, the School Corporation did not retain documentation of SAM.gov verifications, nor were checks done each year to verify that applicable vendors were still considered eligible under federal requirements. A population of six covered transactions for goods or services, totaling $569,754, that equaled or exceeded $25,000 paid from Special Education funds during the audit period was identified. No documentation was available to verify that the School Corporation performed the required checks. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 KOKOMO SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 31 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by the management of the School Corporation. The School Corporation was unable to provide documentation to demonstrate it checked SAM.gov or received certification from applicable vendors to verify that contractors and vendors were not suspended or debarred. 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. No documentation existed to ensure vendors to whom payments equal to or in excess of $25,000 were verified to not be suspended, debarred, or otherwise excluded. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation strengthen its system of internal controls to ensure that all vendors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal program before entering into any covered transactions and retain documentation to support the performance of these procedures. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: Special Education Cluster (IDEA) - Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): H027A190084, 22611-093-ARP, H173A180104, H173A210104, 22619-093-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Prior to entering into a covered transaction for goods and services equal to or over $25,000 that were paid with Special Education Cluster funds, recipients are required to verify that such contractors or vendors are not suspended, debarred, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. The verification is to be done by checking 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 School Corporation, the procedures in place over suspension and debarment during the audit period were to verify new vendors, when being entered into the system, were not excluded on SAM.gov. However, the School Corporation did not retain documentation of SAM.gov verifications, nor were checks done each year to verify that applicable vendors were still considered eligible under federal requirements. A population of six covered transactions for goods or services, totaling $569,754, that equaled or exceeded $25,000 paid from Special Education funds during the audit period was identified. No documentation was available to verify that the School Corporation performed the required checks. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 KOKOMO SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 31 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by the management of the School Corporation. The School Corporation was unable to provide documentation to demonstrate it checked SAM.gov or received certification from applicable vendors to verify that contractors and vendors were not suspended or debarred. 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. No documentation existed to ensure vendors to whom payments equal to or in excess of $25,000 were verified to not be suspended, debarred, or otherwise excluded. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation strengthen its system of internal controls to ensure that all vendors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal program before entering into any covered transactions and retain documentation to support the performance of these procedures. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: Special Education Cluster (IDEA) - Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): H027A190084, 22611-093-ARP, H173A180104, H173A210104, 22619-093-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Prior to entering into a covered transaction for goods and services equal to or over $25,000 that were paid with Special Education Cluster funds, recipients are required to verify that such contractors or vendors are not suspended, debarred, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. The verification is to be done by checking 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 School Corporation, the procedures in place over suspension and debarment during the audit period were to verify new vendors, when being entered into the system, were not excluded on SAM.gov. However, the School Corporation did not retain documentation of SAM.gov verifications, nor were checks done each year to verify that applicable vendors were still considered eligible under federal requirements. A population of six covered transactions for goods or services, totaling $569,754, that equaled or exceeded $25,000 paid from Special Education funds during the audit period was identified. No documentation was available to verify that the School Corporation performed the required checks. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 KOKOMO SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 31 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by the management of the School Corporation. The School Corporation was unable to provide documentation to demonstrate it checked SAM.gov or received certification from applicable vendors to verify that contractors and vendors were not suspended or debarred. 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. No documentation existed to ensure vendors to whom payments equal to or in excess of $25,000 were verified to not be suspended, debarred, or otherwise excluded. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation strengthen its system of internal controls to ensure that all vendors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal program before entering into any covered transactions and retain documentation to support the performance of these procedures. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: Special Education Cluster (IDEA) - Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): H027A190084, 22611-093-ARP, H173A180104, H173A210104, 22619-093-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Prior to entering into a covered transaction for goods and services equal to or over $25,000 that were paid with Special Education Cluster funds, recipients are required to verify that such contractors or vendors are not suspended, debarred, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. The verification is to be done by checking 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 School Corporation, the procedures in place over suspension and debarment during the audit period were to verify new vendors, when being entered into the system, were not excluded on SAM.gov. However, the School Corporation did not retain documentation of SAM.gov verifications, nor were checks done each year to verify that applicable vendors were still considered eligible under federal requirements. A population of six covered transactions for goods or services, totaling $569,754, that equaled or exceeded $25,000 paid from Special Education funds during the audit period was identified. No documentation was available to verify that the School Corporation performed the required checks. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 KOKOMO SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 31 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by the management of the School Corporation. The School Corporation was unable to provide documentation to demonstrate it checked SAM.gov or received certification from applicable vendors to verify that contractors and vendors were not suspended or debarred. 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. No documentation existed to ensure vendors to whom payments equal to or in excess of $25,000 were verified to not be suspended, debarred, or otherwise excluded. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation strengthen its system of internal controls to ensure that all vendors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal program before entering into any covered transactions and retain documentation to support the performance of these procedures. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: Special Education Cluster (IDEA) - Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): H027A190084, 22611-093-ARP, H173A180104, H173A210104, 22619-093-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Prior to entering into a covered transaction for goods and services equal to or over $25,000 that were paid with Special Education Cluster funds, recipients are required to verify that such contractors or vendors are not suspended, debarred, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. The verification is to be done by checking 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 School Corporation, the procedures in place over suspension and debarment during the audit period were to verify new vendors, when being entered into the system, were not excluded on SAM.gov. However, the School Corporation did not retain documentation of SAM.gov verifications, nor were checks done each year to verify that applicable vendors were still considered eligible under federal requirements. A population of six covered transactions for goods or services, totaling $569,754, that equaled or exceeded $25,000 paid from Special Education funds during the audit period was identified. No documentation was available to verify that the School Corporation performed the required checks. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 KOKOMO SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 31 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by the management of the School Corporation. The School Corporation was unable to provide documentation to demonstrate it checked SAM.gov or received certification from applicable vendors to verify that contractors and vendors were not suspended or debarred. 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. No documentation existed to ensure vendors to whom payments equal to or in excess of $25,000 were verified to not be suspended, debarred, or otherwise excluded. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation strengthen its system of internal controls to ensure that all vendors that are paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal program before entering into any covered transactions and retain documentation to support the performance of these procedures. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: Special Education Cluster (IDEA) - Equipment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States Assistance Listings Numbers: 84.027, 84.027X Federal Award Numbers and Years (or Other Identifying Numbers): H027A190084, 22611-093-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 17 KOKOMO SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding The same finding also appeared in prior Report B60713 as Finding 2022-001. Condition and Context Per federal requirements property records must contain the following information about the equipment: description (including serial number or other identification number), source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR 200.313(d)(1)). 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 Equipment and Real Property Management compliance requirement. The School Corporation purchased $243,903 of equipment with Special Education funds. Equipment, totaling $78,874, was not added to the School Corporation's capital asset record. The School Corporation's capital asset record did not include an allocation or designation of what items were purchased with federal funds. The School Corporation had another system, called Destiny, in place to track special education equipment purchases. This system did include the required federal parameters to satisfy the property record requirements; however, equipment, totaling $220,149, was not added to this record. Additionally, one equipment item added to the Destiny system for a stander had discrepancies. It was listed at a purchase price of $3,059 and an acquisition date of June 23, 2023. The School Corporation's capital asset listed it at $7,430 with an acquisition date of January 30, 2024. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d)(1) states: "Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property." INDIANA STATE BOARD OF ACCOUNTS 18 KOKOMO SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed and implemented by the management of the School Corporation. The School Corporation's policies and procedures for tracking equipment purchased with federal funds was not sufficient and/or properly implemented to ensure all equipment was properly recorded. 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, equipment purchased with federal funds for the Special Education program was not accurately recorded. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned cost identified. Recommendation We recommended that the School Corporation's management establish and properly implement a system of internal controls to ensure compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: Special Education Cluster (IDEA) - Equipment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States Assistance Listings Numbers: 84.027, 84.027X Federal Award Numbers and Years (or Other Identifying Numbers): H027A190084, 22611-093-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 17 KOKOMO SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding The same finding also appeared in prior Report B60713 as Finding 2022-001. Condition and Context Per federal requirements property records must contain the following information about the equipment: description (including serial number or other identification number), source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR 200.313(d)(1)). 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 Equipment and Real Property Management compliance requirement. The School Corporation purchased $243,903 of equipment with Special Education funds. Equipment, totaling $78,874, was not added to the School Corporation's capital asset record. The School Corporation's capital asset record did not include an allocation or designation of what items were purchased with federal funds. The School Corporation had another system, called Destiny, in place to track special education equipment purchases. This system did include the required federal parameters to satisfy the property record requirements; however, equipment, totaling $220,149, was not added to this record. Additionally, one equipment item added to the Destiny system for a stander had discrepancies. It was listed at a purchase price of $3,059 and an acquisition date of June 23, 2023. The School Corporation's capital asset listed it at $7,430 with an acquisition date of January 30, 2024. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d)(1) states: "Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property." INDIANA STATE BOARD OF ACCOUNTS 18 KOKOMO SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed and implemented by the management of the School Corporation. The School Corporation's policies and procedures for tracking equipment purchased with federal funds was not sufficient and/or properly implemented to ensure all equipment was properly recorded. 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, equipment purchased with federal funds for the Special Education program was not accurately recorded. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned cost identified. Recommendation We recommended that the School Corporation's management establish and properly implement a system of internal controls to ensure compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: Special Education Cluster (IDEA) - Equipment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States Assistance Listings Numbers: 84.027, 84.027X Federal Award Numbers and Years (or Other Identifying Numbers): H027A190084, 22611-093-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 17 KOKOMO SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding The same finding also appeared in prior Report B60713 as Finding 2022-001. Condition and Context Per federal requirements property records must contain the following information about the equipment: description (including serial number or other identification number), source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR 200.313(d)(1)). 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 Equipment and Real Property Management compliance requirement. The School Corporation purchased $243,903 of equipment with Special Education funds. Equipment, totaling $78,874, was not added to the School Corporation's capital asset record. The School Corporation's capital asset record did not include an allocation or designation of what items were purchased with federal funds. The School Corporation had another system, called Destiny, in place to track special education equipment purchases. This system did include the required federal parameters to satisfy the property record requirements; however, equipment, totaling $220,149, was not added to this record. Additionally, one equipment item added to the Destiny system for a stander had discrepancies. It was listed at a purchase price of $3,059 and an acquisition date of June 23, 2023. The School Corporation's capital asset listed it at $7,430 with an acquisition date of January 30, 2024. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d)(1) states: "Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property." INDIANA STATE BOARD OF ACCOUNTS 18 KOKOMO SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed and implemented by the management of the School Corporation. The School Corporation's policies and procedures for tracking equipment purchased with federal funds was not sufficient and/or properly implemented to ensure all equipment was properly recorded. 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, equipment purchased with federal funds for the Special Education program was not accurately recorded. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned cost identified. Recommendation We recommended that the School Corporation's management establish and properly implement a system of internal controls to ensure compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 Subject: Special Education Cluster (IDEA) - Equipment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States Assistance Listings Numbers: 84.027, 84.027X Federal Award Numbers and Years (or Other Identifying Numbers): H027A190084, 22611-093-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 17 KOKOMO SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding The same finding also appeared in prior Report B60713 as Finding 2022-001. Condition and Context Per federal requirements property records must contain the following information about the equipment: description (including serial number or other identification number), source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR 200.313(d)(1)). 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 Equipment and Real Property Management compliance requirement. The School Corporation purchased $243,903 of equipment with Special Education funds. Equipment, totaling $78,874, was not added to the School Corporation's capital asset record. The School Corporation's capital asset record did not include an allocation or designation of what items were purchased with federal funds. The School Corporation had another system, called Destiny, in place to track special education equipment purchases. This system did include the required federal parameters to satisfy the property record requirements; however, equipment, totaling $220,149, was not added to this record. Additionally, one equipment item added to the Destiny system for a stander had discrepancies. It was listed at a purchase price of $3,059 and an acquisition date of June 23, 2023. The School Corporation's capital asset listed it at $7,430 with an acquisition date of January 30, 2024. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d)(1) states: "Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property." INDIANA STATE BOARD OF ACCOUNTS 18 KOKOMO SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed and implemented by the management of the School Corporation. The School Corporation's policies and procedures for tracking equipment purchased with federal funds was not sufficient and/or properly implemented to ensure all equipment was properly recorded. 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, equipment purchased with federal funds for the Special Education program was not accurately recorded. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned cost identified. Recommendation We recommended that the School Corporation's management establish and properly implement a system of internal controls to ensure compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: Title I Grants to Local Educational Agencies - Eligibility Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years(or Other Identifying Numbers): S010A210014, S010A220014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 17 SOUTH HARRISON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance related to the enrollment and poverty data as reported by the School Corporation in its Title I applications. Enrollment and poverty numbers for nonpublic schools were entered manually into the Title I applications by the School Corporation. The School Corporation established a process to receive and review the listing of students from the nonpublic schools for enrollment and poverty counts to be entered in the application. The application is reviewed by the Title I Director and Director of Business Operations/Treasurer. However, the internal controls were ineffective as the School Corporation was unable to provide detailed support from the nonpublic school for the information reported in the grant applications. Therefore, we were unable to determine if the enrolled student count in the applications were accurate. 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). . . ." 34 CFR 200.78(a)(1) states: "After reserving funds, as applicable, under § 200.77, including funds for equitable services for private school students, their teachers, and their families, an LEA must allocate funds under this subpart to school attendance areas and schools, identified as eligible and selected to participate under section 1113(a) or (b) of the ESEA, in rank order on the basis of the total number of public school children from low-income families in each area or school." Cause The School Corporation did not maintain appropriate documentation from the nonpublic school corporation related to the applications for grant years 2022 or 2023. The School Corporation compiled a spreadsheet containing the nonpublic school information for both applications. The School Corporation stated that when preparing the spreadsheet for the 2023 application, the data for the prior year 2022 application was overridden without saving a copy. The School Corporation was unable to reproduce this information for review. The School Corporation also stated that due to staff changeover at one of the nonpublic schools, the School Corporation had difficulty obtaining accurate data and received information both verbally and via email multiple times from the nonpublic school. The data in the application did not agree to the information contained in the School Corporation's spreadsheet, and the School Corporation was unable to provide additional documentation supporting the data in the application. INDIANA STATE BOARD OF ACCOUNTS 18 SOUTH HARRISON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without a proper system of internal controls in place that operated effectively, the School Corporation did not properly maintain supporting documentation for the nonpublic schools' enrollment and poverty data reported in its Title I applications. Accordingly, the Indiana State Board of Accounts was unable to verify that this information was accurate to determine if the School Corporation complied with the Eligibility compliance requirement. Noncompliance with the provisions of federal statues, regulations, and the terms and conditions of the federal award could result in 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 a proper system of internal controls and strengthen its procedures to ensure all supporting documentation is maintained for future grant years. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: Title I Grants to Local Educational Agencies - Eligibility Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years(or Other Identifying Numbers): S010A210014, S010A220014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 17 SOUTH HARRISON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance related to the enrollment and poverty data as reported by the School Corporation in its Title I applications. Enrollment and poverty numbers for nonpublic schools were entered manually into the Title I applications by the School Corporation. The School Corporation established a process to receive and review the listing of students from the nonpublic schools for enrollment and poverty counts to be entered in the application. The application is reviewed by the Title I Director and Director of Business Operations/Treasurer. However, the internal controls were ineffective as the School Corporation was unable to provide detailed support from the nonpublic school for the information reported in the grant applications. Therefore, we were unable to determine if the enrolled student count in the applications were accurate. 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). . . ." 34 CFR 200.78(a)(1) states: "After reserving funds, as applicable, under § 200.77, including funds for equitable services for private school students, their teachers, and their families, an LEA must allocate funds under this subpart to school attendance areas and schools, identified as eligible and selected to participate under section 1113(a) or (b) of the ESEA, in rank order on the basis of the total number of public school children from low-income families in each area or school." Cause The School Corporation did not maintain appropriate documentation from the nonpublic school corporation related to the applications for grant years 2022 or 2023. The School Corporation compiled a spreadsheet containing the nonpublic school information for both applications. The School Corporation stated that when preparing the spreadsheet for the 2023 application, the data for the prior year 2022 application was overridden without saving a copy. The School Corporation was unable to reproduce this information for review. The School Corporation also stated that due to staff changeover at one of the nonpublic schools, the School Corporation had difficulty obtaining accurate data and received information both verbally and via email multiple times from the nonpublic school. The data in the application did not agree to the information contained in the School Corporation's spreadsheet, and the School Corporation was unable to provide additional documentation supporting the data in the application. INDIANA STATE BOARD OF ACCOUNTS 18 SOUTH HARRISON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without a proper system of internal controls in place that operated effectively, the School Corporation did not properly maintain supporting documentation for the nonpublic schools' enrollment and poverty data reported in its Title I applications. Accordingly, the Indiana State Board of Accounts was unable to verify that this information was accurate to determine if the School Corporation complied with the Eligibility compliance requirement. Noncompliance with the provisions of federal statues, regulations, and the terms and conditions of the federal award could result in 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 a proper system of internal controls and strengthen its procedures to ensure all supporting documentation is maintained for future grant years. 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: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425U Federal Award Number and Year (or Other Identifying Number): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Condition and Context As part of sound management of the federal award, the School Corporation was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The School Corporation had not properly designed or implemented such a system. The School Corporation was required to maintain a capital asset listing which would include a description of the property, a serial number of other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and use and condition of the property for assets purchased that exceeded the School Corporation's capitalization threshold. During the audit period, the School Corporation purchased one asset, a trailer, with COVID-19 - Education Stabilization Fund grant funds that exceeded the School Corporation's capitalization threshold. The School Corporation was not in compliance with the requirements of the federal award as adequate property records were not maintained for the asset purchased. Additionally, with no detailed listing of its capital assets, the School Corporation was unable to perform a physical inventory as required. INDIANA STATE BOARD OF ACCOUNTS 19 SOUTH HARRISON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d)(1) states: "Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property." Cause Management of the School Corporation acknowledged awareness of the requirement to maintain a complete detailed listing of capital assets, including those purchased with federal funds. However, due to time constraints, management had not been able to compile a list of assets purchased prior to the audit period and had only accumulated invoices for items purchased during the audit period that need to be added to the School Corporation's capital asset records. Effect Without a proper system of internal controls in place that operated effectively, the School Corporation did not maintain capital asset records and, therefore, did not conduct a physical inventory, both of which resulted in material noncompliance with the requirements of the federal award. The lack of capital asset records and periodic physical inventories renders the School Corporation incapable of ensuring that capital assets purchased with federal funds are properly safeguarded and maintained. 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 the School Corporation's management establish a proper system of internal controls and compile the required capital asset listing as well as conduct periodic physical inventories. INDIANA STATE BOARD OF ACCOUNTS 20 SOUTH HARRISON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425U Federal Award Number and Year (or Other Identifying Number): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Condition and Context As part of sound management of the federal award, the School Corporation was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The School Corporation had not properly designed or implemented such a system. The School Corporation was required to maintain a capital asset listing which would include a description of the property, a serial number of other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and use and condition of the property for assets purchased that exceeded the School Corporation's capitalization threshold. During the audit period, the School Corporation purchased one asset, a trailer, with COVID-19 - Education Stabilization Fund grant funds that exceeded the School Corporation's capitalization threshold. The School Corporation was not in compliance with the requirements of the federal award as adequate property records were not maintained for the asset purchased. Additionally, with no detailed listing of its capital assets, the School Corporation was unable to perform a physical inventory as required. INDIANA STATE BOARD OF ACCOUNTS 19 SOUTH HARRISON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d)(1) states: "Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property." Cause Management of the School Corporation acknowledged awareness of the requirement to maintain a complete detailed listing of capital assets, including those purchased with federal funds. However, due to time constraints, management had not been able to compile a list of assets purchased prior to the audit period and had only accumulated invoices for items purchased during the audit period that need to be added to the School Corporation's capital asset records. Effect Without a proper system of internal controls in place that operated effectively, the School Corporation did not maintain capital asset records and, therefore, did not conduct a physical inventory, both of which resulted in material noncompliance with the requirements of the federal award. The lack of capital asset records and periodic physical inventories renders the School Corporation incapable of ensuring that capital assets purchased with federal funds are properly safeguarded and maintained. 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 the School Corporation's management establish a proper system of internal controls and compile the required capital asset listing as well as conduct periodic physical inventories. INDIANA STATE BOARD OF ACCOUNTS 20 SOUTH HARRISON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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: 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): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context As part of sound management of the federal award, the School Corporation was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The School Corporation had not properly designed or implemented such a system, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and key line items such as "Number of Specific Positions Supported with ESSER Funds," "Allocation of ESSER funds . . .," "LEA expenditures by ESSER Subgrant fund . . .," and "Full-Time Equivalency Positions." During the audit period, the School Corporation submitted one ESSER I report, two ESSER II reports, and two ESSER III reports for a total of five reports. There was no evidence of an oversight, review, or approval process to prevent, or detect and correct, errors prior to submission. All five reports were selected for testing. Three of the reports were not supported by the School Corporation's records. The following errors were identified: The ESSER II, Year 2 and Year 3 reports, which covered the periods of July 1, 2021 to June 30, 2022, and July 1, 2022 to June 30, 2023, respectively, Key Line Items were not able to be traced to supporting documentation. For both reports, Personnel Services - Salaries could not be traced to the School Corporation's records. For the ESSER II, Year 3 report, Supplies could not be traced to the School Corporation's records. The ESSER III, Year 3 report, which covered the period of July 1, 2022 to June 30, 2023, Key Line Items were not able to be traced to supporting documentation. The School Corporation reported amounts related to Personnel Services - Salaries and Supplies that were not supported by the School Corporation's records. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 21 SOUTH HARRISON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 200.302(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 and 200.329. . . ." 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. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause Due to problems encountered during the uploading process in JotForm, the School Corporation was unaware that information submitted was incorrect after multiple attempts at uploading at the Indiana Department of Education's request. Additionally, the School Corporation's management had not developed a system of internal controls to ensure that reports required for COVID-19 - Education Stabilization Funds were accurate, supported by the School Corporation's records, and reviewed prior to submission. Effect Due to a lack of review and segregation of duties, the School Corporation submitted ESSER II and ESSER III reports that were not supported by the School Corporation's records. As a result, material noncompliance occurred and remained undetected. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls and strengthen its policies and procedures to ensure all reports submitted are accurate. INDIANA STATE BOARD OF ACCOUNTS 22 SOUTH HARRISON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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: 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): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context As part of sound management of the federal award, the School Corporation was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The School Corporation had not properly designed or implemented such a system, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and key line items such as "Number of Specific Positions Supported with ESSER Funds," "Allocation of ESSER funds . . .," "LEA expenditures by ESSER Subgrant fund . . .," and "Full-Time Equivalency Positions." During the audit period, the School Corporation submitted one ESSER I report, two ESSER II reports, and two ESSER III reports for a total of five reports. There was no evidence of an oversight, review, or approval process to prevent, or detect and correct, errors prior to submission. All five reports were selected for testing. Three of the reports were not supported by the School Corporation's records. The following errors were identified: The ESSER II, Year 2 and Year 3 reports, which covered the periods of July 1, 2021 to June 30, 2022, and July 1, 2022 to June 30, 2023, respectively, Key Line Items were not able to be traced to supporting documentation. For both reports, Personnel Services - Salaries could not be traced to the School Corporation's records. For the ESSER II, Year 3 report, Supplies could not be traced to the School Corporation's records. The ESSER III, Year 3 report, which covered the period of July 1, 2022 to June 30, 2023, Key Line Items were not able to be traced to supporting documentation. The School Corporation reported amounts related to Personnel Services - Salaries and Supplies that were not supported by the School Corporation's records. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 21 SOUTH HARRISON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 200.302(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 and 200.329. . . ." 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. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause Due to problems encountered during the uploading process in JotForm, the School Corporation was unaware that information submitted was incorrect after multiple attempts at uploading at the Indiana Department of Education's request. Additionally, the School Corporation's management had not developed a system of internal controls to ensure that reports required for COVID-19 - Education Stabilization Funds were accurate, supported by the School Corporation's records, and reviewed prior to submission. Effect Due to a lack of review and segregation of duties, the School Corporation submitted ESSER II and ESSER III reports that were not supported by the School Corporation's records. As a result, material noncompliance occurred and remained undetected. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls and strengthen its policies and procedures to ensure all reports submitted are accurate. INDIANA STATE BOARD OF ACCOUNTS 22 SOUTH HARRISON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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: 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): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context As part of sound management of the federal award, the School Corporation was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The School Corporation had not properly designed or implemented such a system, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and key line items such as "Number of Specific Positions Supported with ESSER Funds," "Allocation of ESSER funds . . .," "LEA expenditures by ESSER Subgrant fund . . .," and "Full-Time Equivalency Positions." During the audit period, the School Corporation submitted one ESSER I report, two ESSER II reports, and two ESSER III reports for a total of five reports. There was no evidence of an oversight, review, or approval process to prevent, or detect and correct, errors prior to submission. All five reports were selected for testing. Three of the reports were not supported by the School Corporation's records. The following errors were identified: The ESSER II, Year 2 and Year 3 reports, which covered the periods of July 1, 2021 to June 30, 2022, and July 1, 2022 to June 30, 2023, respectively, Key Line Items were not able to be traced to supporting documentation. For both reports, Personnel Services - Salaries could not be traced to the School Corporation's records. For the ESSER II, Year 3 report, Supplies could not be traced to the School Corporation's records. The ESSER III, Year 3 report, which covered the period of July 1, 2022 to June 30, 2023, Key Line Items were not able to be traced to supporting documentation. The School Corporation reported amounts related to Personnel Services - Salaries and Supplies that were not supported by the School Corporation's records. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 21 SOUTH HARRISON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 200.302(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 and 200.329. . . ." 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. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause Due to problems encountered during the uploading process in JotForm, the School Corporation was unaware that information submitted was incorrect after multiple attempts at uploading at the Indiana Department of Education's request. Additionally, the School Corporation's management had not developed a system of internal controls to ensure that reports required for COVID-19 - Education Stabilization Funds were accurate, supported by the School Corporation's records, and reviewed prior to submission. Effect Due to a lack of review and segregation of duties, the School Corporation submitted ESSER II and ESSER III reports that were not supported by the School Corporation's records. As a result, material noncompliance occurred and remained undetected. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls and strengthen its policies and procedures to ensure all reports submitted are accurate. INDIANA STATE BOARD OF ACCOUNTS 22 SOUTH HARRISON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.