Federal agency: Department of Education Federal program title: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Federal Award Identification Number and Year: P007A223438 - 2023, P033A223438 - 2023, P063P222047 - 2023, P268K232047 - 2023 Award Period: July 1, 2022 to June 30, 2023 Type of Finding: • Compliance, Other Matter • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 34 CFR 668.21(a) states that the institution must return all title IV, HEA program funds that were credited to the student's account at the institution or disbursed directly to the student for the payment period. The institution must return those funds no later than 30 days after the date that the institution becomes aware that the student will not or has not begun attendance. Per 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 incorrectly calculated and did not disburse aid timely for Return to Title IV (R2T4) calculations. The University also did not have formal procedures in place to review the Return to Title IV calculations. Context: During our testing of 14 R2T4s, we identified that 9 R2T4 calculations had mechanically incorrect calculations. Out of the 9, 7 had the incorrect number of scheduled break days, and 6 had incorrect disbursed amounts. Also, during our testing, we identified 1 instance of payments returned later than 45 days after withdrawal. Additionally, we were unable to identify formal control procedures related to Return to Title IV transactions. Questioned costs: $3,391 Cause: The University was incorrectly calculating R2T4s as well as using the incorrect number of scheduled break days for Spring Semester. Additionally, the University did not have a formal procedure for reviewing R2T4s. Effect: The University could return incorrect amounts based off of their calculations and incorrect calculations could affect student repayment amounts based off of amount earned. Repeat Finding: No. Recommendation: We recommend the University document review of Return to Title IV calculations by an employee that did not prepare the calculations. We also recommend that the University review policies and procedures related to R2T4 calculations to ensure calculations are performed correctly and disbursed timely. Views of responsible officials: Management agrees with the finding and has developed a plan to correct the finding.
Federal agency: Department of Education Federal program title: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Federal Award Identification Number and Year: P007A223438 - 2023, P033A223438 - 2023, P063P222047 - 2023, P268K232047 - 2023 Award Period: July 1, 2022 to June 30, 2023 Type of Finding: • Compliance, Other Matter • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 34 CFR 668.21(a) states that the institution must return all title IV, HEA program funds that were credited to the student's account at the institution or disbursed directly to the student for the payment period. The institution must return those funds no later than 30 days after the date that the institution becomes aware that the student will not or has not begun attendance. Per 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 incorrectly calculated and did not disburse aid timely for Return to Title IV (R2T4) calculations. The University also did not have formal procedures in place to review the Return to Title IV calculations. Context: During our testing of 14 R2T4s, we identified that 9 R2T4 calculations had mechanically incorrect calculations. Out of the 9, 7 had the incorrect number of scheduled break days, and 6 had incorrect disbursed amounts. Also, during our testing, we identified 1 instance of payments returned later than 45 days after withdrawal. Additionally, we were unable to identify formal control procedures related to Return to Title IV transactions. Questioned costs: $3,391 Cause: The University was incorrectly calculating R2T4s as well as using the incorrect number of scheduled break days for Spring Semester. Additionally, the University did not have a formal procedure for reviewing R2T4s. Effect: The University could return incorrect amounts based off of their calculations and incorrect calculations could affect student repayment amounts based off of amount earned. Repeat Finding: No. Recommendation: We recommend the University document review of Return to Title IV calculations by an employee that did not prepare the calculations. We also recommend that the University review policies and procedures related to R2T4 calculations to ensure calculations are performed correctly and disbursed timely. Views of responsible officials: Management agrees with the finding and has developed a plan to correct the finding.
Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.063, 84.268 Federal Award Identification Number: P033A228259, P268K234721 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Internal Control - Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the non- Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should 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). Compliance – The Code of Federal Regulations, 34 CFR 685.309(b), states that Colleges must have some arrangement to report student enrollment data to the National Student Loan Data System (NSLDS) through an enrollment roster file. The college is required to report changes in the student’s enrollment status, the effective date of the status, and an anticipated completion date. Also, the Code of Federal Regulations, 34 CFR 682.610, states that college must report accurately the enrollment status of all students regardless if they receive aid from the institution or not. Condition: Incorrect enrollment status and effective date was reported to NSLDS. Context: The enrollment status was incorrectly reported for 1 out of 12 students. The effective date was incorrectly reported for 1 out of 12 students. Questioned Costs: None Cause: The college uses the National Student Clearinghouse (NSC) to transmit transmitted over to the National Student Loan Data System (NSLDS). During the course of the year it was determined that information did not properly interface. Effect: NSLDS did not contain the most up-to-date enrollment status and effective dates. Repeat Finding: No. Recommendation: The College should evaluate their procedures and policies related to reporting status changes to NSLDS and enhance as deemed necessary to ensure that accurate information is reported to NSLDS. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.063, 84.268 Federal Award Identification Number: P033A228259, P268K234721 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Internal Control - Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the non- Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should 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). Compliance – The Code of Federal Regulations, 34 CFR 685.309(b), states that Colleges must have some arrangement to report student enrollment data to the National Student Loan Data System (NSLDS) through an enrollment roster file. The college is required to report changes in the student’s enrollment status, the effective date of the status, and an anticipated completion date. Also, the Code of Federal Regulations, 34 CFR 682.610, states that college must report accurately the enrollment status of all students regardless if they receive aid from the institution or not. Condition: Incorrect enrollment status and effective date was reported to NSLDS. Context: The enrollment status was incorrectly reported for 1 out of 12 students. The effective date was incorrectly reported for 1 out of 12 students. Questioned Costs: None Cause: The college uses the National Student Clearinghouse (NSC) to transmit transmitted over to the National Student Loan Data System (NSLDS). During the course of the year it was determined that information did not properly interface. Effect: NSLDS did not contain the most up-to-date enrollment status and effective dates. Repeat Finding: No. Recommendation: The College should evaluate their procedures and policies related to reporting status changes to NSLDS and enhance as deemed necessary to ensure that accurate information is reported to NSLDS. Views of Responsible Officials: There is no disagreement with the audit finding.
Excess Food Service Fund Balance (Material Weakness) Federal Agency: U.S. Department of Agriculture Pass-through Agency: New Hampshire Department of Education Cluster/Program: Child Nutrition Cluster Assistance Listing Numbers: 10.553 & 10.555 Passed-through Identification: N/A Compliance Requirement: Special Tests and Provisions Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the School District, as a recipient of Federal funds, must establish and maintain effective internal controls 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. In addition, under 7 CFR, 210.14(b), Net Cash Resources, “the school food authority shall limit its net cash resources to an amount that does not exceed 3 months average expenditures for its nonprofit school food service.” Condition: During review of the food service unassigned fund balance, it was noted that the balance exceeded three months’ average expenditures. The fund balance in the food service fund amounted to $655,749 whereas three months’ average expenditures is $419,360. This generates excess fund balance of $236,389. Effect: The District is not in compliance with CFR Title 7, 210.14(b) by maintaining fund balance more than three months average expenditures. Cause: Lack of administrative oversight. Questioned Costs: $236,389. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District take immediate steps to reduce its net cash resources by having an acceptable, approved plan for using surplus fund balance. Since program funds must be used only for program purposes, excess fund balance must be reduced by improving the quality of food served or purchasing needed supplies, services, or equipment unless otherwise directed by the State of New Hampshire Department of Education. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-002: Written Internal Control Policies and Federal Grant Award Procedures Finding Prior Year Findings: Yes, 2022-003 Department Agency: Department of Interior State Department: Wyoming State Loan & Investment Board Office of State Lands & Investments Assistance Listing Number: ALN # 15.252 Type of Finding: Significant Deficiency Questioned Costs: None Criteria: Federal regulations 2 CFR 200.303 states non-Federal entity establish and maintain effective internal control over the Federal awards. Internal controls is generally defined as a process effected by an entity's oversight body, management, and other personnel that provides reasonable assurance that the objectives of an entity will be achieved. Internal control is not one event or circumstance, but a dynamic and iterative process-actions that permeate an entity's activities and are an integral part of the way auditee management runs the entity. Condition: The Town did not have written internal controls and Federal grant award policies in place. Cause and Effect: The Town is not dependent of Federal revenues, and had significant staff turnover of key positions. Repeat Finding: Yes Recommendation: We recommend that the Town of Dayton develop and adopt written internal controls and Federal grant award procedures. These policies and procedures need to be reviewed annually based on Federal agencies awarding the Federal funds. Response: Please see the last page of this report for the Town's response to this finding.
Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Passed Through: Missouri Department of Elementary and Secondary Education Federal Agency: U.S. Department of Education Finding Type: Material weakness Condition: The District was unable to provide documentary evidence that the amounts paid in salaries and wages to two individuals charged to the Education Stabilization Fund program were authorized the Board of Education, as required by District policy. Effect: A sample of 40 transactions was selected for audit. The sample size included 30 individuals’ salaries and wages. Of the 30 individuals selected for testing, evidence of authorized salaries and wages was not able to be provided for two individuals. This condition increases the risk that material noncompliance could occur and not be detected and corrected. Cause: During the current year, the District experienced a significant amount of turnover in several key positions, which led to several positions being vacant for significant periods of time during the year. During this period of transition, management did not devote sufficient resources or consideration to ensuring that internal control systems for the federal program were functioning effectively. Criteria: The Uniform Guidance (2 CFR section 200.303) requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards Questioned Costs: Unknown Recommendation: Subsequent to June 30, 2023, management has filled the vacant positions and is working to reinstate the lapsed internal controls to ensure that responsibilities are properly separated and that there is monitoring over key processes. We recommend that management continue to evaluate the key processes, identify risks in the existing processes, and implement internal controls to respond to the identified risks. Views of Responsible Officials and Planned Corrective Action: The District agrees with the finding and the recommendations of the auditors. The District has taken a number of steps to improve internal controls and will finalize a comprehensive plan for robust internal controls reinstatement by January 10, 2024. Since the arrival of new Human Resources Leadership in the fall of 2022, steps have been taken to ensure that all employee contracts are kept on file in hard copy and digital. The missing files occurred during a transition period during the hire and rehire period of spring and summer 2022, before the arrival of new leadership. At this time, the Human Resources department ensures redundancy of storage of these contracts, with both paper copies and digital copies of all signed contracts kept in secure spaces. A staff member is charged to ensure these are all filed, and the Supervisor does an internal audit to ensure safekeeping. Going forward, the Human Resources Director will conduct quarterly checks, in May, August, November, and February to ensure all files are in place.
Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Passed Through: Missouri Department of Elementary and Secondary Education Federal Agency: U.S. Department of Education Finding Type: Material weakness Condition: The District was unable to provide documentary evidence that the amounts paid in salaries and wages to two individuals charged to the Education Stabilization Fund program were authorized the Board of Education, as required by District policy. Effect: A sample of 40 transactions was selected for audit. The sample size included 30 individuals’ salaries and wages. Of the 30 individuals selected for testing, evidence of authorized salaries and wages was not able to be provided for two individuals. This condition increases the risk that material noncompliance could occur and not be detected and corrected. Cause: During the current year, the District experienced a significant amount of turnover in several key positions, which led to several positions being vacant for significant periods of time during the year. During this period of transition, management did not devote sufficient resources or consideration to ensuring that internal control systems for the federal program were functioning effectively. Criteria: The Uniform Guidance (2 CFR section 200.303) requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards Questioned Costs: Unknown Recommendation: Subsequent to June 30, 2023, management has filled the vacant positions and is working to reinstate the lapsed internal controls to ensure that responsibilities are properly separated and that there is monitoring over key processes. We recommend that management continue to evaluate the key processes, identify risks in the existing processes, and implement internal controls to respond to the identified risks. Views of Responsible Officials and Planned Corrective Action: The District agrees with the finding and the recommendations of the auditors. The District has taken a number of steps to improve internal controls and will finalize a comprehensive plan for robust internal controls reinstatement by January 10, 2024. Since the arrival of new Human Resources Leadership in the fall of 2022, steps have been taken to ensure that all employee contracts are kept on file in hard copy and digital. The missing files occurred during a transition period during the hire and rehire period of spring and summer 2022, before the arrival of new leadership. At this time, the Human Resources department ensures redundancy of storage of these contracts, with both paper copies and digital copies of all signed contracts kept in secure spaces. A staff member is charged to ensure these are all filed, and the Supervisor does an internal audit to ensure safekeeping. Going forward, the Human Resources Director will conduct quarterly checks, in May, August, November, and February to ensure all files are in place.
Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Passed Through: Missouri Department of Elementary and Secondary Education Federal Agency: U.S. Department of Education Finding Type: Material weakness Condition: The District was unable to provide documentary evidence that the amounts paid in salaries and wages to two individuals charged to the Education Stabilization Fund program were authorized the Board of Education, as required by District policy. Effect: A sample of 40 transactions was selected for audit. The sample size included 30 individuals’ salaries and wages. Of the 30 individuals selected for testing, evidence of authorized salaries and wages was not able to be provided for two individuals. This condition increases the risk that material noncompliance could occur and not be detected and corrected. Cause: During the current year, the District experienced a significant amount of turnover in several key positions, which led to several positions being vacant for significant periods of time during the year. During this period of transition, management did not devote sufficient resources or consideration to ensuring that internal control systems for the federal program were functioning effectively. Criteria: The Uniform Guidance (2 CFR section 200.303) requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards Questioned Costs: Unknown Recommendation: Subsequent to June 30, 2023, management has filled the vacant positions and is working to reinstate the lapsed internal controls to ensure that responsibilities are properly separated and that there is monitoring over key processes. We recommend that management continue to evaluate the key processes, identify risks in the existing processes, and implement internal controls to respond to the identified risks. Views of Responsible Officials and Planned Corrective Action: The District agrees with the finding and the recommendations of the auditors. The District has taken a number of steps to improve internal controls and will finalize a comprehensive plan for robust internal controls reinstatement by January 10, 2024. Since the arrival of new Human Resources Leadership in the fall of 2022, steps have been taken to ensure that all employee contracts are kept on file in hard copy and digital. The missing files occurred during a transition period during the hire and rehire period of spring and summer 2022, before the arrival of new leadership. At this time, the Human Resources department ensures redundancy of storage of these contracts, with both paper copies and digital copies of all signed contracts kept in secure spaces. A staff member is charged to ensure these are all filed, and the Supervisor does an internal audit to ensure safekeeping. Going forward, the Human Resources Director will conduct quarterly checks, in May, August, November, and February to ensure all files are in place.
Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Passed Through: Missouri Department of Elementary and Secondary Education Federal Agency: U.S. Department of Education Finding Type: Material weakness Condition: The District was unable to provide documentary evidence that the amounts paid in salaries and wages to two individuals charged to the Education Stabilization Fund program were authorized the Board of Education, as required by District policy. Effect: A sample of 40 transactions was selected for audit. The sample size included 30 individuals’ salaries and wages. Of the 30 individuals selected for testing, evidence of authorized salaries and wages was not able to be provided for two individuals. This condition increases the risk that material noncompliance could occur and not be detected and corrected. Cause: During the current year, the District experienced a significant amount of turnover in several key positions, which led to several positions being vacant for significant periods of time during the year. During this period of transition, management did not devote sufficient resources or consideration to ensuring that internal control systems for the federal program were functioning effectively. Criteria: The Uniform Guidance (2 CFR section 200.303) requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards Questioned Costs: Unknown Recommendation: Subsequent to June 30, 2023, management has filled the vacant positions and is working to reinstate the lapsed internal controls to ensure that responsibilities are properly separated and that there is monitoring over key processes. We recommend that management continue to evaluate the key processes, identify risks in the existing processes, and implement internal controls to respond to the identified risks. Views of Responsible Officials and Planned Corrective Action: The District agrees with the finding and the recommendations of the auditors. The District has taken a number of steps to improve internal controls and will finalize a comprehensive plan for robust internal controls reinstatement by January 10, 2024. Since the arrival of new Human Resources Leadership in the fall of 2022, steps have been taken to ensure that all employee contracts are kept on file in hard copy and digital. The missing files occurred during a transition period during the hire and rehire period of spring and summer 2022, before the arrival of new leadership. At this time, the Human Resources department ensures redundancy of storage of these contracts, with both paper copies and digital copies of all signed contracts kept in secure spaces. A staff member is charged to ensure these are all filed, and the Supervisor does an internal audit to ensure safekeeping. Going forward, the Human Resources Director will conduct quarterly checks, in May, August, November, and February to ensure all files are in place.
Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Passed Through: Missouri Department of Elementary and Secondary Education Federal Agency: U.S. Department of Education Finding Type: Material weakness Condition: The District was unable to provide documentary evidence that the amounts paid in salaries and wages to two individuals charged to the Education Stabilization Fund program were authorized the Board of Education, as required by District policy. Effect: A sample of 40 transactions was selected for audit. The sample size included 30 individuals’ salaries and wages. Of the 30 individuals selected for testing, evidence of authorized salaries and wages was not able to be provided for two individuals. This condition increases the risk that material noncompliance could occur and not be detected and corrected. Cause: During the current year, the District experienced a significant amount of turnover in several key positions, which led to several positions being vacant for significant periods of time during the year. During this period of transition, management did not devote sufficient resources or consideration to ensuring that internal control systems for the federal program were functioning effectively. Criteria: The Uniform Guidance (2 CFR section 200.303) requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards Questioned Costs: Unknown Recommendation: Subsequent to June 30, 2023, management has filled the vacant positions and is working to reinstate the lapsed internal controls to ensure that responsibilities are properly separated and that there is monitoring over key processes. We recommend that management continue to evaluate the key processes, identify risks in the existing processes, and implement internal controls to respond to the identified risks. Views of Responsible Officials and Planned Corrective Action: The District agrees with the finding and the recommendations of the auditors. The District has taken a number of steps to improve internal controls and will finalize a comprehensive plan for robust internal controls reinstatement by January 10, 2024. Since the arrival of new Human Resources Leadership in the fall of 2022, steps have been taken to ensure that all employee contracts are kept on file in hard copy and digital. The missing files occurred during a transition period during the hire and rehire period of spring and summer 2022, before the arrival of new leadership. At this time, the Human Resources department ensures redundancy of storage of these contracts, with both paper copies and digital copies of all signed contracts kept in secure spaces. A staff member is charged to ensure these are all filed, and the Supervisor does an internal audit to ensure safekeeping. Going forward, the Human Resources Director will conduct quarterly checks, in May, August, November, and February to ensure all files are in place.
Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Passed Through: Missouri Department of Elementary and Secondary Education Federal Agency: U.S. Department of Education Finding Type: Material weakness Condition: The District was unable to provide documentary evidence that the amounts paid in salaries and wages to two individuals charged to the Education Stabilization Fund program were authorized the Board of Education, as required by District policy. Effect: A sample of 40 transactions was selected for audit. The sample size included 30 individuals’ salaries and wages. Of the 30 individuals selected for testing, evidence of authorized salaries and wages was not able to be provided for two individuals. This condition increases the risk that material noncompliance could occur and not be detected and corrected. Cause: During the current year, the District experienced a significant amount of turnover in several key positions, which led to several positions being vacant for significant periods of time during the year. During this period of transition, management did not devote sufficient resources or consideration to ensuring that internal control systems for the federal program were functioning effectively. Criteria: The Uniform Guidance (2 CFR section 200.303) requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards Questioned Costs: Unknown Recommendation: Subsequent to June 30, 2023, management has filled the vacant positions and is working to reinstate the lapsed internal controls to ensure that responsibilities are properly separated and that there is monitoring over key processes. We recommend that management continue to evaluate the key processes, identify risks in the existing processes, and implement internal controls to respond to the identified risks. Views of Responsible Officials and Planned Corrective Action: The District agrees with the finding and the recommendations of the auditors. The District has taken a number of steps to improve internal controls and will finalize a comprehensive plan for robust internal controls reinstatement by January 10, 2024. Since the arrival of new Human Resources Leadership in the fall of 2022, steps have been taken to ensure that all employee contracts are kept on file in hard copy and digital. The missing files occurred during a transition period during the hire and rehire period of spring and summer 2022, before the arrival of new leadership. At this time, the Human Resources department ensures redundancy of storage of these contracts, with both paper copies and digital copies of all signed contracts kept in secure spaces. A staff member is charged to ensure these are all filed, and the Supervisor does an internal audit to ensure safekeeping. Going forward, the Human Resources Director will conduct quarterly checks, in May, August, November, and February to ensure all files are in place.
FINDING 2023-002 Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the activities allowed or unallowed and allowable costs/cost principle 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 pays approximately ninety-five percent of its Child Nutrition Cluster funding to a Food Service Management Company. For the year ended June 30, 2022, the School Corporation paid the FMSC approximately $412,000. For the year ended June 30, 2022, the School Corporation only reviewed a summary level invoice from the service provider which did not include the underlying support or detail of the reimbursable costs incurred by the service provider. The School Corporation received the underlying support of the costs incurred for the year ended June 30, 2023. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation establish a documented, primary review of all Child Nutrition Cluster account payable claims before they are paid. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-002 Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the activities allowed or unallowed and allowable costs/cost principle 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 pays approximately ninety-five percent of its Child Nutrition Cluster funding to a Food Service Management Company. For the year ended June 30, 2022, the School Corporation paid the FMSC approximately $412,000. For the year ended June 30, 2022, the School Corporation only reviewed a summary level invoice from the service provider which did not include the underlying support or detail of the reimbursable costs incurred by the service provider. The School Corporation received the underlying support of the costs incurred for the year ended June 30, 2023. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation establish a documented, primary review of all Child Nutrition Cluster account payable claims before they are paid. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-002 Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the activities allowed or unallowed and allowable costs/cost principle 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 pays approximately ninety-five percent of its Child Nutrition Cluster funding to a Food Service Management Company. For the year ended June 30, 2022, the School Corporation paid the FMSC approximately $412,000. For the year ended June 30, 2022, the School Corporation only reviewed a summary level invoice from the service provider which did not include the underlying support or detail of the reimbursable costs incurred by the service provider. The School Corporation received the underlying support of the costs incurred for the year ended June 30, 2023. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School Corporation establish a documented, primary review of all Child Nutrition Cluster account payable claims before they are paid. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-003 Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the cash management compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the reporting requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of 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: $20 Context: We noted that for two claims in a sample of four, the Food Service Director prepared the reimbursement claim without a secondary, documented review to ensure the accuracy of the reimbursement claim. Additionally, the number of meals claimed on one of the four claims sampled did not agree to the supporting meal system reports. The net overstatement of meals claimed for the four claims sampled was 4 meals resulting in an over reimbursement amount of $20. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and cash management compliance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-003 Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the cash management compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the reporting requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of 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: $20 Context: We noted that for two claims in a sample of four, the Food Service Director prepared the reimbursement claim without a secondary, documented review to ensure the accuracy of the reimbursement claim. Additionally, the number of meals claimed on one of the four claims sampled did not agree to the supporting meal system reports. The net overstatement of meals claimed for the four claims sampled was 4 meals resulting in an over reimbursement amount of $20. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and cash management compliance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-003 Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the cash management compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the reporting requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of 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: $20 Context: We noted that for two claims in a sample of four, the Food Service Director prepared the reimbursement claim without a secondary, documented review to ensure the accuracy of the reimbursement claim. Additionally, the number of meals claimed on one of the four claims sampled did not agree to the supporting meal system reports. The net overstatement of meals claimed for the four claims sampled was 4 meals resulting in an over reimbursement amount of $20. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and cash management compliance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-004 Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Eligibility compliance 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: During testing of 60 students for eligibility, we noted 21 instances where there was no documented review by someone other than the individual making the eligibility determination. The lack of review was isolated to online applications. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and Eligibility compliance requirements. Views of Responsible Officials and Planned Corrective Actions: For the views of the responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Eligibility compliance 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: During testing of 60 students for eligibility, we noted 21 instances where there was no documented review by someone other than the individual making the eligibility determination. The lack of review was isolated to online applications. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and Eligibility compliance requirements. Views of Responsible Officials and Planned Corrective Actions: For the views of the responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Eligibility compliance 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: During testing of 60 students for eligibility, we noted 21 instances where there was no documented review by someone other than the individual making the eligibility determination. The lack of review was isolated to online applications. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and Eligibility compliance requirements. Views of Responsible Officials and Planned Corrective Actions: For the views of the responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 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: 84.425C, 84.425D & 84.425U Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs- Cost Principles Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed, Allowable Costs- Cost Principles compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. 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: We noted that there was no primary, documented review for three of the nine sample vendor accounts payable vouchers. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a documented, primary review of all accounts payable claims before they are paid. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-005 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: 84.425C, 84.425D & 84.425U Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs- Cost Principles Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed, Allowable Costs- Cost Principles compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. 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: We noted that there was no primary, documented review for three of the nine sample vendor accounts payable vouchers. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a documented, primary review of all accounts payable claims before they are paid. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-005 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: 84.425C, 84.425D & 84.425U Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs- Cost Principles Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed, Allowable Costs- Cost Principles compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. 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: We noted that there was no primary, documented review for three of the nine sample vendor accounts payable vouchers. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a documented, primary review of all accounts payable claims before they are paid. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-005 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: 84.425C, 84.425D & 84.425U Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs- Cost Principles Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed, Allowable Costs- Cost Principles compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. 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: We noted that there was no primary, documented review for three of the nine sample vendor accounts payable vouchers. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a documented, primary review of all accounts payable claims before they are paid. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-005 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: 84.425C, 84.425D & 84.425U Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs- Cost Principles Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed, Allowable Costs- Cost Principles compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. 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: We noted that there was no primary, documented review for three of the nine sample vendor accounts payable vouchers. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a documented, primary review of all accounts payable claims before they are paid. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2023-007 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 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: a.The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in §5.1, the following clauses… (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics… (3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency) Finding 2023-007 (Continued) 2 CFR 200 Appendix II states in part: In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week.. . .”Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirements.Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. Noncompliance with the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation did not have an internal controls/procedure in place to ensure compliance with the Davis-Bacon requirement. For the 1 sample item selected for testing, the School Corporation did not include the wage-rate requirements in the contract. The School Corporation did receive the weekly payroll reports as required. The sample item cost $869,637 to install energy conversation measures. The finding is isolated to the ESSER III grant (84.425U). Identification as a repeat finding: No. Recommendation: We recommend the School Corporation include Davis-Bacon wage requirements in vendor contracts which are federally funded. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2023-007 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 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: a.The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in §5.1, the following clauses… (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics… (3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency) Finding 2023-007 (Continued) 2 CFR 200 Appendix II states in part: In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week.. . .”Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirements.Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. Noncompliance with the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation did not have an internal controls/procedure in place to ensure compliance with the Davis-Bacon requirement. For the 1 sample item selected for testing, the School Corporation did not include the wage-rate requirements in the contract. The School Corporation did receive the weekly payroll reports as required. The sample item cost $869,637 to install energy conversation measures. The finding is isolated to the ESSER III grant (84.425U). Identification as a repeat finding: No. Recommendation: We recommend the School Corporation include Davis-Bacon wage requirements in vendor contracts which are federally funded. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
2023-003 (2019-010) CASH MANAGEMENT – Repeated and Modified Federal Agency: U.S. Department of Homeland Security/FEMA Federal Program Title & Assistance Listing Number: Disaster Grants – Public Assistance (Presidentially Declared Disasters) - 97.036 Emergency Management Performance Grants – 97.042 Pre-Disaster Mitigation – 97.047 Homeland Security Grant Program – 97.067 Award Period: Various Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Non-compliance Condition In the audit for fiscal year ended June 30, 2022, the Department was unable to provide sufficient audit evidence regarding the accuracy, completeness, and valuation of the Federal accounts receivable/payable and related deferred inflows of resources balances as of June 30, 2022. During fiscal year 2023 and during fiscal year-end close, management continued to research, identify, and resolve a substantial majority of them by dollar amount. As a result of resolving these issues, the Department made or will make some untimely drawdowns of federal awards outside the quarterly reporting process. As a result of research performed by management and from the final reconciliation of those balances as of June 30, 2023, management was able to reduce the deficit fund balance in the Federal Grants Fund from $11,169,582 (before restatement) to $8,645,124, as of June 30, 2022 and 2023, respectively. Of the June 30, 2023 balance, $5,808,116 of the deficit balance is driven by revenues that were classified as deferred inflows, and are considered to be unavailable as they relate to FEMA funds that were not received within 90 days after fiscal year-end. For the two largest balances that make up this amount, first, management expects to draw $1,814,028 in Homeland Security Grant funds in early November 2023. Also, the Department has incurred $2,944,261 in management costs that they expect to bill to the Public Assistance Disaster Grants. Of the remaining deficit of $2,887,586 in the Federal Grants Fund that is not explained by these deferred inflows, the entire amount relates to $2,989,552 in grants awarded to two subrecipients several years ago, for which the Department is not able to draw funds from the federal government. These amounts have been allowed for (see Note 4). Management’s Progress for Repeated Findings: Management did make significant progress implementing adequate controls to resolve the finding from the prior years, resulting in an improvement from a Qualified Opinion to an Unmodified Opinion on the Federal Grants Fund, Federal Grants Fund Budgetary Comparison, and for Governmental Activities. However, a material weakness still exists over controls over these account balances. Criteria According to §200.303 Internal controls of 2 CFR Part 200, the non- Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Specific to the Department, federal reimbursement requests are completed quarterly with the reporting process. According to NMSA 1978 §6.-5-2, the Financial Control Division (the division) shall issue a manual of model accounting practices containing the procedures and policies. State agencies shall comply with the model accounting practices established by the division, and the administrative head of each state agency shall ensure that the model accounting practices are followed. According to FIN 16 General Accounting Practices in the Manual of Model Accounting Practices, all reporting of financial information must be timely, complete, and accurate, to the state agency’s management and to oversight agencies and entities. Effect State agency’s management and other agencies and entities may not be able to rely on the financial information presented by the Department due to untimely, incomplete, and inaccurate financial reporting. The Federal Government may place the Department on controlled draws. Cause While the Department has made significant improvements from prior year related to the reconciliation and draw down of all federal receivables, the Department continues to lack an effective control environment that allows for timely and accurate drawdowns, financial reporting, and accounting of the Department’s Federal accounts receivable/payable balance and related deferred inflows of resources.
2023-003 (2019-010) CASH MANAGEMENT – Repeated and Modified Federal Agency: U.S. Department of Homeland Security/FEMA Federal Program Title & Assistance Listing Number: Disaster Grants – Public Assistance (Presidentially Declared Disasters) - 97.036 Emergency Management Performance Grants – 97.042 Pre-Disaster Mitigation – 97.047 Homeland Security Grant Program – 97.067 Award Period: Various Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Non-compliance Condition In the audit for fiscal year ended June 30, 2022, the Department was unable to provide sufficient audit evidence regarding the accuracy, completeness, and valuation of the Federal accounts receivable/payable and related deferred inflows of resources balances as of June 30, 2022. During fiscal year 2023 and during fiscal year-end close, management continued to research, identify, and resolve a substantial majority of them by dollar amount. As a result of resolving these issues, the Department made or will make some untimely drawdowns of federal awards outside the quarterly reporting process. As a result of research performed by management and from the final reconciliation of those balances as of June 30, 2023, management was able to reduce the deficit fund balance in the Federal Grants Fund from $11,169,582 (before restatement) to $8,645,124, as of June 30, 2022 and 2023, respectively. Of the June 30, 2023 balance, $5,808,116 of the deficit balance is driven by revenues that were classified as deferred inflows, and are considered to be unavailable as they relate to FEMA funds that were not received within 90 days after fiscal year-end. For the two largest balances that make up this amount, first, management expects to draw $1,814,028 in Homeland Security Grant funds in early November 2023. Also, the Department has incurred $2,944,261 in management costs that they expect to bill to the Public Assistance Disaster Grants. Of the remaining deficit of $2,887,586 in the Federal Grants Fund that is not explained by these deferred inflows, the entire amount relates to $2,989,552 in grants awarded to two subrecipients several years ago, for which the Department is not able to draw funds from the federal government. These amounts have been allowed for (see Note 4). Management’s Progress for Repeated Findings: Management did make significant progress implementing adequate controls to resolve the finding from the prior years, resulting in an improvement from a Qualified Opinion to an Unmodified Opinion on the Federal Grants Fund, Federal Grants Fund Budgetary Comparison, and for Governmental Activities. However, a material weakness still exists over controls over these account balances. Criteria According to §200.303 Internal controls of 2 CFR Part 200, the non- Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Specific to the Department, federal reimbursement requests are completed quarterly with the reporting process. According to NMSA 1978 §6.-5-2, the Financial Control Division (the division) shall issue a manual of model accounting practices containing the procedures and policies. State agencies shall comply with the model accounting practices established by the division, and the administrative head of each state agency shall ensure that the model accounting practices are followed. According to FIN 16 General Accounting Practices in the Manual of Model Accounting Practices, all reporting of financial information must be timely, complete, and accurate, to the state agency’s management and to oversight agencies and entities. Effect State agency’s management and other agencies and entities may not be able to rely on the financial information presented by the Department due to untimely, incomplete, and inaccurate financial reporting. The Federal Government may place the Department on controlled draws. Cause While the Department has made significant improvements from prior year related to the reconciliation and draw down of all federal receivables, the Department continues to lack an effective control environment that allows for timely and accurate drawdowns, financial reporting, and accounting of the Department’s Federal accounts receivable/payable balance and related deferred inflows of resources.
2023-003 (2019-010) CASH MANAGEMENT – Repeated and Modified Federal Agency: U.S. Department of Homeland Security/FEMA Federal Program Title & Assistance Listing Number: Disaster Grants – Public Assistance (Presidentially Declared Disasters) - 97.036 Emergency Management Performance Grants – 97.042 Pre-Disaster Mitigation – 97.047 Homeland Security Grant Program – 97.067 Award Period: Various Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Non-compliance Condition In the audit for fiscal year ended June 30, 2022, the Department was unable to provide sufficient audit evidence regarding the accuracy, completeness, and valuation of the Federal accounts receivable/payable and related deferred inflows of resources balances as of June 30, 2022. During fiscal year 2023 and during fiscal year-end close, management continued to research, identify, and resolve a substantial majority of them by dollar amount. As a result of resolving these issues, the Department made or will make some untimely drawdowns of federal awards outside the quarterly reporting process. As a result of research performed by management and from the final reconciliation of those balances as of June 30, 2023, management was able to reduce the deficit fund balance in the Federal Grants Fund from $11,169,582 (before restatement) to $8,645,124, as of June 30, 2022 and 2023, respectively. Of the June 30, 2023 balance, $5,808,116 of the deficit balance is driven by revenues that were classified as deferred inflows, and are considered to be unavailable as they relate to FEMA funds that were not received within 90 days after fiscal year-end. For the two largest balances that make up this amount, first, management expects to draw $1,814,028 in Homeland Security Grant funds in early November 2023. Also, the Department has incurred $2,944,261 in management costs that they expect to bill to the Public Assistance Disaster Grants. Of the remaining deficit of $2,887,586 in the Federal Grants Fund that is not explained by these deferred inflows, the entire amount relates to $2,989,552 in grants awarded to two subrecipients several years ago, for which the Department is not able to draw funds from the federal government. These amounts have been allowed for (see Note 4). Management’s Progress for Repeated Findings: Management did make significant progress implementing adequate controls to resolve the finding from the prior years, resulting in an improvement from a Qualified Opinion to an Unmodified Opinion on the Federal Grants Fund, Federal Grants Fund Budgetary Comparison, and for Governmental Activities. However, a material weakness still exists over controls over these account balances. Criteria According to §200.303 Internal controls of 2 CFR Part 200, the non- Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Specific to the Department, federal reimbursement requests are completed quarterly with the reporting process. According to NMSA 1978 §6.-5-2, the Financial Control Division (the division) shall issue a manual of model accounting practices containing the procedures and policies. State agencies shall comply with the model accounting practices established by the division, and the administrative head of each state agency shall ensure that the model accounting practices are followed. According to FIN 16 General Accounting Practices in the Manual of Model Accounting Practices, all reporting of financial information must be timely, complete, and accurate, to the state agency’s management and to oversight agencies and entities. Effect State agency’s management and other agencies and entities may not be able to rely on the financial information presented by the Department due to untimely, incomplete, and inaccurate financial reporting. The Federal Government may place the Department on controlled draws. Cause While the Department has made significant improvements from prior year related to the reconciliation and draw down of all federal receivables, the Department continues to lack an effective control environment that allows for timely and accurate drawdowns, financial reporting, and accounting of the Department’s Federal accounts receivable/payable balance and related deferred inflows of resources.
2023-003 (2019-010) CASH MANAGEMENT – Repeated and Modified Federal Agency: U.S. Department of Homeland Security/FEMA Federal Program Title & Assistance Listing Number: Disaster Grants – Public Assistance (Presidentially Declared Disasters) - 97.036 Emergency Management Performance Grants – 97.042 Pre-Disaster Mitigation – 97.047 Homeland Security Grant Program – 97.067 Award Period: Various Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Non-compliance Condition In the audit for fiscal year ended June 30, 2022, the Department was unable to provide sufficient audit evidence regarding the accuracy, completeness, and valuation of the Federal accounts receivable/payable and related deferred inflows of resources balances as of June 30, 2022. During fiscal year 2023 and during fiscal year-end close, management continued to research, identify, and resolve a substantial majority of them by dollar amount. As a result of resolving these issues, the Department made or will make some untimely drawdowns of federal awards outside the quarterly reporting process. As a result of research performed by management and from the final reconciliation of those balances as of June 30, 2023, management was able to reduce the deficit fund balance in the Federal Grants Fund from $11,169,582 (before restatement) to $8,645,124, as of June 30, 2022 and 2023, respectively. Of the June 30, 2023 balance, $5,808,116 of the deficit balance is driven by revenues that were classified as deferred inflows, and are considered to be unavailable as they relate to FEMA funds that were not received within 90 days after fiscal year-end. For the two largest balances that make up this amount, first, management expects to draw $1,814,028 in Homeland Security Grant funds in early November 2023. Also, the Department has incurred $2,944,261 in management costs that they expect to bill to the Public Assistance Disaster Grants. Of the remaining deficit of $2,887,586 in the Federal Grants Fund that is not explained by these deferred inflows, the entire amount relates to $2,989,552 in grants awarded to two subrecipients several years ago, for which the Department is not able to draw funds from the federal government. These amounts have been allowed for (see Note 4). Management’s Progress for Repeated Findings: Management did make significant progress implementing adequate controls to resolve the finding from the prior years, resulting in an improvement from a Qualified Opinion to an Unmodified Opinion on the Federal Grants Fund, Federal Grants Fund Budgetary Comparison, and for Governmental Activities. However, a material weakness still exists over controls over these account balances. Criteria According to §200.303 Internal controls of 2 CFR Part 200, the non- Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Specific to the Department, federal reimbursement requests are completed quarterly with the reporting process. According to NMSA 1978 §6.-5-2, the Financial Control Division (the division) shall issue a manual of model accounting practices containing the procedures and policies. State agencies shall comply with the model accounting practices established by the division, and the administrative head of each state agency shall ensure that the model accounting practices are followed. According to FIN 16 General Accounting Practices in the Manual of Model Accounting Practices, all reporting of financial information must be timely, complete, and accurate, to the state agency’s management and to oversight agencies and entities. Effect State agency’s management and other agencies and entities may not be able to rely on the financial information presented by the Department due to untimely, incomplete, and inaccurate financial reporting. The Federal Government may place the Department on controlled draws. Cause While the Department has made significant improvements from prior year related to the reconciliation and draw down of all federal receivables, the Department continues to lack an effective control environment that allows for timely and accurate drawdowns, financial reporting, and accounting of the Department’s Federal accounts receivable/payable balance and related deferred inflows of resources.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion Condition and Context Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to its laborers and mechanics. Nonfederal entities are to include in its construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. The School Corporation had not designed nor implemented a system of internal controls to ensure that construction contracts in excess of $2,000 paid from federal grant funds included a prevailing wage rate clause. Three construction contracts, totaling $252,795, were paid from the COVID-19 - Education Stabilization Fund grant funds during the audit period. All three contracts were tested; however, none of the contracts contained the required prevailing wage rate clause nor were certified payrolls submitted by the contractors. INDIANA STATE BOARD OF ACCOUNTS 18 SOUTH NEWTON 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). . . ." 29 CFR 5.5 states in part: "(a) The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in § 5.1, the following clauses . . . (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (3) Payrolls and basic records. . . . (i) (A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). . . ." INDIANA STATE BOARD OF ACCOUNTS 19 SOUTH NEWTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, construction contracts entered into did not contain the required wage rate requirements clauses nor were certified payrolls obtained by the School Corporation. Noncompliance with the grant agreement and the compliance requirement 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 system of internal controls and include the wage rate requirement clause in construction contracts. In addition, certified payrolls should be obtained as required. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion Condition and Context Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to its laborers and mechanics. Nonfederal entities are to include in its construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. The School Corporation had not designed nor implemented a system of internal controls to ensure that construction contracts in excess of $2,000 paid from federal grant funds included a prevailing wage rate clause. Three construction contracts, totaling $252,795, were paid from the COVID-19 - Education Stabilization Fund grant funds during the audit period. All three contracts were tested; however, none of the contracts contained the required prevailing wage rate clause nor were certified payrolls submitted by the contractors. INDIANA STATE BOARD OF ACCOUNTS 18 SOUTH NEWTON 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). . . ." 29 CFR 5.5 states in part: "(a) The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in § 5.1, the following clauses . . . (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (3) Payrolls and basic records. . . . (i) (A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). . . ." INDIANA STATE BOARD OF ACCOUNTS 19 SOUTH NEWTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, construction contracts entered into did not contain the required wage rate requirements clauses nor were certified payrolls obtained by the School Corporation. Noncompliance with the grant agreement and the compliance requirement 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 system of internal controls and include the wage rate requirement clause in construction contracts. In addition, certified payrolls should be obtained as required. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion Condition and Context Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to its laborers and mechanics. Nonfederal entities are to include in its construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. The School Corporation had not designed nor implemented a system of internal controls to ensure that construction contracts in excess of $2,000 paid from federal grant funds included a prevailing wage rate clause. Three construction contracts, totaling $252,795, were paid from the COVID-19 - Education Stabilization Fund grant funds during the audit period. All three contracts were tested; however, none of the contracts contained the required prevailing wage rate clause nor were certified payrolls submitted by the contractors. INDIANA STATE BOARD OF ACCOUNTS 18 SOUTH NEWTON 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). . . ." 29 CFR 5.5 states in part: "(a) The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in § 5.1, the following clauses . . . (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (3) Payrolls and basic records. . . . (i) (A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). . . ." INDIANA STATE BOARD OF ACCOUNTS 19 SOUTH NEWTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, construction contracts entered into did not contain the required wage rate requirements clauses nor were certified payrolls obtained by the School Corporation. Noncompliance with the grant agreement and the compliance requirement 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 system of internal controls and include the wage rate requirement clause in construction contracts. In addition, certified payrolls should be obtained as required. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion Condition and Context Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to its laborers and mechanics. Nonfederal entities are to include in its construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. The School Corporation had not designed nor implemented a system of internal controls to ensure that construction contracts in excess of $2,000 paid from federal grant funds included a prevailing wage rate clause. Three construction contracts, totaling $252,795, were paid from the COVID-19 - Education Stabilization Fund grant funds during the audit period. All three contracts were tested; however, none of the contracts contained the required prevailing wage rate clause nor were certified payrolls submitted by the contractors. INDIANA STATE BOARD OF ACCOUNTS 18 SOUTH NEWTON 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). . . ." 29 CFR 5.5 states in part: "(a) The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in § 5.1, the following clauses . . . (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (3) Payrolls and basic records. . . . (i) (A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). . . ." INDIANA STATE BOARD OF ACCOUNTS 19 SOUTH NEWTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, construction contracts entered into did not contain the required wage rate requirements clauses nor were certified payrolls obtained by the School Corporation. Noncompliance with the grant agreement and the compliance requirement 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 system of internal controls and include the wage rate requirement clause in construction contracts. In addition, certified payrolls should be obtained as required. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Program - AL 21.027 – COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – Suspension & Debarment Grant Number & Year - SLFRP1474, March 3, 2021, through December 31, 2024 Federal Grantor Agency - U.S. Department of the Treasury Criteria - Title 2 of the U.S. Code of Federal Regulations (CFR) § 200.303 (January 1, 2023) states the following, in relevant 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). The U.S. Department of the Treasury adopted the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR § 1000.10 (January 1, 2023), which states the following: Except for the deviations set forth elsewhere in this Part, the Department of the Treasury adopts the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, set forth at 2 CFR part 200. 2 CFR § 200.214 (January 1, 2023) states the following: Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR § 180.300 (January 1, 2023) requires non-Federal entities to verify that an entity is not excluded or disqualified prior to entering into a covered transaction by: “(a) Checking SAM Exclusions; or (b) Collecting a certification from that . . . [entity]; or (c) Adding a clause or condition to the covered transaction with that . . . [entity].” A good internal control plan requires the County to have proper procedures in place to verify that contractors paid with Federal funds are not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities. Condition - Jefferson County could not provide documentation to support that the County implemented effective internal controls to ensure that suspension and debarment requirements were followed and adequately documented for vendor claims. We noted the County used Coronavirus State and Local Fiscal Recovery Funds to pay four vendors over $25,000, totaling $594,385, during the fiscal year ended June 30, 2023. The County failed to ensure that these vendors were not excluded or disqualified prior to entering into these covered transactions. We reviewed SAM.gov, and noted that none of these vendors were suspended, debarred, or otherwise excluded from participation in Federal programs or activities as of the date testing was performed. Repeat Finding - No Questioned Costs - None Statistical Sample - No Context - The following table provides details of the covered transactions noted: [TABLE] Cause - Lack of procedures and knowledge regarding suspension and debarment requirements. Effect - Without adequate procedures to ensure contractors are not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities, there is an increased risk for the misuse of Federal funds and noncompliance with Federal regulations, leading to possible Federal sanctions. Recommendation - We recommend the County implement procedures to ensure, prior to entering into a covered transaction, that a contractor is not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities, and those procedures are adequately documented. View of Officials - The County plans to check the SAM (System for Award Management) formerly Excluded Parties Listing System (EPLS), which is maintained by the General Services Administration before any funds are disbursed to vendors/entities.
FINDING 2023-001 Information on the federal program: Subject: Special Education Cluster (IDEA) – Suspension and Debarment Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listing Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (Or Other Identifying Number): 21611-095-PN01, 22611-095-PN01, 22611-095-ARP, 23611-095-PN01, 22619-095-PN01, 23619-095-PN01, 22619-095-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreements and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish internal controls enabled noncompliance to go undetected. The failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: During the audit period, the School Corporation had purchases over $25,000 from one vendor charged to the Special Education Cluster grants which requires suspension and debarment procedures. For the vendor selected for testing, there was no evidence provided to verify that the vendor was checked for suspension and debarment prior to entering into the transaction. The total amount disbursed to the vendor during the audit period was $113,921. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include verifying suspension and debarment status, obtaining a certification from the vendor, or adding a clause or condition to the contract with the vendor prior to entering into the transaction. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-001 Information on the federal program: Subject: Special Education Cluster (IDEA) – Suspension and Debarment Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listing Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (Or Other Identifying Number): 21611-095-PN01, 22611-095-PN01, 22611-095-ARP, 23611-095-PN01, 22619-095-PN01, 23619-095-PN01, 22619-095-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreements and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish internal controls enabled noncompliance to go undetected. The failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: During the audit period, the School Corporation had purchases over $25,000 from one vendor charged to the Special Education Cluster grants which requires suspension and debarment procedures. For the vendor selected for testing, there was no evidence provided to verify that the vendor was checked for suspension and debarment prior to entering into the transaction. The total amount disbursed to the vendor during the audit period was $113,921. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include verifying suspension and debarment status, obtaining a certification from the vendor, or adding a clause or condition to the contract with the vendor prior to entering into the transaction. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-001 Information on the federal program: Subject: Special Education Cluster (IDEA) – Suspension and Debarment Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listing Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (Or Other Identifying Number): 21611-095-PN01, 22611-095-PN01, 22611-095-ARP, 23611-095-PN01, 22619-095-PN01, 23619-095-PN01, 22619-095-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreements and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish internal controls enabled noncompliance to go undetected. The failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: During the audit period, the School Corporation had purchases over $25,000 from one vendor charged to the Special Education Cluster grants which requires suspension and debarment procedures. For the vendor selected for testing, there was no evidence provided to verify that the vendor was checked for suspension and debarment prior to entering into the transaction. The total amount disbursed to the vendor during the audit period was $113,921. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include verifying suspension and debarment status, obtaining a certification from the vendor, or adding a clause or condition to the contract with the vendor prior to entering into the transaction. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-001 Information on the federal program: Subject: Special Education Cluster (IDEA) – Suspension and Debarment Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listing Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (Or Other Identifying Number): 21611-095-PN01, 22611-095-PN01, 22611-095-ARP, 23611-095-PN01, 22619-095-PN01, 23619-095-PN01, 22619-095-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreements and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish internal controls enabled noncompliance to go undetected. The failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: During the audit period, the School Corporation had purchases over $25,000 from one vendor charged to the Special Education Cluster grants which requires suspension and debarment procedures. For the vendor selected for testing, there was no evidence provided to verify that the vendor was checked for suspension and debarment prior to entering into the transaction. The total amount disbursed to the vendor during the audit period was $113,921. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include verifying suspension and debarment status, obtaining a certification from the vendor, or adding a clause or condition to the contract with the vendor prior to entering into the transaction. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-001 Information on the federal program: Subject: Special Education Cluster (IDEA) – Suspension and Debarment Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listing Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (Or Other Identifying Number): 21611-095-PN01, 22611-095-PN01, 22611-095-ARP, 23611-095-PN01, 22619-095-PN01, 23619-095-PN01, 22619-095-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreements and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish internal controls enabled noncompliance to go undetected. The failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: During the audit period, the School Corporation had purchases over $25,000 from one vendor charged to the Special Education Cluster grants which requires suspension and debarment procedures. For the vendor selected for testing, there was no evidence provided to verify that the vendor was checked for suspension and debarment prior to entering into the transaction. The total amount disbursed to the vendor during the audit period was $113,921. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include verifying suspension and debarment status, obtaining a certification from the vendor, or adding a clause or condition to the contract with the vendor prior to entering into the transaction. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-001 Information on the federal program: Subject: Special Education Cluster (IDEA) – Suspension and Debarment Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listing Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (Or Other Identifying Number): 21611-095-PN01, 22611-095-PN01, 22611-095-ARP, 23611-095-PN01, 22619-095-PN01, 23619-095-PN01, 22619-095-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreements and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish internal controls enabled noncompliance to go undetected. The failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: During the audit period, the School Corporation had purchases over $25,000 from one vendor charged to the Special Education Cluster grants which requires suspension and debarment procedures. For the vendor selected for testing, there was no evidence provided to verify that the vendor was checked for suspension and debarment prior to entering into the transaction. The total amount disbursed to the vendor during the audit period was $113,921. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include verifying suspension and debarment status, obtaining a certification from the vendor, or adding a clause or condition to the contract with the vendor prior to entering into the transaction. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-001 Information on the federal program: Subject: Special Education Cluster (IDEA) – Suspension and Debarment Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listing Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (Or Other Identifying Number): 21611-095-PN01, 22611-095-PN01, 22611-095-ARP, 23611-095-PN01, 22619-095-PN01, 23619-095-PN01, 22619-095-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreements and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish internal controls enabled noncompliance to go undetected. The failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: During the audit period, the School Corporation had purchases over $25,000 from one vendor charged to the Special Education Cluster grants which requires suspension and debarment procedures. For the vendor selected for testing, there was no evidence provided to verify that the vendor was checked for suspension and debarment prior to entering into the transaction. The total amount disbursed to the vendor during the audit period was $113,921. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include verifying suspension and debarment status, obtaining a certification from the vendor, or adding a clause or condition to the contract with the vendor prior to entering into the transaction. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Federal Agency: U.S. Department of Education Pass-through Entity: None Federal Program: Student Financial Assistance Cluster (Federal Assistance Listing No.’s 84.007, 84.033, 84.038, 84.063, 84.268, 84.379) Requirement: Eligibility and Special Tests and Provisions Criteria: In accordance with 2 CFR 200.303, the College must establish and maintain effective internal control over the Federal awards to provide reasonable assurance the College is in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. The College must have systems in place that provide reasonable assurance that the information is accurate, allowable, and in compliance with the terms and conditions of the grant agreement. Volume 4 of the Federal Student Aid Handbook states a school must ensure that its administrative procedures for the FSA programs include an adequate system of internal controls. Effective internal control systems ensure the College is meeting its fiduciary responsibilities related to Title IV funds. Condition: Overrides for special circumstance requests and income verifications can be performed by any individual with access to the College’s financial aid packaging software without prior approval. Cause of Condition: An internal control over electronic data processing for software security is missing. Effect: Unauthorized overrides to student eligibility and income, which would affect the level of a student’s award. Questioned Costs: No questioned costs. Perspective Information: N/A Recommendation: Volume 4 of the Federal Student Aid Handbook states that electronic data processing controls should be in place to only allow individuals with special security classifications to make changes to the programs that determine student need and awards. The system should also be able to identify the individuals who make such changes. Due to the smaller size of the College and limited staff and resources, it is not feasible for the College to restrict security access. Thus, we recommend a review system be put in place prior to the entry of system overrides in the software system to ensure the override is properly authorized. Views of Responsible Official(s): The College implemented a policy where all special circumstance requests and income verification overrides must be reviewed by a second staff member effective September 2023. The second staff member reviews each override, either approves or denies the paperwork, then signs and dates the paperwork. The paperwork is returned to the first staff member to make the changes in PowerFAIDS. The responsible college official is Tina Wiseman, Director of Financial Aid. See Corrective Action Plan.
Federal Agency: U.S. Department of Education Pass-through Entity: None Federal Program: Student Financial Assistance Cluster (Federal Assistance Listing No.’s 84.007, 84.033, 84.038, 84.063, 84.268, 84.379) Requirement: Eligibility and Special Tests and Provisions Criteria: In accordance with 2 CFR 200.303, the College must establish and maintain effective internal control over the Federal awards to provide reasonable assurance the College is in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. The College must have systems in place that provide reasonable assurance that the information is accurate, allowable, and in compliance with the terms and conditions of the grant agreement. Volume 4 of the Federal Student Aid Handbook states a school must ensure that its administrative procedures for the FSA programs include an adequate system of internal controls. Effective internal control systems ensure the College is meeting its fiduciary responsibilities related to Title IV funds. Condition: Overrides for special circumstance requests and income verifications can be performed by any individual with access to the College’s financial aid packaging software without prior approval. Cause of Condition: An internal control over electronic data processing for software security is missing. Effect: Unauthorized overrides to student eligibility and income, which would affect the level of a student’s award. Questioned Costs: No questioned costs. Perspective Information: N/A Recommendation: Volume 4 of the Federal Student Aid Handbook states that electronic data processing controls should be in place to only allow individuals with special security classifications to make changes to the programs that determine student need and awards. The system should also be able to identify the individuals who make such changes. Due to the smaller size of the College and limited staff and resources, it is not feasible for the College to restrict security access. Thus, we recommend a review system be put in place prior to the entry of system overrides in the software system to ensure the override is properly authorized. Views of Responsible Official(s): The College implemented a policy where all special circumstance requests and income verification overrides must be reviewed by a second staff member effective September 2023. The second staff member reviews each override, either approves or denies the paperwork, then signs and dates the paperwork. The paperwork is returned to the first staff member to make the changes in PowerFAIDS. The responsible college official is Tina Wiseman, Director of Financial Aid. See Corrective Action Plan.
Federal Agency: U.S. Department of Education Pass-through Entity: None Federal Program: Student Financial Assistance Cluster (Federal Assistance Listing No.’s 84.007, 84.033, 84.038, 84.063, 84.268, 84.379) Requirement: Eligibility and Special Tests and Provisions Criteria: In accordance with 2 CFR 200.303, the College must establish and maintain effective internal control over the Federal awards to provide reasonable assurance the College is in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. The College must have systems in place that provide reasonable assurance that the information is accurate, allowable, and in compliance with the terms and conditions of the grant agreement. Volume 4 of the Federal Student Aid Handbook states a school must ensure that its administrative procedures for the FSA programs include an adequate system of internal controls. Effective internal control systems ensure the College is meeting its fiduciary responsibilities related to Title IV funds. Condition: Overrides for special circumstance requests and income verifications can be performed by any individual with access to the College’s financial aid packaging software without prior approval. Cause of Condition: An internal control over electronic data processing for software security is missing. Effect: Unauthorized overrides to student eligibility and income, which would affect the level of a student’s award. Questioned Costs: No questioned costs. Perspective Information: N/A Recommendation: Volume 4 of the Federal Student Aid Handbook states that electronic data processing controls should be in place to only allow individuals with special security classifications to make changes to the programs that determine student need and awards. The system should also be able to identify the individuals who make such changes. Due to the smaller size of the College and limited staff and resources, it is not feasible for the College to restrict security access. Thus, we recommend a review system be put in place prior to the entry of system overrides in the software system to ensure the override is properly authorized. Views of Responsible Official(s): The College implemented a policy where all special circumstance requests and income verification overrides must be reviewed by a second staff member effective September 2023. The second staff member reviews each override, either approves or denies the paperwork, then signs and dates the paperwork. The paperwork is returned to the first staff member to make the changes in PowerFAIDS. The responsible college official is Tina Wiseman, Director of Financial Aid. See Corrective Action Plan.
Federal Agency: U.S. Department of Education Pass-through Entity: None Federal Program: Student Financial Assistance Cluster (Federal Assistance Listing No.’s 84.007, 84.033, 84.038, 84.063, 84.268, 84.379) Requirement: Eligibility and Special Tests and Provisions Criteria: In accordance with 2 CFR 200.303, the College must establish and maintain effective internal control over the Federal awards to provide reasonable assurance the College is in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. The College must have systems in place that provide reasonable assurance that the information is accurate, allowable, and in compliance with the terms and conditions of the grant agreement. Volume 4 of the Federal Student Aid Handbook states a school must ensure that its administrative procedures for the FSA programs include an adequate system of internal controls. Effective internal control systems ensure the College is meeting its fiduciary responsibilities related to Title IV funds. Condition: Overrides for special circumstance requests and income verifications can be performed by any individual with access to the College’s financial aid packaging software without prior approval. Cause of Condition: An internal control over electronic data processing for software security is missing. Effect: Unauthorized overrides to student eligibility and income, which would affect the level of a student’s award. Questioned Costs: No questioned costs. Perspective Information: N/A Recommendation: Volume 4 of the Federal Student Aid Handbook states that electronic data processing controls should be in place to only allow individuals with special security classifications to make changes to the programs that determine student need and awards. The system should also be able to identify the individuals who make such changes. Due to the smaller size of the College and limited staff and resources, it is not feasible for the College to restrict security access. Thus, we recommend a review system be put in place prior to the entry of system overrides in the software system to ensure the override is properly authorized. Views of Responsible Official(s): The College implemented a policy where all special circumstance requests and income verification overrides must be reviewed by a second staff member effective September 2023. The second staff member reviews each override, either approves or denies the paperwork, then signs and dates the paperwork. The paperwork is returned to the first staff member to make the changes in PowerFAIDS. The responsible college official is Tina Wiseman, Director of Financial Aid. See Corrective Action Plan.
Federal Agency: U.S. Department of Education Pass-through Entity: None Federal Program: Student Financial Assistance Cluster (Federal Assistance Listing No.’s 84.007, 84.033, 84.038, 84.063, 84.268, 84.379) Requirement: Eligibility and Special Tests and Provisions Criteria: In accordance with 2 CFR 200.303, the College must establish and maintain effective internal control over the Federal awards to provide reasonable assurance the College is in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. The College must have systems in place that provide reasonable assurance that the information is accurate, allowable, and in compliance with the terms and conditions of the grant agreement. Volume 4 of the Federal Student Aid Handbook states a school must ensure that its administrative procedures for the FSA programs include an adequate system of internal controls. Effective internal control systems ensure the College is meeting its fiduciary responsibilities related to Title IV funds. Condition: Overrides for special circumstance requests and income verifications can be performed by any individual with access to the College’s financial aid packaging software without prior approval. Cause of Condition: An internal control over electronic data processing for software security is missing. Effect: Unauthorized overrides to student eligibility and income, which would affect the level of a student’s award. Questioned Costs: No questioned costs. Perspective Information: N/A Recommendation: Volume 4 of the Federal Student Aid Handbook states that electronic data processing controls should be in place to only allow individuals with special security classifications to make changes to the programs that determine student need and awards. The system should also be able to identify the individuals who make such changes. Due to the smaller size of the College and limited staff and resources, it is not feasible for the College to restrict security access. Thus, we recommend a review system be put in place prior to the entry of system overrides in the software system to ensure the override is properly authorized. Views of Responsible Official(s): The College implemented a policy where all special circumstance requests and income verification overrides must be reviewed by a second staff member effective September 2023. The second staff member reviews each override, either approves or denies the paperwork, then signs and dates the paperwork. The paperwork is returned to the first staff member to make the changes in PowerFAIDS. The responsible college official is Tina Wiseman, Director of Financial Aid. See Corrective Action Plan.
2023 – 002 Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.063, 84.268, 84.379, 84.033 Federal Award Identification Number: P007A221612 - 2023, P063P221506 - 2023, P268K231506 - 2023, P379T231506 - 2023, P033A221612 - 2023 Award Period: July 1, 2022 to June 30, 2023 Type of Finding: Compliance, Other Matter Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 682.610, states that institutions must report accurately the enrollment status of all students regardless of if they receive aid from the institution or not. Changes to said status are required to be reported within 30 days of becoming aware of the status change, or with the next scheduled transmission of statuses if the scheduled transmission is within 60 days. 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 enrollment reporting is completed properly. Condition: The University did not update student status change and enrollment effective date timely. Context: The enrollment effective date reported to the National Student Loan Database System (NSLDS) for one of the forty sampled students from the University was incorrect. Questioned costs: None Cause: The University did not timely or properly report student status change to NSLDS through their third-party servicer, National Student Clearinghouse (NSC). Effect: Failure to properly report enrollment status changes on NSLDS could affect the timing of the grace period for repayment of Title IV loans. Repeat finding: No Recommendation: CLA recommends that the University work with their third-party servicer and implement procedures to ensure that enrollment data, changes in status and effective dates within NSLDS are reported timely. Views of responsible officials: Management agrees with the finding and has developed a plan to correct the finding.