FINDING 2023-002 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 & 84.425W 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: During testing payroll disbursements charged to ESF grants, we noted: • One selection in a sample of 40 for which a time & effort report/semi-annual certification could not be provided. • One selection in a sample of 40 for which the time & effort report was not signed by a supervisory official. • Three selections in a sample of 40 for which the time & effort reports allocation to ESF varied from what was actually paid out of the ESF fund. • Three selections in a sample of 40 for which the time & effort reports did not explicitly state that the employee be charged 100% to ESF. Additionally, it was not clear the Teacher's tutor hours had been approved to be charged to the ESF grants. Additionally, we noted all of the nineteen vendor sample disbursements selected had no documented, secondary review of the voucher. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of controls to retain and track employe time and effort reports/certifications. We also recommend management make it explicitly clear as to who and how much stipends are to be 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: 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 & 84.425W 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: During testing payroll disbursements charged to ESF grants, we noted: • One selection in a sample of 40 for which a time & effort report/semi-annual certification could not be provided. • One selection in a sample of 40 for which the time & effort report was not signed by a supervisory official. • Three selections in a sample of 40 for which the time & effort reports allocation to ESF varied from what was actually paid out of the ESF fund. • Three selections in a sample of 40 for which the time & effort reports did not explicitly state that the employee be charged 100% to ESF. Additionally, it was not clear the Teacher's tutor hours had been approved to be charged to the ESF grants. Additionally, we noted all of the nineteen vendor sample disbursements selected had no documented, secondary review of the voucher. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of controls to retain and track employe time and effort reports/certifications. We also recommend management make it explicitly clear as to who and how much stipends are to be 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: 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 & 84.425W 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: During testing payroll disbursements charged to ESF grants, we noted: • One selection in a sample of 40 for which a time & effort report/semi-annual certification could not be provided. • One selection in a sample of 40 for which the time & effort report was not signed by a supervisory official. • Three selections in a sample of 40 for which the time & effort reports allocation to ESF varied from what was actually paid out of the ESF fund. • Three selections in a sample of 40 for which the time & effort reports did not explicitly state that the employee be charged 100% to ESF. Additionally, it was not clear the Teacher's tutor hours had been approved to be charged to the ESF grants. Additionally, we noted all of the nineteen vendor sample disbursements selected had no documented, secondary review of the voucher. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of controls to retain and track employe time and effort reports/certifications. We also recommend management make it explicitly clear as to who and how much stipends are to be 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: 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: 84.425D & 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) 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 $422,751 to install a HVAC system. The finding is isolated to the ESSER II (84.425D) and ESSER III grants (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 2023-003 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: 84.425D & 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) 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 $422,751 to install a HVAC system. The finding is isolated to the ESSER II (84.425D) and ESSER III grants (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 2023-003 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: 84.425D & 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) 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 $422,751 to install a HVAC system. The finding is isolated to the ESSER II (84.425D) and ESSER III grants (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 2023-003 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: 84.425D & 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) 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 $422,751 to install a HVAC system. The finding is isolated to the ESSER II (84.425D) and ESSER III grants (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 2023-003 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: 84.425D & 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) 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 $422,751 to install a HVAC system. The finding is isolated to the ESSER II (84.425D) and ESSER III grants (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 2023-003 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: 84.425D & 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) 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 $422,751 to install a HVAC system. The finding is isolated to the ESSER II (84.425D) and ESSER III grants (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 2023-003 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: 84.425D & 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) 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 $422,751 to install a HVAC system. The finding is isolated to the ESSER II (84.425D) and ESSER III grants (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.
2023-001: U.S. Department of Health and Human Services, Division of Child and Family Services System of Care for Youth with Serious Emotional Disorders, 93.104 Reporting Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards included under assistance listing 93.104 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control that provides reasonable assurance that the non-federal entity is managing the federal award in compliance federal statutes, regulations, and the terms and conditions of the Federal award. A key component of effective internal control is the segregation of duties through a review and approval process. Condition: Quarterly progress reports did not have evidence of review and approval by an individual independent of the preparation process. Cause: The Organization did not have adequate internal controls to ensure documented review of report. Effect: Documented review of the reports were not indicated. Questioned Costs: None reported. Context/sampling: A nonstatistical sample of two out of five quarterly progress reports were selected for testing. There was no evidence of review on either of the two reports tested. Report Finding from Prior Year(s): No. Recommendation: We recommend Community Chest, Inc. enhance the internal controls over reporting. Views of Responsible Officials: Community Chest, Inc. agrees with this finding; see corrective action plan.
U.S. Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medical Assistance Program (Medicaid; Title XIX) AL #: 93.778 Finding: 2023-006 Inaccurate Resources Entry SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Costs: Context: Effect: Identification of a repeat finding: Cause: Recommendation: Views of responsible officials and planned corrective actions: U.S. Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medical Assistance Program (Medicaid; Title XIX) AL #: 93.778 Finding: 2023-007 Inadequate Request for Information SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST and a participant could have been approved for benefits for which they were not eligible. Ineffective record keeping and ineffective case review process, incomplete documentation, and incorrect application of rules for purposes of determining eligibility. Files should be reviewed internally to ensure proper documentation is in place for eligibility. Workers should be retrained on what files should contain and the importance of complete and accurate record keeping. We recommend that all files include online verifications, documented resources of income and those amounts agree to information in NC FAST. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. The County agrees with the finding. See Corrective Action Plan in the following section. In accordance with 42 CFR 435, documentation must be obtained as needed to determine if a recipient meets specific standards, and documentation must be maintained to support eligibility determinations. Electronic matches are required at applications and redeterminations. There were 4 errors discovered during our procedures that inadequate information was requested at applications and/or redeterminations. In accordance with Medicaid Manual MA-2230, Medicaid for Aged, Blind and Disabled case records should contain documentation that verifications were done in preparation of the application and these items will agree to reports in the NC FAST system. In this process, the countable resources should be calculated correctly and agree back to the amounts in the NC FAST system. Any items discovered in the verification process should be considered countable or non-countable resources and explained within the documentation. There were 5 errors discovered during our procedures that resources in the county documentation and those same resources contained in NC FAST were not the same amounts or files containing resources were not properly documented to be considered countable or non-countable. There was no known affect to eligibility and there were no known questioned costs. We examined 60 cases from of a total of 754,993 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to re-determine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. Section III - Federal Award Findings and Questioned Costs (continued) This is a repeat finding from the immediate previous audit, 2022-007. Questioned Costs: Context: Effect: Identification of a repeat finding: Cause: Recommendation: Views of responsible officials and planned corrective actions: U.S. Department of Health and Human Services Passed through the NC Department of Health and Human Services Food and Nutrition Services (FNS) Cluster AL # 10.551 and 10.561 Finding: 2023-008 Inaccurate Information SIGNIFICANT DEFICENCY Eligibility Criteria: This is a repeat finding from the immediate previous audit, 2022-009. Ineffective record keeping and ineffective case review process, incomplete documentation, and incorrect application of rules for purposes of determining eligibility. Files should be reviewed internally to ensure proper documentation is in place for eligibility. Workers should be retrained on what files should contain and the importance of complete and accurate record keeping. We recommend that all files include online verifications, documented resources and income and those amounts agree to information in NC FAST. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. The County agrees with the finding. See Corrective Action Plan in the following section. There was no known affect to eligibility and there were no known questioned costs. For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST and applicants could have been approved for benefits for which they were not eligible. Section III - Federal Award Findings and Questioned Costs (continued) Per Section 200.303 of the Uniform Grant Guidance, 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. The State has provided policies and procedures to ensure that the County is meeting the federal guidance, relevant policies are: Food and Nutrition Services Policy 305 describes the verification sources and requirements and the FNS units primary responsibility for providing documentary evidence to support statements on applications and recertifications and procedures required if the statements by applicant/beneficiary are questionable. Food and Nutrition Services Policy 300 describes the sources of income countable and not countable to the household for determining financial eligibility. Food and Nutrition Services Policy 310 describes the procedures related to verifying changes in income (i.e. termination, end of contract, temporary, etc.). We examined 60 cases from of a total of 754,993 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to re-determine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit.
FINDING 2023-003 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 21611-062-PN01, 22611-062-PN01, 23611-062-PN01, 22611-062-ARP, 22619-062-PN01, 22619-062-ARP Compliance Requirement: Allowable Costs/Cost Principles Audit Finding: Material Weakness Condition and Context The Individuals with Disabilities Act (IDEA) Special Education - Grants to States program provides grant to states, and through them to Local Educational Agencies (i.e., the School Corporation), to assist them in providing special education and related services to eligible children with disabilities ages three to twenty-one. IDEA's Special Education - Preschool Grants program provides grants to states, and through them to Local Educational Agencies to assist them in providing special education and related services to children with disabilities ages three to five and, at the state's discretion, to two-year-old children with disabilities who will turn three during the school year. To receive reimbursement for special education expenses paid, the School Corporation's Treasurer completed a reimbursement request, and the Assistant Superintendent of Schools reviewed it. The documentation attached to the reimbursement request; however, did not have adequate detail to determine the payroll paid was in conformance with the applicable cost principes. Furthermore, payroll disbursements were posted by the Treasurer without a review to ensure the payee, amount, fund, and disbursement classification was accurate prior to disbursement. INDIANA STATE BOARD OF ACCOUNTS 19 RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause 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 control, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 21611-062-PN01, 22611-062-PN01, 23611-062-PN01, 22611-062-ARP, 22619-062-PN01, 22619-062-ARP Compliance Requirement: Allowable Costs/Cost Principles Audit Finding: Material Weakness Condition and Context The Individuals with Disabilities Act (IDEA) Special Education - Grants to States program provides grant to states, and through them to Local Educational Agencies (i.e., the School Corporation), to assist them in providing special education and related services to eligible children with disabilities ages three to twenty-one. IDEA's Special Education - Preschool Grants program provides grants to states, and through them to Local Educational Agencies to assist them in providing special education and related services to children with disabilities ages three to five and, at the state's discretion, to two-year-old children with disabilities who will turn three during the school year. To receive reimbursement for special education expenses paid, the School Corporation's Treasurer completed a reimbursement request, and the Assistant Superintendent of Schools reviewed it. The documentation attached to the reimbursement request; however, did not have adequate detail to determine the payroll paid was in conformance with the applicable cost principes. Furthermore, payroll disbursements were posted by the Treasurer without a review to ensure the payee, amount, fund, and disbursement classification was accurate prior to disbursement. INDIANA STATE BOARD OF ACCOUNTS 19 RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause 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 control, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 21611-062-PN01, 22611-062-PN01, 23611-062-PN01, 22611-062-ARP, 22619-062-PN01, 22619-062-ARP Compliance Requirement: Allowable Costs/Cost Principles Audit Finding: Material Weakness Condition and Context The Individuals with Disabilities Act (IDEA) Special Education - Grants to States program provides grant to states, and through them to Local Educational Agencies (i.e., the School Corporation), to assist them in providing special education and related services to eligible children with disabilities ages three to twenty-one. IDEA's Special Education - Preschool Grants program provides grants to states, and through them to Local Educational Agencies to assist them in providing special education and related services to children with disabilities ages three to five and, at the state's discretion, to two-year-old children with disabilities who will turn three during the school year. To receive reimbursement for special education expenses paid, the School Corporation's Treasurer completed a reimbursement request, and the Assistant Superintendent of Schools reviewed it. The documentation attached to the reimbursement request; however, did not have adequate detail to determine the payroll paid was in conformance with the applicable cost principes. Furthermore, payroll disbursements were posted by the Treasurer without a review to ensure the payee, amount, fund, and disbursement classification was accurate prior to disbursement. INDIANA STATE BOARD OF ACCOUNTS 19 RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause 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 control, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 21611-062-PN01, 22611-062-PN01, 23611-062-PN01, 22611-062-ARP, 22619-062-PN01, 22619-062-ARP Compliance Requirement: Allowable Costs/Cost Principles Audit Finding: Material Weakness Condition and Context The Individuals with Disabilities Act (IDEA) Special Education - Grants to States program provides grant to states, and through them to Local Educational Agencies (i.e., the School Corporation), to assist them in providing special education and related services to eligible children with disabilities ages three to twenty-one. IDEA's Special Education - Preschool Grants program provides grants to states, and through them to Local Educational Agencies to assist them in providing special education and related services to children with disabilities ages three to five and, at the state's discretion, to two-year-old children with disabilities who will turn three during the school year. To receive reimbursement for special education expenses paid, the School Corporation's Treasurer completed a reimbursement request, and the Assistant Superintendent of Schools reviewed it. The documentation attached to the reimbursement request; however, did not have adequate detail to determine the payroll paid was in conformance with the applicable cost principes. Furthermore, payroll disbursements were posted by the Treasurer without a review to ensure the payee, amount, fund, and disbursement classification was accurate prior to disbursement. INDIANA STATE BOARD OF ACCOUNTS 19 RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause 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 control, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 21611-062-PN01, 22611-062-PN01, 23611-062-PN01, 22611-062-ARP, 22619-062-PN01, 22619-062-ARP Compliance Requirement: Allowable Costs/Cost Principles Audit Finding: Material Weakness Condition and Context The Individuals with Disabilities Act (IDEA) Special Education - Grants to States program provides grant to states, and through them to Local Educational Agencies (i.e., the School Corporation), to assist them in providing special education and related services to eligible children with disabilities ages three to twenty-one. IDEA's Special Education - Preschool Grants program provides grants to states, and through them to Local Educational Agencies to assist them in providing special education and related services to children with disabilities ages three to five and, at the state's discretion, to two-year-old children with disabilities who will turn three during the school year. To receive reimbursement for special education expenses paid, the School Corporation's Treasurer completed a reimbursement request, and the Assistant Superintendent of Schools reviewed it. The documentation attached to the reimbursement request; however, did not have adequate detail to determine the payroll paid was in conformance with the applicable cost principes. Furthermore, payroll disbursements were posted by the Treasurer without a review to ensure the payee, amount, fund, and disbursement classification was accurate prior to disbursement. INDIANA STATE BOARD OF ACCOUNTS 19 RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause 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 control, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 21611-062-PN01, 22611-062-PN01, 23611-062-PN01, 22611-062-ARP, 22619-062-PN01, 22619-062-ARP Compliance Requirement: Allowable Costs/Cost Principles Audit Finding: Material Weakness Condition and Context The Individuals with Disabilities Act (IDEA) Special Education - Grants to States program provides grant to states, and through them to Local Educational Agencies (i.e., the School Corporation), to assist them in providing special education and related services to eligible children with disabilities ages three to twenty-one. IDEA's Special Education - Preschool Grants program provides grants to states, and through them to Local Educational Agencies to assist them in providing special education and related services to children with disabilities ages three to five and, at the state's discretion, to two-year-old children with disabilities who will turn three during the school year. To receive reimbursement for special education expenses paid, the School Corporation's Treasurer completed a reimbursement request, and the Assistant Superintendent of Schools reviewed it. The documentation attached to the reimbursement request; however, did not have adequate detail to determine the payroll paid was in conformance with the applicable cost principes. Furthermore, payroll disbursements were posted by the Treasurer without a review to ensure the payee, amount, fund, and disbursement classification was accurate prior to disbursement. INDIANA STATE BOARD OF ACCOUNTS 19 RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause 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 control, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 21611-062-PN01, 22611-062-PN01, 23611-062-PN01, 22611-062-ARP, 22619-062-PN01, 22619-062-ARP Compliance Requirement: Allowable Costs/Cost Principles Audit Finding: Material Weakness Condition and Context The Individuals with Disabilities Act (IDEA) Special Education - Grants to States program provides grant to states, and through them to Local Educational Agencies (i.e., the School Corporation), to assist them in providing special education and related services to eligible children with disabilities ages three to twenty-one. IDEA's Special Education - Preschool Grants program provides grants to states, and through them to Local Educational Agencies to assist them in providing special education and related services to children with disabilities ages three to five and, at the state's discretion, to two-year-old children with disabilities who will turn three during the school year. To receive reimbursement for special education expenses paid, the School Corporation's Treasurer completed a reimbursement request, and the Assistant Superintendent of Schools reviewed it. The documentation attached to the reimbursement request; however, did not have adequate detail to determine the payroll paid was in conformance with the applicable cost principes. Furthermore, payroll disbursements were posted by the Treasurer without a review to ensure the payee, amount, fund, and disbursement classification was accurate prior to disbursement. INDIANA STATE BOARD OF ACCOUNTS 19 RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause 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 control, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Finding: Material Weakness Condition and Context The Elementary and Secondary School Emergency Relief (ESSER) Fund provided funding to states and school districts to help safely reopen and sustain the safe operation of schools and to address the impact of the coronavirus pandemic on the nation's students. States were required to subgrant a portion of their ARP ESSER allocation to Local Educational Agencies (LEA). Prior to the LEAs receiving their respective subgrants, the LEAs were required to complete an application for ARP ESSER funding, which was submitted to the Indiana Department of Education, the pass-through entity for approval. The application included a district level budget identifying how the LEA intended to spend program funds. To receive reimbursement for ESSER expenses paid, the Treasurer completed a reimbursement request, and the Assistant Superintendent of Schools reviewed it. The documentation attached to the reimbursement request, however, did not have adequate detail to determine the payroll paid was in conformance with the applicable cost principes. Furthermore, payroll disbursements were posted by the Treasurer without a review to ensure the payee, amount, fund, and disbursement classification was accurate prior to disbursement. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause 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 control, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 21 RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Finding: Material Weakness Condition and Context The Elementary and Secondary School Emergency Relief (ESSER) Fund provided funding to states and school districts to help safely reopen and sustain the safe operation of schools and to address the impact of the coronavirus pandemic on the nation's students. States were required to subgrant a portion of their ARP ESSER allocation to Local Educational Agencies (LEA). Prior to the LEAs receiving their respective subgrants, the LEAs were required to complete an application for ARP ESSER funding, which was submitted to the Indiana Department of Education, the pass-through entity for approval. The application included a district level budget identifying how the LEA intended to spend program funds. To receive reimbursement for ESSER expenses paid, the Treasurer completed a reimbursement request, and the Assistant Superintendent of Schools reviewed it. The documentation attached to the reimbursement request, however, did not have adequate detail to determine the payroll paid was in conformance with the applicable cost principes. Furthermore, payroll disbursements were posted by the Treasurer without a review to ensure the payee, amount, fund, and disbursement classification was accurate prior to disbursement. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause 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 control, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 21 RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Finding: Material Weakness Condition and Context The Elementary and Secondary School Emergency Relief (ESSER) Fund provided funding to states and school districts to help safely reopen and sustain the safe operation of schools and to address the impact of the coronavirus pandemic on the nation's students. States were required to subgrant a portion of their ARP ESSER allocation to Local Educational Agencies (LEA). Prior to the LEAs receiving their respective subgrants, the LEAs were required to complete an application for ARP ESSER funding, which was submitted to the Indiana Department of Education, the pass-through entity for approval. The application included a district level budget identifying how the LEA intended to spend program funds. To receive reimbursement for ESSER expenses paid, the Treasurer completed a reimbursement request, and the Assistant Superintendent of Schools reviewed it. The documentation attached to the reimbursement request, however, did not have adequate detail to determine the payroll paid was in conformance with the applicable cost principes. Furthermore, payroll disbursements were posted by the Treasurer without a review to ensure the payee, amount, fund, and disbursement classification was accurate prior to disbursement. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause 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 control, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 21 RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Finding: Material Weakness Condition and Context The Elementary and Secondary School Emergency Relief (ESSER) Fund provided funding to states and school districts to help safely reopen and sustain the safe operation of schools and to address the impact of the coronavirus pandemic on the nation's students. States were required to subgrant a portion of their ARP ESSER allocation to Local Educational Agencies (LEA). Prior to the LEAs receiving their respective subgrants, the LEAs were required to complete an application for ARP ESSER funding, which was submitted to the Indiana Department of Education, the pass-through entity for approval. The application included a district level budget identifying how the LEA intended to spend program funds. To receive reimbursement for ESSER expenses paid, the Treasurer completed a reimbursement request, and the Assistant Superintendent of Schools reviewed it. The documentation attached to the reimbursement request, however, did not have adequate detail to determine the payroll paid was in conformance with the applicable cost principes. Furthermore, payroll disbursements were posted by the Treasurer without a review to ensure the payee, amount, fund, and disbursement classification was accurate prior to disbursement. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause 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 control, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 21 RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were compiled, prepared, and submitted by the Assistant Superintendent of Schools and reviewed by the Treasurer prior to submission. However, this review process was not effective and did not detect and allow correction of errors prior to submission. All six of the submitted reports were selected for testing. Four of the reports, ESSER I, Year 2; ESSER II, Year 1; ESSER II, Year 2; and ESSER III, Year 2, were not supported by the School Corporation's records. The financial information provided did not agree to the data submitted in the reports; therefore, we could not determine the accuracy of the reports. 22 INDIANA STATE BOARD OF ACCOUNTS RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the four reports identified above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause A proper system of internal controls was not designed by management of the School Corporation. 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. 23 INDIANA STATE BOARD OF ACCOUNTS RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, reports submitted to the IDOE were not supported by the School Corporation's underlying accounting records. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure reports are supported by the ledgers or reports used to complete the report. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were compiled, prepared, and submitted by the Assistant Superintendent of Schools and reviewed by the Treasurer prior to submission. However, this review process was not effective and did not detect and allow correction of errors prior to submission. All six of the submitted reports were selected for testing. Four of the reports, ESSER I, Year 2; ESSER II, Year 1; ESSER II, Year 2; and ESSER III, Year 2, were not supported by the School Corporation's records. The financial information provided did not agree to the data submitted in the reports; therefore, we could not determine the accuracy of the reports. 22 INDIANA STATE BOARD OF ACCOUNTS RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the four reports identified above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause A proper system of internal controls was not designed by management of the School Corporation. 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. 23 INDIANA STATE BOARD OF ACCOUNTS RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, reports submitted to the IDOE were not supported by the School Corporation's underlying accounting records. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure reports are supported by the ledgers or reports used to complete the report. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were compiled, prepared, and submitted by the Assistant Superintendent of Schools and reviewed by the Treasurer prior to submission. However, this review process was not effective and did not detect and allow correction of errors prior to submission. All six of the submitted reports were selected for testing. Four of the reports, ESSER I, Year 2; ESSER II, Year 1; ESSER II, Year 2; and ESSER III, Year 2, were not supported by the School Corporation's records. The financial information provided did not agree to the data submitted in the reports; therefore, we could not determine the accuracy of the reports. 22 INDIANA STATE BOARD OF ACCOUNTS RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the four reports identified above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause A proper system of internal controls was not designed by management of the School Corporation. 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. 23 INDIANA STATE BOARD OF ACCOUNTS RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, reports submitted to the IDOE were not supported by the School Corporation's underlying accounting records. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure reports are supported by the ledgers or reports used to complete the report. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were compiled, prepared, and submitted by the Assistant Superintendent of Schools and reviewed by the Treasurer prior to submission. However, this review process was not effective and did not detect and allow correction of errors prior to submission. All six of the submitted reports were selected for testing. Four of the reports, ESSER I, Year 2; ESSER II, Year 1; ESSER II, Year 2; and ESSER III, Year 2, were not supported by the School Corporation's records. The financial information provided did not agree to the data submitted in the reports; therefore, we could not determine the accuracy of the reports. 22 INDIANA STATE BOARD OF ACCOUNTS RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the four reports identified above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause A proper system of internal controls was not designed by management of the School Corporation. 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. 23 INDIANA STATE BOARD OF ACCOUNTS RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, reports submitted to the IDOE were not supported by the School Corporation's underlying accounting records. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure reports are supported by the ledgers or reports used to complete the report. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were compiled, prepared, and submitted by the Assistant Superintendent of Schools and reviewed by the Treasurer prior to submission. However, this review process was not effective and did not detect and allow correction of errors prior to submission. All six of the submitted reports were selected for testing. Four of the reports, ESSER I, Year 2; ESSER II, Year 1; ESSER II, Year 2; and ESSER III, Year 2, were not supported by the School Corporation's records. The financial information provided did not agree to the data submitted in the reports; therefore, we could not determine the accuracy of the reports. 22 INDIANA STATE BOARD OF ACCOUNTS RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the four reports identified above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause A proper system of internal controls was not designed by management of the School Corporation. 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. 23 INDIANA STATE BOARD OF ACCOUNTS RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, reports submitted to the IDOE were not supported by the School Corporation's underlying accounting records. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure reports are supported by the ledgers or reports used to complete the report. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports. The annual data reports were compiled, prepared, and submitted by the Assistant Superintendent of Schools and reviewed by the Treasurer prior to submission. However, this review process was not effective and did not detect and allow correction of errors prior to submission. All six of the submitted reports were selected for testing. Four of the reports, ESSER I, Year 2; ESSER II, Year 1; ESSER II, Year 2; and ESSER III, Year 2, were not supported by the School Corporation's records. The financial information provided did not agree to the data submitted in the reports; therefore, we could not determine the accuracy of the reports. 22 INDIANA STATE BOARD OF ACCOUNTS RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the four reports identified above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause A proper system of internal controls was not designed by management of the School Corporation. 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. 23 INDIANA STATE BOARD OF ACCOUNTS RANDOLPH CENTRAL SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, reports submitted to the IDOE were not supported by the School Corporation's underlying accounting records. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure reports are supported by the ledgers or reports used to complete the report. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Reference Number: 2023-001 Prior Year Finding: No Federal Agency: Pass-Through Agency: U.S. Department of Homeland Security Government of the District of Columbia Homeland Security and Emergency Management Agency Federal Program: Securing the Cities Program Assistance Listing Number: 97.106 Award Number and Year: 17STC117-02, 20STC117-01 (9/1/2021-8/31/2023) Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: Compliance: 2 CFR 200.214 Suspension and Debarment restricts 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 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with 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: MWCOG did not determine the suspension and debarment status of vendors with expenditures exceeding $25,000 as required by federal regulations. Context: The suspension and debarment status for 2 of 2 vendors was not documented. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: MWCOG’s internal controls over suspension and debarment are not sufficient to ensure that all vendors’ suspension and debarment status is documented. Effect: Failure to verify and document the suspension and debarment status of vendors may result in MWCOG issuing payments to vendors that are suspended or debarred and not authorized to provide services under the program. Recommendation: MWCOG should ensure policies and procedures include the three options for determining suspension and debarment status listed in 2 CFR 180.300 and that controls are sufficient to ensure that the suspension and debarment status is verified for all vendors. Views of responsible officials: MWCOG will ensure that all vendors’ suspension and debarment status be documented in the procurement files at the time of contract with the vendors.
Reference Number: 2023-001 Prior Year Finding: No Federal Agency: Pass-Through Agency: U.S. Department of Homeland Security Government of the District of Columbia Homeland Security and Emergency Management Agency Federal Program: Securing the Cities Program Assistance Listing Number: 97.106 Award Number and Year: 17STC117-02, 20STC117-01 (9/1/2021-8/31/2023) Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: Compliance: 2 CFR 200.214 Suspension and Debarment restricts 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 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with 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: MWCOG did not determine the suspension and debarment status of vendors with expenditures exceeding $25,000 as required by federal regulations. Context: The suspension and debarment status for 2 of 2 vendors was not documented. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: MWCOG’s internal controls over suspension and debarment are not sufficient to ensure that all vendors’ suspension and debarment status is documented. Effect: Failure to verify and document the suspension and debarment status of vendors may result in MWCOG issuing payments to vendors that are suspended or debarred and not authorized to provide services under the program. Recommendation: MWCOG should ensure policies and procedures include the three options for determining suspension and debarment status listed in 2 CFR 180.300 and that controls are sufficient to ensure that the suspension and debarment status is verified for all vendors. Views of responsible officials: MWCOG will ensure that all vendors’ suspension and debarment status be documented in the procurement files at the time of contract with the vendors.
Federal Agency: U.S. Department of Homeland Security Program/Cluster: Staffing for Adequate Fire & Emergency Response Federal Assistance Listing Number: 97.083 Pass-through: N/A Award No. and Year: EMW-2020-FF-00816, 2020 Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Per 2 CFR 200.303, 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. This includes internal controls over maintaining records of the preparer and approver of required reports. Condition: We identified four (4) instances in which the City did not retain evidence to document the individual who reviewed the required reports prior to submission. This consisted of two (2) financial reports and two (2) performance reports. Cause: The City’s procedures did not include documenting the review of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted to the granting agency. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: All semi-annual financial reports and semi-annual performance report were selected for testing. The population consisted of two (2) financial reports and two (2) performance reports. All reports were selected for testwork. Repeat Finding from Prior Year(s): No. Recommendation: We recommend that the City revise its procedures to include evidence to document the individual who reviewed required reports prior to submission. Views of Responsible Officials: Management concurs with the finding. See separate corrective action plan.
Federal Agency: U.S. Department of Transportation Program/Cluster: Highway Planning and Construction Federal Assistance Listing Number: 20.205 Pass-through: California Department of Transportation Award No. and Year: STPCML-5132 (049) – 2022 and HSIPL-5132 (52) - 2022 Compliance Requirement: Special Tests and Provisions – Wage Rate Requirements Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: Per 2 CFR 200.303, 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. This includes internal controls over maintaining records of the receipt and review of certified payrolls. Condition: We identified eleven (11) instances in which the City did not retain evidence to document the individual who reviewed the certified payroll for each week in which work was performed by construction contractors. Cause: The City’s procedures did not include documenting the review of the certified payroll received. Effect: Ineffective controls over this area of compliance could result in noncompliance with the wage rate compliance requirements. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The population consisted of 104 certified payrolls required during the fiscal year. A sample of eleven (11) were selected for testwork. Repeat Finding from Prior Year(s): No. Recommendation: The City should establish controls to ensure there are procedures in place requiring the documented review of the certified payroll submitted by the construction contractors. Views of Responsible Officials: Management concurs with the finding. See separate corrective action plan.
Federal Agency: U.S. Department of Transportation Program/Cluster: Highway Planning and Construction Federal Assistance Listing Number: 20.205 Pass-through: California Department of Transportation Award No. and Year: STPCML-5132 (049) – 2022 and HSIPL-5132 (52) - 2022 Compliance Requirement: Special Tests and Provisions – Wage Rate Requirements Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: Per 2 CFR 200.303, 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. This includes internal controls over maintaining records of the receipt and review of certified payrolls. Condition: We identified eleven (11) instances in which the City did not retain evidence to document the individual who reviewed the certified payroll for each week in which work was performed by construction contractors. Cause: The City’s procedures did not include documenting the review of the certified payroll received. Effect: Ineffective controls over this area of compliance could result in noncompliance with the wage rate compliance requirements. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The population consisted of 104 certified payrolls required during the fiscal year. A sample of eleven (11) were selected for testwork. Repeat Finding from Prior Year(s): No. Recommendation: The City should establish controls to ensure there are procedures in place requiring the documented review of the certified payroll submitted by the construction contractors. Views of Responsible Officials: Management concurs with the finding. See separate corrective action plan.
Federal Agency: U.S. Department of Transportation Program/Cluster: Highway Planning and Construction Federal Assistance Listing Number: 20.205 Pass-through: California Department of Transportation Award No. and Year: STPCML-5132 (049) – 2022 and HSIPL-5132 (52) - 2022 Compliance Requirement: Special Tests and Provisions – Wage Rate Requirements Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: Per 2 CFR 200.303, 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. This includes internal controls over maintaining records of the receipt and review of certified payrolls. Condition: We identified eleven (11) instances in which the City did not retain evidence to document the individual who reviewed the certified payroll for each week in which work was performed by construction contractors. Cause: The City’s procedures did not include documenting the review of the certified payroll received. Effect: Ineffective controls over this area of compliance could result in noncompliance with the wage rate compliance requirements. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The population consisted of 104 certified payrolls required during the fiscal year. A sample of eleven (11) were selected for testwork. Repeat Finding from Prior Year(s): No. Recommendation: The City should establish controls to ensure there are procedures in place requiring the documented review of the certified payroll submitted by the construction contractors. Views of Responsible Officials: Management concurs with the finding. See separate corrective action plan.
Federal Agency: U.S. Department of Transportation Program/Cluster: Highway Planning and Construction Federal Assistance Listing Number: 20.205 Pass-through: California Department of Transportation Award No. and Year: STPCML-5132 (049) – 2022 and HSIPL-5132 (52) - 2022 Compliance Requirement: Special Tests and Provisions – Wage Rate Requirements Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: Per 2 CFR 200.303, 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. This includes internal controls over maintaining records of the receipt and review of certified payrolls. Condition: We identified eleven (11) instances in which the City did not retain evidence to document the individual who reviewed the certified payroll for each week in which work was performed by construction contractors. Cause: The City’s procedures did not include documenting the review of the certified payroll received. Effect: Ineffective controls over this area of compliance could result in noncompliance with the wage rate compliance requirements. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The population consisted of 104 certified payrolls required during the fiscal year. A sample of eleven (11) were selected for testwork. Repeat Finding from Prior Year(s): No. Recommendation: The City should establish controls to ensure there are procedures in place requiring the documented review of the certified payroll submitted by the construction contractors. Views of Responsible Officials: Management concurs with the finding. See separate corrective action plan.
Federal Agency: U.S. Department of Housing and Urban Development Program/Cluster: Section 8 Housing Choice Vouchers Cluster Federal Assistance Listing Number: 14.871 Pass-through: N/A Award No. and Year: CA065 - 2023 Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Per 2 CFR 200.303, 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. This includes internal controls over maintaining records of the preparer and approver of required reports. Condition: We identified three (3) instances in which the City did not retain evidence to document the individual who reviewed the Voucher Management System (VMS) reports prior to submission. The City implemented a documented review process starting with the April 2023 VMS report submission. The City did not document their review of the VMS reports prior to submission prior to April 2023. Cause: The City’s internal controls did not include documenting the separate management review of the VMS reports prior to submission. We noted the City implemented a change in internal controls starting with the April 2023 report whereby the reports are reviewed and approved by an employee separate from the preparer of the VMS reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted to the granting agency. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The population consists of twelve (12) monthly VMS reports. The sample consisted of four (4) monthly VMS reports. Repeat Finding from Prior Year(s): No. Recommendation: We recommend that the City revise its procedures to include evidence to document the individual who reviewed required reports prior to submission. Views of Responsible Officials: Management concurs with the finding. See separate corrective action plan.
Federal Agency: U.S. Department of Housing and Urban Development Program/Cluster: Section 8 Housing Choice Vouchers Cluster Federal Assistance Listing Number: 14.871 Pass-through: N/A Award No. and Year: CA065 - 2023 Compliance Requirement: Special Tests and Provisions – Utility Allowance Schedule Type of Finding: Instance of Non-Compliance and Material Weakness in Internal Control over Compliance Criteria: Per 2 CFR 200.303, 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. This includes internal controls over maintaining records of the review and approval of the utility allowance schedule. Per the 2023 Compliance Supplement, the public housing authority (PHA) must maintain an up-to-date utility allowance schedule. The PHA must review utility rate data for each utility category each year and must adjust its utility allowance schedule if there has been a rate change of 10 percent or more for a utility category or fuel type since the last time the utility allowance schedule was revised (24 CFR section 982.517). The PHA’s Housing Choice Voucher (HCV) Administrative Plan states that the PHA must maintain information supporting its annual review of utility allowance and any revisions made in its utility allowance schedule. Condition: We identified that management did not document their annual review and acceptance of the changes to the utility allowance schedules in effect during the fiscal year 2023. Management asserted that the revisions to the utility allowance schedule are not required to be submitted to the PHA board for approval; however, the HCV Administrative Plan does not delegate the authority to management to approve changes to the utility allowance schedule. Cause: The City PHA did not follow its policy to maintain information evidencing its review of revisions to the utility allowance schedule. Effect: The City did not comply with the utility allowance schedule requirements. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The City utilized two utility allowance schedules in the fiscal year 2023. The rates were revised January 1, 2022, and January 1, 2023. Repeat Finding from Prior Year(s): No. Recommendation: We recommend that the City follow its policy to maintain information supporting its annual review of the utility allowance schedule. Views of Responsible Officials: Management concurs with the finding. See separate corrective action plan.
FINDING 2023-001 - RISK ASSESSMENT PROCESS RELATED TO COMPLIANCE REQUIREMENTS (Repeat Finding of 2022-001) Material Weakness Federal Programs: Charter Schools – Assistance Listing Number 84.282; Education Stabilization Fund – Assistance Listing Number 84.425 Repeat Finding: This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-001. Criteria 2 CFR 200.303 includes requirements related to internal controls for federal award programs, including that the Organization must, among other things, “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 Unites States of the “Internal control Integrated Framework:, issued by the Committee of Sponsoring Organization of the Treadway Commission (COSO)”. Condition The Organization has not established a formal process related to federal awards to identify all key compliance requirements and changes in compliance requirements, evaluate risks of noncompliance with these requirements, and respond to such risks of noncompliance through establishing or changing processes and internal controls. The Organization also implements the use of federal funds through different departments. Certain individuals, within a department, responsible for the use of federal funds or maintenance and safeguard of assets acquired with federal funds lacked knowledge of the compliance requirements pertaining to the use of the funds or the maintenance and safeguard of the acquired assets. Cause and Effect The material weakness resulted in the noncompliance findings described in items 2023-002 and 2023-003. Recommendation We recommend additional resources be allocated to federal award compliance to review federal award provisions and requirements, evaluate risks of noncompliance, and respond to such risks through internal controls. The process should include methods to identify and communicate changes to federal award requirements to all key individuals within the Organization and to verify internal controls are implemented correctly and are operating effectively. Views of Responsible Officials and Planned Corrective Actions The Organization’s Corrective Action Plan is included on pages 43 and 44.
FINDING 2023-001 - RISK ASSESSMENT PROCESS RELATED TO COMPLIANCE REQUIREMENTS (Repeat Finding of 2022-001) Material Weakness Federal Programs: Charter Schools – Assistance Listing Number 84.282; Education Stabilization Fund – Assistance Listing Number 84.425 Repeat Finding: This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-001. Criteria 2 CFR 200.303 includes requirements related to internal controls for federal award programs, including that the Organization must, among other things, “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 Unites States of the “Internal control Integrated Framework:, issued by the Committee of Sponsoring Organization of the Treadway Commission (COSO)”. Condition The Organization has not established a formal process related to federal awards to identify all key compliance requirements and changes in compliance requirements, evaluate risks of noncompliance with these requirements, and respond to such risks of noncompliance through establishing or changing processes and internal controls. The Organization also implements the use of federal funds through different departments. Certain individuals, within a department, responsible for the use of federal funds or maintenance and safeguard of assets acquired with federal funds lacked knowledge of the compliance requirements pertaining to the use of the funds or the maintenance and safeguard of the acquired assets. Cause and Effect The material weakness resulted in the noncompliance findings described in items 2023-002 and 2023-003. Recommendation We recommend additional resources be allocated to federal award compliance to review federal award provisions and requirements, evaluate risks of noncompliance, and respond to such risks through internal controls. The process should include methods to identify and communicate changes to federal award requirements to all key individuals within the Organization and to verify internal controls are implemented correctly and are operating effectively. Views of Responsible Officials and Planned Corrective Actions The Organization’s Corrective Action Plan is included on pages 43 and 44.
FINDING 2023-001 - RISK ASSESSMENT PROCESS RELATED TO COMPLIANCE REQUIREMENTS (Repeat Finding of 2022-001) Material Weakness Federal Programs: Charter Schools – Assistance Listing Number 84.282; Education Stabilization Fund – Assistance Listing Number 84.425 Repeat Finding: This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-001. Criteria 2 CFR 200.303 includes requirements related to internal controls for federal award programs, including that the Organization must, among other things, “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 Unites States of the “Internal control Integrated Framework:, issued by the Committee of Sponsoring Organization of the Treadway Commission (COSO)”. Condition The Organization has not established a formal process related to federal awards to identify all key compliance requirements and changes in compliance requirements, evaluate risks of noncompliance with these requirements, and respond to such risks of noncompliance through establishing or changing processes and internal controls. The Organization also implements the use of federal funds through different departments. Certain individuals, within a department, responsible for the use of federal funds or maintenance and safeguard of assets acquired with federal funds lacked knowledge of the compliance requirements pertaining to the use of the funds or the maintenance and safeguard of the acquired assets. Cause and Effect The material weakness resulted in the noncompliance findings described in items 2023-002 and 2023-003. Recommendation We recommend additional resources be allocated to federal award compliance to review federal award provisions and requirements, evaluate risks of noncompliance, and respond to such risks through internal controls. The process should include methods to identify and communicate changes to federal award requirements to all key individuals within the Organization and to verify internal controls are implemented correctly and are operating effectively. Views of Responsible Officials and Planned Corrective Actions The Organization’s Corrective Action Plan is included on pages 43 and 44.
FINDING 2023-001 - RISK ASSESSMENT PROCESS RELATED TO COMPLIANCE REQUIREMENTS (Repeat Finding of 2022-001) Material Weakness Federal Programs: Charter Schools – Assistance Listing Number 84.282; Education Stabilization Fund – Assistance Listing Number 84.425 Repeat Finding: This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-001. Criteria 2 CFR 200.303 includes requirements related to internal controls for federal award programs, including that the Organization must, among other things, “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 Unites States of the “Internal control Integrated Framework:, issued by the Committee of Sponsoring Organization of the Treadway Commission (COSO)”. Condition The Organization has not established a formal process related to federal awards to identify all key compliance requirements and changes in compliance requirements, evaluate risks of noncompliance with these requirements, and respond to such risks of noncompliance through establishing or changing processes and internal controls. The Organization also implements the use of federal funds through different departments. Certain individuals, within a department, responsible for the use of federal funds or maintenance and safeguard of assets acquired with federal funds lacked knowledge of the compliance requirements pertaining to the use of the funds or the maintenance and safeguard of the acquired assets. Cause and Effect The material weakness resulted in the noncompliance findings described in items 2023-002 and 2023-003. Recommendation We recommend additional resources be allocated to federal award compliance to review federal award provisions and requirements, evaluate risks of noncompliance, and respond to such risks through internal controls. The process should include methods to identify and communicate changes to federal award requirements to all key individuals within the Organization and to verify internal controls are implemented correctly and are operating effectively. Views of Responsible Officials and Planned Corrective Actions The Organization’s Corrective Action Plan is included on pages 43 and 44.
FINDING 2023-001 - RISK ASSESSMENT PROCESS RELATED TO COMPLIANCE REQUIREMENTS (Repeat Finding of 2022-001) Material Weakness Federal Programs: Charter Schools – Assistance Listing Number 84.282; Education Stabilization Fund – Assistance Listing Number 84.425 Repeat Finding: This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-001. Criteria 2 CFR 200.303 includes requirements related to internal controls for federal award programs, including that the Organization must, among other things, “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 Unites States of the “Internal control Integrated Framework:, issued by the Committee of Sponsoring Organization of the Treadway Commission (COSO)”. Condition The Organization has not established a formal process related to federal awards to identify all key compliance requirements and changes in compliance requirements, evaluate risks of noncompliance with these requirements, and respond to such risks of noncompliance through establishing or changing processes and internal controls. The Organization also implements the use of federal funds through different departments. Certain individuals, within a department, responsible for the use of federal funds or maintenance and safeguard of assets acquired with federal funds lacked knowledge of the compliance requirements pertaining to the use of the funds or the maintenance and safeguard of the acquired assets. Cause and Effect The material weakness resulted in the noncompliance findings described in items 2023-002 and 2023-003. Recommendation We recommend additional resources be allocated to federal award compliance to review federal award provisions and requirements, evaluate risks of noncompliance, and respond to such risks through internal controls. The process should include methods to identify and communicate changes to federal award requirements to all key individuals within the Organization and to verify internal controls are implemented correctly and are operating effectively. Views of Responsible Officials and Planned Corrective Actions The Organization’s Corrective Action Plan is included on pages 43 and 44.
FINDING 2023-001 - RISK ASSESSMENT PROCESS RELATED TO COMPLIANCE REQUIREMENTS (Repeat Finding of 2022-001) Material Weakness Federal Programs: Charter Schools – Assistance Listing Number 84.282; Education Stabilization Fund – Assistance Listing Number 84.425 Repeat Finding: This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-001. Criteria 2 CFR 200.303 includes requirements related to internal controls for federal award programs, including that the Organization must, among other things, “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 Unites States of the “Internal control Integrated Framework:, issued by the Committee of Sponsoring Organization of the Treadway Commission (COSO)”. Condition The Organization has not established a formal process related to federal awards to identify all key compliance requirements and changes in compliance requirements, evaluate risks of noncompliance with these requirements, and respond to such risks of noncompliance through establishing or changing processes and internal controls. The Organization also implements the use of federal funds through different departments. Certain individuals, within a department, responsible for the use of federal funds or maintenance and safeguard of assets acquired with federal funds lacked knowledge of the compliance requirements pertaining to the use of the funds or the maintenance and safeguard of the acquired assets. Cause and Effect The material weakness resulted in the noncompliance findings described in items 2023-002 and 2023-003. Recommendation We recommend additional resources be allocated to federal award compliance to review federal award provisions and requirements, evaluate risks of noncompliance, and respond to such risks through internal controls. The process should include methods to identify and communicate changes to federal award requirements to all key individuals within the Organization and to verify internal controls are implemented correctly and are operating effectively. Views of Responsible Officials and Planned Corrective Actions The Organization’s Corrective Action Plan is included on pages 43 and 44.
FINDING 2023-001 - RISK ASSESSMENT PROCESS RELATED TO COMPLIANCE REQUIREMENTS (Repeat Finding of 2022-001) Material Weakness Federal Programs: Charter Schools – Assistance Listing Number 84.282; Education Stabilization Fund – Assistance Listing Number 84.425 Repeat Finding: This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-001. Criteria 2 CFR 200.303 includes requirements related to internal controls for federal award programs, including that the Organization must, among other things, “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 Unites States of the “Internal control Integrated Framework:, issued by the Committee of Sponsoring Organization of the Treadway Commission (COSO)”. Condition The Organization has not established a formal process related to federal awards to identify all key compliance requirements and changes in compliance requirements, evaluate risks of noncompliance with these requirements, and respond to such risks of noncompliance through establishing or changing processes and internal controls. The Organization also implements the use of federal funds through different departments. Certain individuals, within a department, responsible for the use of federal funds or maintenance and safeguard of assets acquired with federal funds lacked knowledge of the compliance requirements pertaining to the use of the funds or the maintenance and safeguard of the acquired assets. Cause and Effect The material weakness resulted in the noncompliance findings described in items 2023-002 and 2023-003. Recommendation We recommend additional resources be allocated to federal award compliance to review federal award provisions and requirements, evaluate risks of noncompliance, and respond to such risks through internal controls. The process should include methods to identify and communicate changes to federal award requirements to all key individuals within the Organization and to verify internal controls are implemented correctly and are operating effectively. Views of Responsible Officials and Planned Corrective Actions The Organization’s Corrective Action Plan is included on pages 43 and 44.
Finding 2023 - 003 Allowable Costs - Native Hawaiian Education – Assistance Listing 84.362A Criteria: 2 CFR 200.303(a) requires the non-Federal entity to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During testing of controls over credit card expenditures funded by the Native Hawaiian Education Grant, we noted out of a population of 119 transactions, the School was unable to provide sufficient documentation to substantiate 33 of the transactions. The total population tested was $47,581 and the amount of items unsubstantiated was $3,827. Context and Cause of Condition: Due to turnover at the School, there was a lack of controls that would normally require sufficient documentation for all expenses incurred by the School to properly substantiate credit card expenditures, mainly around the last two months of the School year. Questioned Costs: None Potential Effect: Without sufficient documentation to support the reasonable business purpose of expenses, there in an increased risk for error and/or fraud. These conditions could result in noncompliance and potential loss of current and future funding. Recommendation: All purchases should be properly substantiated with sufficient documentation that clearly supports the reasonable business purpose of expenses incurred. In addition, all expenses should be approved by a person of proper authority. Views of Responsible Officials: The School concurs with the finding and recommendation. See Corrective Action Plan.
Noncompliance and Material Weakness 2 CFR § 400.1 gives regulatory effect for the U. S. Department of Agriculture to the Office of Management and Budget guidance in subparts A through F of 2 CFR part 200, as supplemented by this part, as USDA policies and procedures for uniform administrative requirements, cost principles, and audit requirement for Federal awards. 2 CFR § 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR § 200.514(c) requires auditors to obtain an understanding of the non-Federal entity’s internal control over Federal programs sufficient to plan the audit to support a low assessed level of control risk of noncompliance for major programs, and, unless internal control is likely to be ineffective in preventing or detecting noncompliance, plan the testing of internal control over compliance for major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program and perform testing of internal control as planned. 7 CFR § 210.7(c) states, in part, to be entitled to reimbursement under this part, each school food authority shall ensure that the Claims for Reimbursement . . . accurately reflects the number of lunches and meal supplements served to eligible children, and the school food authority shall, at a minimum: (iii) Base Claims for Reimbursement on lunch counts, taken daily at the point of service, which correctly identify the number of free, reduced price and paid lunches served to eligible children; (iv) Correctly record, consolidate and report those lunch and supplement counts on the Claim for Reimbursement; and (v) Ensure that Claims for Reimbursement do not request payment for any excess lunches produced, as prohibited in § 210.10(a)(2), or non-Program lunches (i.e., a la carte or adult lunches) or for more than one meal supplement per child per day. 7 CFR § 210.8(c) states the Claim for Reimbursement shall include data in sufficient detail to justify the reimbursement claimed and to enable the State agency to provide the Report of School Program Operations required under §210.5(d) of this part. Such data shall include, at a minimum, the number of free, reduced price and paid lunches and meal supplements served to eligible children. The claim shall be signed by a school food authority official. Eight out of thirty (26.7%) site claim forms submitted by the District to the Ohio Department of Education were inaccurate, since the District claimed less meals served than what was actually distributed. These errors occurred due to a weakness in internal controls, which failed to ensure site claim forms for reimbursable meals served at each building and submitted by the District to the Ohio Department of Education were entered correctly. Failure to properly report the number of eligible meals resulted in the District being under reimbursed $3,826. The District should implement policies and procedures to help ensure that monthly site claim forms for all District buildings are reviewed and submitted to reflect actual counts for reimbursable meals served.
Noncompliance and Material Weakness 2 CFR § 400.1 gives regulatory effect for the U. S. Department of Agriculture to the Office of Management and Budget guidance in subparts A through F of 2 CFR part 200, as supplemented by this part, as USDA policies and procedures for uniform administrative requirements, cost principles, and audit requirement for Federal awards. 2 CFR § 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR § 200.514(c) requires auditors to obtain an understanding of the non-Federal entity’s internal control over Federal programs sufficient to plan the audit to support a low assessed level of control risk of noncompliance for major programs, and, unless internal control is likely to be ineffective in preventing or detecting noncompliance, plan the testing of internal control over compliance for major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program and perform testing of internal control as planned. 7 CFR § 210.7(c) states, in part, to be entitled to reimbursement under this part, each school food authority shall ensure that the Claims for Reimbursement . . . accurately reflects the number of lunches and meal supplements served to eligible children, and the school food authority shall, at a minimum: (iii) Base Claims for Reimbursement on lunch counts, taken daily at the point of service, which correctly identify the number of free, reduced price and paid lunches served to eligible children; (iv) Correctly record, consolidate and report those lunch and supplement counts on the Claim for Reimbursement; and (v) Ensure that Claims for Reimbursement do not request payment for any excess lunches produced, as prohibited in § 210.10(a)(2), or non-Program lunches (i.e., a la carte or adult lunches) or for more than one meal supplement per child per day. 7 CFR § 210.8(c) states the Claim for Reimbursement shall include data in sufficient detail to justify the reimbursement claimed and to enable the State agency to provide the Report of School Program Operations required under §210.5(d) of this part. Such data shall include, at a minimum, the number of free, reduced price and paid lunches and meal supplements served to eligible children. The claim shall be signed by a school food authority official. Eight out of thirty (26.7%) site claim forms submitted by the District to the Ohio Department of Education were inaccurate, since the District claimed less meals served than what was actually distributed. These errors occurred due to a weakness in internal controls, which failed to ensure site claim forms for reimbursable meals served at each building and submitted by the District to the Ohio Department of Education were entered correctly. Failure to properly report the number of eligible meals resulted in the District being under reimbursed $3,826. The District should implement policies and procedures to help ensure that monthly site claim forms for all District buildings are reviewed and submitted to reflect actual counts for reimbursable meals served.
Noncompliance and Material Weakness 2 CFR § 400.1 gives regulatory effect for the U. S. Department of Agriculture to the Office of Management and Budget guidance in subparts A through F of 2 CFR part 200, as supplemented by this part, as USDA policies and procedures for uniform administrative requirements, cost principles, and audit requirement for Federal awards. 2 CFR § 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR § 200.514(c) requires auditors to obtain an understanding of the non-Federal entity’s internal control over Federal programs sufficient to plan the audit to support a low assessed level of control risk of noncompliance for major programs, and, unless internal control is likely to be ineffective in preventing or detecting noncompliance, plan the testing of internal control over compliance for major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program and perform testing of internal control as planned. 7 CFR § 210.7(c) states, in part, to be entitled to reimbursement under this part, each school food authority shall ensure that the Claims for Reimbursement . . . accurately reflects the number of lunches and meal supplements served to eligible children, and the school food authority shall, at a minimum: (iii) Base Claims for Reimbursement on lunch counts, taken daily at the point of service, which correctly identify the number of free, reduced price and paid lunches served to eligible children; (iv) Correctly record, consolidate and report those lunch and supplement counts on the Claim for Reimbursement; and (v) Ensure that Claims for Reimbursement do not request payment for any excess lunches produced, as prohibited in § 210.10(a)(2), or non-Program lunches (i.e., a la carte or adult lunches) or for more than one meal supplement per child per day. 7 CFR § 210.8(c) states the Claim for Reimbursement shall include data in sufficient detail to justify the reimbursement claimed and to enable the State agency to provide the Report of School Program Operations required under §210.5(d) of this part. Such data shall include, at a minimum, the number of free, reduced price and paid lunches and meal supplements served to eligible children. The claim shall be signed by a school food authority official. Eight out of thirty (26.7%) site claim forms submitted by the District to the Ohio Department of Education were inaccurate, since the District claimed less meals served than what was actually distributed. These errors occurred due to a weakness in internal controls, which failed to ensure site claim forms for reimbursable meals served at each building and submitted by the District to the Ohio Department of Education were entered correctly. Failure to properly report the number of eligible meals resulted in the District being under reimbursed $3,826. The District should implement policies and procedures to help ensure that monthly site claim forms for all District buildings are reviewed and submitted to reflect actual counts for reimbursable meals served.
Noncompliance and Material Weakness 2 CFR § 400.1 gives regulatory effect for the U. S. Department of Agriculture to the Office of Management and Budget guidance in subparts A through F of 2 CFR part 200, as supplemented by this part, as USDA policies and procedures for uniform administrative requirements, cost principles, and audit requirement for Federal awards. 2 CFR § 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR § 200.514(c) requires auditors to obtain an understanding of the non-Federal entity’s internal control over Federal programs sufficient to plan the audit to support a low assessed level of control risk of noncompliance for major programs, and, unless internal control is likely to be ineffective in preventing or detecting noncompliance, plan the testing of internal control over compliance for major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program and perform testing of internal control as planned. 7 CFR § 210.7(c) states, in part, to be entitled to reimbursement under this part, each school food authority shall ensure that the Claims for Reimbursement . . . accurately reflects the number of lunches and meal supplements served to eligible children, and the school food authority shall, at a minimum: (iii) Base Claims for Reimbursement on lunch counts, taken daily at the point of service, which correctly identify the number of free, reduced price and paid lunches served to eligible children; (iv) Correctly record, consolidate and report those lunch and supplement counts on the Claim for Reimbursement; and (v) Ensure that Claims for Reimbursement do not request payment for any excess lunches produced, as prohibited in § 210.10(a)(2), or non-Program lunches (i.e., a la carte or adult lunches) or for more than one meal supplement per child per day. 7 CFR § 210.8(c) states the Claim for Reimbursement shall include data in sufficient detail to justify the reimbursement claimed and to enable the State agency to provide the Report of School Program Operations required under §210.5(d) of this part. Such data shall include, at a minimum, the number of free, reduced price and paid lunches and meal supplements served to eligible children. The claim shall be signed by a school food authority official. Eight out of thirty (26.7%) site claim forms submitted by the District to the Ohio Department of Education were inaccurate, since the District claimed less meals served than what was actually distributed. These errors occurred due to a weakness in internal controls, which failed to ensure site claim forms for reimbursable meals served at each building and submitted by the District to the Ohio Department of Education were entered correctly. Failure to properly report the number of eligible meals resulted in the District being under reimbursed $3,826. The District should implement policies and procedures to help ensure that monthly site claim forms for all District buildings are reviewed and submitted to reflect actual counts for reimbursable meals served.