Federal Agency: U.S. Department of Education Assistance Listing Number: 84.063 Program Expenditures: $12,171,226 Program Name: Federal Pell Grant Program Award Number(s): P063P211391, P063P221391, and P063P231391 Questioned Costs: None Western Illinois University (University) did not have adequate procedures in place to complete accurate and timely updating of verification statuses in the Common Origination and Disbursement (COD) database for all students within the required time period. During our testing of borrowers that had been selected for verification at the University, we noted 6 out of 25 (24%) students whose verification status was not properly reflected in the COD records. The sample was not a statistically valid sample. The University is required to update the verification status for all borrowers in the COD timely for those selected for verification. During the year, there was a misunderstanding of the waived verification requirements allowable under Dear Colleague Letter “Changes to 2022-2023 Verification Requirements” (GEN-22-06), which caused 6 out of 25 students to not have their verification status updated in the COD. A school participating in Title IV aid programs must establish and maintain proper administrative and fiscal procedures and verify an applicant’s FAFSA information and maintain up to date accurate information in COD (34 CFR 668.53(a)). Uniform Guidance (2 CFR 200.303(a)) requires non-Federal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure verification status for students is updated accurately and timely. University management indicated there was a misunderstanding of the waived verification requirements which caused this error. Failure to have sufficient controls around verification requirements, resulted in the University not accurately or timely updating the verification status in the COD to report that required verifications occurred for students selected by the Department of Education for verification. (Finding Code No. 2023-003) RECOMMENDATION We recommend the University implement controls to ensure that all students verification statuses are updated accurately and timely in the COD. UNIVERSITY RESPONSE The University agrees with the finding. The University's internal controls have been updated as the Department of Education has released the COVID suspension of the verification process.
Federal Agency: U.S. Department of Education Assistance Listing Number: 84.063 Program Expenditures: $12,171,226 Program Name: Federal Pell Grant Program Award Number(s): P063P211391, P063P221391, and P063P231391 Questioned Costs: None Western Illinois University (University) did not have adequate procedures in place to complete accurate and timely updating of verification statuses in the Common Origination and Disbursement (COD) database for all students within the required time period. During our testing of borrowers that had been selected for verification at the University, we noted 6 out of 25 (24%) students whose verification status was not properly reflected in the COD records. The sample was not a statistically valid sample. The University is required to update the verification status for all borrowers in the COD timely for those selected for verification. During the year, there was a misunderstanding of the waived verification requirements allowable under Dear Colleague Letter “Changes to 2022-2023 Verification Requirements” (GEN-22-06), which caused 6 out of 25 students to not have their verification status updated in the COD. A school participating in Title IV aid programs must establish and maintain proper administrative and fiscal procedures and verify an applicant’s FAFSA information and maintain up to date accurate information in COD (34 CFR 668.53(a)). Uniform Guidance (2 CFR 200.303(a)) requires non-Federal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure verification status for students is updated accurately and timely. University management indicated there was a misunderstanding of the waived verification requirements which caused this error. Failure to have sufficient controls around verification requirements, resulted in the University not accurately or timely updating the verification status in the COD to report that required verifications occurred for students selected by the Department of Education for verification. (Finding Code No. 2023-003) RECOMMENDATION We recommend the University implement controls to ensure that all students verification statuses are updated accurately and timely in the COD. UNIVERSITY RESPONSE The University agrees with the finding. The University's internal controls have been updated as the Department of Education has released the COVID suspension of the verification process.
Federal Agency: U.S. Department of Education Assistance Listing Number: 84.063 Program Expenditures: $12,171,226 Program Name: Federal Pell Grant Program Award Number(s): P063P211391, P063P221391, and P063P231391 Questioned Costs: None Western Illinois University (University) did not have adequate procedures in place to complete accurate and timely updating of verification statuses in the Common Origination and Disbursement (COD) database for all students within the required time period. During our testing of borrowers that had been selected for verification at the University, we noted 6 out of 25 (24%) students whose verification status was not properly reflected in the COD records. The sample was not a statistically valid sample. The University is required to update the verification status for all borrowers in the COD timely for those selected for verification. During the year, there was a misunderstanding of the waived verification requirements allowable under Dear Colleague Letter “Changes to 2022-2023 Verification Requirements” (GEN-22-06), which caused 6 out of 25 students to not have their verification status updated in the COD. A school participating in Title IV aid programs must establish and maintain proper administrative and fiscal procedures and verify an applicant’s FAFSA information and maintain up to date accurate information in COD (34 CFR 668.53(a)). Uniform Guidance (2 CFR 200.303(a)) requires non-Federal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure verification status for students is updated accurately and timely. University management indicated there was a misunderstanding of the waived verification requirements which caused this error. Failure to have sufficient controls around verification requirements, resulted in the University not accurately or timely updating the verification status in the COD to report that required verifications occurred for students selected by the Department of Education for verification. (Finding Code No. 2023-003) RECOMMENDATION We recommend the University implement controls to ensure that all students verification statuses are updated accurately and timely in the COD. UNIVERSITY RESPONSE The University agrees with the finding. The University's internal controls have been updated as the Department of Education has released the COVID suspension of the verification process.
Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID‐19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Periods 4 & 5 TIN #420733472 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Significant Deficiency in Internal Control Over Compliance and Noncompliance that is not Material for Reporting Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Hospital did not have evidence of formal review and approval over tracking of expenditures and lost revenue calculation that were claimed for the program. The Hospital’s lost revenue calculation for Period 4 was also reported under Option II when it should have been reported under Option III. In addition, there was no evidence retained that the Hospital’s special report submitted to the Department of Health and Human Services for Period 4 TIN #420733472 was reviewed or approved by an individual separate from the preparer prior to submission. These errors were not noted during testing of the Phase 5 report. Cause: The Hospital did not have an internal control process in place to ensure documentation of review and approval of the expenditures claimed, lost revenues calculated under the federal program, and the report submitted to the Department of Health and Human Services for Period 4 were retained. Effect: The lack of adequate policies governing review and approval increases the risk that employees participating in the federal awards administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context: A nonstatistical sample of 65 items ($200,769) from a total population exceeding 250 items ($904,350) were tested for activities allowed or unallowed and allowable costs/cost principles. All lost revenue calculations were tested. Key line items were tested on the Periods 4 and 5 Department of Health and Human Services special reports. Repeat Finding from Prior Years: No Recommendation: We recommend the Hospital enhance internal control policies to ensure that formal documentation of review and approval is obtained and retained. Views of Responsible Officials: Management agrees with the finding.
Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Special Tests and Provisions Material Weakness in Internal Control Over Compliance and Material Noncompliance for Special Tests and Provisions Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Hospital did not maintain a reserve account or request the Department of Agriculture’s (USDA) permission prior to entering into new debt in compliance with their debt agreements. As of June 30, 2023, the Hospital should have USDA debt reserves at least equal to $417,954. Cause: The lack of adequate policies governing the understanding and execution of loan agreement requirements. Effect: The Hospital was not in compliance with their provisions of the USDA debt agreements. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: We recommend the Hospital enhance internal control policies to ensure that loan requirements are met. In additional we recommend the Hospital reach out to USDA to inform them of the situation and request clarification on how to best remedy the situation including establishing and funding the USDA debt reserves. Views of Responsible Officials: Management agrees with the finding.
2023-004 Documentation of Review and Approval of Disbursements Title and Assistance Listing Number of the Federal Program: 84.425D COVID-19 - Elementary and Secondary School Emergency Relief Fund; 84.425U COVID-19 - American Rescue plan – Elementary and Secondary School Emergency Relief Fiscal Year Finding Originated: 2023 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Name of Federal Agency: Department of Education Pass-through Agency: Louisiana Department of Education / East Baton Rouge Parish School Board Questioned Costs: No questioned costs reported. Condition: The Academies were not consistently able to provide documentation of review and approval of transactions tested. Criteria: As noted in 2 CFR 200.303 “Internal controls”, non-Federal entities must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-Federal entity is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of Federal awards. Cause: For non-payroll items, 9 out of 21 transactions tested did not have sufficient documentation notating review and approval of the non-payroll disbursements. As a result, internal controls over non-payroll disbursements were not operating effectively. For payroll items, 8 out of 26 payroll transactions tested did not have sufficient documentation notating review and approval of the payroll costs. The Academies changed their payroll service provider during the fiscal year and did not retain pertinent information regarding approval of payroll from the previous payroll provider, to which the exceptions are derived from. Effect: Disbursements that lack supervisory review and approval are at greater risk of being improper due to fraud or error. Recommendation: The Academies should ensure internal controls are operating effectively and that documentation of internal controls is maintained to demonstrate the effectiveness of the control. Views of responsible officials: See views of responsible officials on page 36.
2023-004 Documentation of Review and Approval of Disbursements Title and Assistance Listing Number of the Federal Program: 84.425D COVID-19 - Elementary and Secondary School Emergency Relief Fund; 84.425U COVID-19 - American Rescue plan – Elementary and Secondary School Emergency Relief Fiscal Year Finding Originated: 2023 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Name of Federal Agency: Department of Education Pass-through Agency: Louisiana Department of Education / East Baton Rouge Parish School Board Questioned Costs: No questioned costs reported. Condition: The Academies were not consistently able to provide documentation of review and approval of transactions tested. Criteria: As noted in 2 CFR 200.303 “Internal controls”, non-Federal entities must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-Federal entity is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of Federal awards. Cause: For non-payroll items, 9 out of 21 transactions tested did not have sufficient documentation notating review and approval of the non-payroll disbursements. As a result, internal controls over non-payroll disbursements were not operating effectively. For payroll items, 8 out of 26 payroll transactions tested did not have sufficient documentation notating review and approval of the payroll costs. The Academies changed their payroll service provider during the fiscal year and did not retain pertinent information regarding approval of payroll from the previous payroll provider, to which the exceptions are derived from. Effect: Disbursements that lack supervisory review and approval are at greater risk of being improper due to fraud or error. Recommendation: The Academies should ensure internal controls are operating effectively and that documentation of internal controls is maintained to demonstrate the effectiveness of the control. Views of responsible officials: See views of responsible officials on page 36.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 15 PIKE COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not designed or implemented a system of internal controls, which would include appropriate segregation of duties, to ensure that construction contracts in excess of $2,000 paid from federal grant funds included a prevailing wage rate clause. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. Three construction contracts, with expenditures totaling $1,138,605, were paid from the COVID-19 - Education Stabilization Fund grant award during the audit period. All three contracts were tested. None of the contracts included the required prevailing wage rate clause. Additionally, only one of the three contractors provided certified weekly payrolls to the School Corporation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in § 5.1, the following clauses . . . (1) Minimum wages. INDIANA STATE BOARD OF ACCOUNTS 16 PIKE COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (3) Payrolls and basic records. . . . (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). The payrolls submitted shall set out accurately and completely all of the information required to be maintained under 29 CFR 5.5(a)(3)(i), except that full social security numbers and home addresses shall not be included on weekly transmittals. . . ." 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, 'Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction'). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 17 PIKE COUNTY 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, construction contracts entered into did not contain the required wage rate requirements clauses nor were all certified payrolls obtained by the School Corporation. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and include the wage rate requirement clause in construction contracts. In addition, certified payrolls should be obtained as required. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 15 PIKE COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not designed or implemented a system of internal controls, which would include appropriate segregation of duties, to ensure that construction contracts in excess of $2,000 paid from federal grant funds included a prevailing wage rate clause. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. Three construction contracts, with expenditures totaling $1,138,605, were paid from the COVID-19 - Education Stabilization Fund grant award during the audit period. All three contracts were tested. None of the contracts included the required prevailing wage rate clause. Additionally, only one of the three contractors provided certified weekly payrolls to the School Corporation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in § 5.1, the following clauses . . . (1) Minimum wages. INDIANA STATE BOARD OF ACCOUNTS 16 PIKE COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (3) Payrolls and basic records. . . . (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). The payrolls submitted shall set out accurately and completely all of the information required to be maintained under 29 CFR 5.5(a)(3)(i), except that full social security numbers and home addresses shall not be included on weekly transmittals. . . ." 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, 'Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction'). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 17 PIKE COUNTY 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, construction contracts entered into did not contain the required wage rate requirements clauses nor were all certified payrolls obtained by the School Corporation. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and include the wage rate requirement clause in construction contracts. In addition, certified payrolls should be obtained as required. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 15 PIKE COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not designed or implemented a system of internal controls, which would include appropriate segregation of duties, to ensure that construction contracts in excess of $2,000 paid from federal grant funds included a prevailing wage rate clause. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. Three construction contracts, with expenditures totaling $1,138,605, were paid from the COVID-19 - Education Stabilization Fund grant award during the audit period. All three contracts were tested. None of the contracts included the required prevailing wage rate clause. Additionally, only one of the three contractors provided certified weekly payrolls to the School Corporation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in § 5.1, the following clauses . . . (1) Minimum wages. INDIANA STATE BOARD OF ACCOUNTS 16 PIKE COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (3) Payrolls and basic records. . . . (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). The payrolls submitted shall set out accurately and completely all of the information required to be maintained under 29 CFR 5.5(a)(3)(i), except that full social security numbers and home addresses shall not be included on weekly transmittals. . . ." 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, 'Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction'). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 17 PIKE COUNTY 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, construction contracts entered into did not contain the required wage rate requirements clauses nor were all certified payrolls obtained by the School Corporation. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and include the wage rate requirement clause in construction contracts. In addition, certified payrolls should be obtained as required. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 15 PIKE COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not designed or implemented a system of internal controls, which would include appropriate segregation of duties, to ensure that construction contracts in excess of $2,000 paid from federal grant funds included a prevailing wage rate clause. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. Three construction contracts, with expenditures totaling $1,138,605, were paid from the COVID-19 - Education Stabilization Fund grant award during the audit period. All three contracts were tested. None of the contracts included the required prevailing wage rate clause. Additionally, only one of the three contractors provided certified weekly payrolls to the School Corporation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in § 5.1, the following clauses . . . (1) Minimum wages. INDIANA STATE BOARD OF ACCOUNTS 16 PIKE COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (3) Payrolls and basic records. . . . (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). The payrolls submitted shall set out accurately and completely all of the information required to be maintained under 29 CFR 5.5(a)(3)(i), except that full social security numbers and home addresses shall not be included on weekly transmittals. . . ." 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, 'Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction'). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 17 PIKE COUNTY 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, construction contracts entered into did not contain the required wage rate requirements clauses nor were all certified payrolls obtained by the School Corporation. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and include the wage rate requirement clause in construction contracts. In addition, certified payrolls should be obtained as required. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 15 PIKE COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not designed or implemented a system of internal controls, which would include appropriate segregation of duties, to ensure that construction contracts in excess of $2,000 paid from federal grant funds included a prevailing wage rate clause. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. Three construction contracts, with expenditures totaling $1,138,605, were paid from the COVID-19 - Education Stabilization Fund grant award during the audit period. All three contracts were tested. None of the contracts included the required prevailing wage rate clause. Additionally, only one of the three contractors provided certified weekly payrolls to the School Corporation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in § 5.1, the following clauses . . . (1) Minimum wages. INDIANA STATE BOARD OF ACCOUNTS 16 PIKE COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (3) Payrolls and basic records. . . . (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). The payrolls submitted shall set out accurately and completely all of the information required to be maintained under 29 CFR 5.5(a)(3)(i), except that full social security numbers and home addresses shall not be included on weekly transmittals. . . ." 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, 'Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction'). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 17 PIKE COUNTY 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, construction contracts entered into did not contain the required wage rate requirements clauses nor were all certified payrolls obtained by the School Corporation. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and include the wage rate requirement clause in construction contracts. In addition, certified payrolls should be obtained as required. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 15 PIKE COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not designed or implemented a system of internal controls, which would include appropriate segregation of duties, to ensure that construction contracts in excess of $2,000 paid from federal grant funds included a prevailing wage rate clause. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. Three construction contracts, with expenditures totaling $1,138,605, were paid from the COVID-19 - Education Stabilization Fund grant award during the audit period. All three contracts were tested. None of the contracts included the required prevailing wage rate clause. Additionally, only one of the three contractors provided certified weekly payrolls to the School Corporation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in § 5.1, the following clauses . . . (1) Minimum wages. INDIANA STATE BOARD OF ACCOUNTS 16 PIKE COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (3) Payrolls and basic records. . . . (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). The payrolls submitted shall set out accurately and completely all of the information required to be maintained under 29 CFR 5.5(a)(3)(i), except that full social security numbers and home addresses shall not be included on weekly transmittals. . . ." 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, 'Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction'). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 17 PIKE COUNTY 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, construction contracts entered into did not contain the required wage rate requirements clauses nor were all certified payrolls obtained by the School Corporation. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and include the wage rate requirement clause in construction contracts. In addition, certified payrolls should be obtained as required. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: COVID-19 Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, to ensure that the equipment and real property records contained all the required information. A property record or capital asset listing which would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and use and condition of the property is to be maintained for assets purchased that exceed the School Corporation's capitalization threshold. INDIANA STATE BOARD OF ACCOUNTS 18 PIKE COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation maintained and presented the equipment and real property records for the COVID-19 - Education Stabilization Fund grant equipment; however, the records failed to include a serial number or other identification number, the source of funding for the property (including the federal award identification number), percentage of federal participation in the project costs for the federal award under which the property was acquired, the use, and condition of the property. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep property in good condition. . . ." 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. INDIANA STATE BOARD OF ACCOUNTS 19 PIKE COUNTY 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, the capital asset listing did not include all the required information. 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 asset records include all the necessary information. 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: COVID-19 Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, to ensure that the equipment and real property records contained all the required information. A property record or capital asset listing which would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and use and condition of the property is to be maintained for assets purchased that exceed the School Corporation's capitalization threshold. INDIANA STATE BOARD OF ACCOUNTS 18 PIKE COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation maintained and presented the equipment and real property records for the COVID-19 - Education Stabilization Fund grant equipment; however, the records failed to include a serial number or other identification number, the source of funding for the property (including the federal award identification number), percentage of federal participation in the project costs for the federal award under which the property was acquired, the use, and condition of the property. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep property in good condition. . . ." 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. INDIANA STATE BOARD OF ACCOUNTS 19 PIKE COUNTY 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, the capital asset listing did not include all the required information. 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 asset records include all the necessary information. 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: COVID-19 Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, to ensure that the equipment and real property records contained all the required information. A property record or capital asset listing which would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and use and condition of the property is to be maintained for assets purchased that exceed the School Corporation's capitalization threshold. INDIANA STATE BOARD OF ACCOUNTS 18 PIKE COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation maintained and presented the equipment and real property records for the COVID-19 - Education Stabilization Fund grant equipment; however, the records failed to include a serial number or other identification number, the source of funding for the property (including the federal award identification number), percentage of federal participation in the project costs for the federal award under which the property was acquired, the use, and condition of the property. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep property in good condition. . . ." 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. INDIANA STATE BOARD OF ACCOUNTS 19 PIKE COUNTY 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, the capital asset listing did not include all the required information. 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 asset records include all the necessary information. 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: COVID-19 Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, to ensure that the equipment and real property records contained all the required information. A property record or capital asset listing which would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and use and condition of the property is to be maintained for assets purchased that exceed the School Corporation's capitalization threshold. INDIANA STATE BOARD OF ACCOUNTS 18 PIKE COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation maintained and presented the equipment and real property records for the COVID-19 - Education Stabilization Fund grant equipment; however, the records failed to include a serial number or other identification number, the source of funding for the property (including the federal award identification number), percentage of federal participation in the project costs for the federal award under which the property was acquired, the use, and condition of the property. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep property in good condition. . . ." 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. INDIANA STATE BOARD OF ACCOUNTS 19 PIKE COUNTY 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, the capital asset listing did not include all the required information. 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 asset records include all the necessary information. 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: COVID-19 Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, to ensure that the equipment and real property records contained all the required information. A property record or capital asset listing which would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and use and condition of the property is to be maintained for assets purchased that exceed the School Corporation's capitalization threshold. INDIANA STATE BOARD OF ACCOUNTS 18 PIKE COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation maintained and presented the equipment and real property records for the COVID-19 - Education Stabilization Fund grant equipment; however, the records failed to include a serial number or other identification number, the source of funding for the property (including the federal award identification number), percentage of federal participation in the project costs for the federal award under which the property was acquired, the use, and condition of the property. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep property in good condition. . . ." 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. INDIANA STATE BOARD OF ACCOUNTS 19 PIKE COUNTY 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, the capital asset listing did not include all the required information. 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 asset records include all the necessary information. 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: COVID-19 Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, to ensure that the equipment and real property records contained all the required information. A property record or capital asset listing which would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and use and condition of the property is to be maintained for assets purchased that exceed the School Corporation's capitalization threshold. INDIANA STATE BOARD OF ACCOUNTS 18 PIKE COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation maintained and presented the equipment and real property records for the COVID-19 - Education Stabilization Fund grant equipment; however, the records failed to include a serial number or other identification number, the source of funding for the property (including the federal award identification number), percentage of federal participation in the project costs for the federal award under which the property was acquired, the use, and condition of the property. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep property in good condition. . . ." 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. INDIANA STATE BOARD OF ACCOUNTS 19 PIKE COUNTY 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, the capital asset listing did not include all the required information. 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 asset records include all the necessary information. 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: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listings Number: 84.027 Federal Award Number and Year (or Other Identifying Number): 21611-009-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation is a member of the Exceptional Children's Co-op (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its member schools. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school corporation, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. There was inadequate oversight performed by the School Corporation in order to ensure the required nonpublic proportionate share was met. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditure for nonpublic school students with disabilities was met for each member school corporation. The Cooperative did not have effective internal controls to ensure nonpublic school expenditures were appropriately identified and reported. INDIANA STATE BOARD OF ACCOUNTS 20 PIKE COUNTY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The Non-Public Proportionate Share expenditures for the 21611-009-PN01 grant award could not be verified for the individual member school corporations. Total grant expenditures were posted as expended. The Non-Public Proportionate Share expenditures were determined by applying a percentage to the nonpublic school budgeted expenditures. These were the amounts reported to the IDOE. As such, we were unable to identify if the minimum amount per grant award was expended and properly reported to the IDOE as required. The lack of internal controls and noncompliance was isolated to 2021-2022 for the 21611-009-PN01 grant award. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed, . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." 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. INDIANA STATE BOARD OF ACCOUNTS 21 PIKE COUNTY 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 such, Non-Public Proportionate Share expenditures per member school could not be determined. 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 Non-Public Proportionate Share funds are appropriately allocated to the member school based on expenses charged directly on behalf of the member school. Supporting documentation for these expenses should be retained for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 22
Type of Finding: Material Weakness Criteria: 2 CFR Section 200.302 of the Uniform Guidance requires that a non-federal entity provide for accurate, current, and complete disclosure of the financial results of each Federal award or program. Additionally, 2 CFR Section 200.303 of the Uniform Guidance 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: We identified the following issues during our audit procedures over the SEFA and federal grant expenditure reports (SEFA project rollout): The preliminary SEFA provided by the Agency excluded eight federal programs with approximately $779,000 of federal revenues. The preliminary SEFA provided by the Agency contained various inaccuracies for contract numbers and contract periods, which resulted in various corrections subsequent to receipt of the preliminary SEFA. Thirty-two project reports for cost reimbursable federal grants contained variances over $25,000 between federal revenues and expenditures. Through procedures performed in other audit areas, we identified approximately $908,000 of contract labor invoices and expenditures not accrued on the Agency’s consolidated financial statements and excluded from the preliminary SEFA. These expenditures were related to the Emergency Food and Shelter Program (EFSP) (ALN #97.024). The Agency received advanced funding throughout the year from FEMA for operating the Centro De Bienvenida (CDB). The complete and final reconciliation for federal grant deferred revenues to account for the balance of advanced funds was not timely provided at the start of audit fieldwork. Various adjustments were pending to deferred revenue accounts, specifically EFSP-allowable expenditures for the CDB and reversal of prior year deferred revenues for expenditures incurred in the current year. This resulted in approximately $490,000 of adjustments to deferred revenue accounts during the audit. The Agency identified approximately $123,000 of disallowed expenditures, which required reclassification from the CDB federal project code to general funds. This amount was not provided until after completion of the Agency’s expense receipt review project which was after the start of audit fieldwork. The specific issues and/or observations noted above included material adjustments proposed during the audit to properly reconcile the federal award expenditures and obtain a complete and accurate SEFA. These adjustments and findings also resulted in four versions of the SEFA received by the auditor throughout our audit procedures. Cause: Lack of timely review and oversight of federal project expenditures, including the SEFA rollout report. In addition, the preliminary SEFA and underlying support was not timely reviewed by management after it was prepared by accounting staff. Effect or potential effect: Not implementing a timely review of federal grant expenditures (SEFA rollout report) and deferred revenue reconciliations, including information contained in the SEFA, increases the risk of material errors to the consolidated financial statements that would not be detected by management in a timely manner. Recommendation: We recommend the Agency implement adequate and timely oversight of federal grant expenditures to ensure proper compliance with federal expenditure reporting and SEFA preparation. We understand that the agency’s federal grant budget significantly increased during the fiscal year with the operation of the CDB. Thus, it is expected that increased federal funding levels would require more levels oversight to ensure compliance with proper financial management of the grants. Repeat Finding: No Questioned Costs: None Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.
Type of Finding: Material Weakness Criteria: 2 CFR Section 200.302 of the Uniform Guidance requires that a non-federal entity provide for accurate, current, and complete disclosure of the financial results of each Federal award or program. Additionally, 2 CFR Section 200.303 of the Uniform Guidance 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: We identified the following issues during our audit procedures over the SEFA and federal grant expenditure reports (SEFA project rollout): The preliminary SEFA provided by the Agency excluded eight federal programs with approximately $779,000 of federal revenues. The preliminary SEFA provided by the Agency contained various inaccuracies for contract numbers and contract periods, which resulted in various corrections subsequent to receipt of the preliminary SEFA. Thirty-two project reports for cost reimbursable federal grants contained variances over $25,000 between federal revenues and expenditures. Through procedures performed in other audit areas, we identified approximately $908,000 of contract labor invoices and expenditures not accrued on the Agency’s consolidated financial statements and excluded from the preliminary SEFA. These expenditures were related to the Emergency Food and Shelter Program (EFSP) (ALN #97.024). The Agency received advanced funding throughout the year from FEMA for operating the Centro De Bienvenida (CDB). The complete and final reconciliation for federal grant deferred revenues to account for the balance of advanced funds was not timely provided at the start of audit fieldwork. Various adjustments were pending to deferred revenue accounts, specifically EFSP-allowable expenditures for the CDB and reversal of prior year deferred revenues for expenditures incurred in the current year. This resulted in approximately $490,000 of adjustments to deferred revenue accounts during the audit. The Agency identified approximately $123,000 of disallowed expenditures, which required reclassification from the CDB federal project code to general funds. This amount was not provided until after completion of the Agency’s expense receipt review project which was after the start of audit fieldwork. The specific issues and/or observations noted above included material adjustments proposed during the audit to properly reconcile the federal award expenditures and obtain a complete and accurate SEFA. These adjustments and findings also resulted in four versions of the SEFA received by the auditor throughout our audit procedures. Cause: Lack of timely review and oversight of federal project expenditures, including the SEFA rollout report. In addition, the preliminary SEFA and underlying support was not timely reviewed by management after it was prepared by accounting staff. Effect or potential effect: Not implementing a timely review of federal grant expenditures (SEFA rollout report) and deferred revenue reconciliations, including information contained in the SEFA, increases the risk of material errors to the consolidated financial statements that would not be detected by management in a timely manner. Recommendation: We recommend the Agency implement adequate and timely oversight of federal grant expenditures to ensure proper compliance with federal expenditure reporting and SEFA preparation. We understand that the agency’s federal grant budget significantly increased during the fiscal year with the operation of the CDB. Thus, it is expected that increased federal funding levels would require more levels oversight to ensure compliance with proper financial management of the grants. Repeat Finding: No Questioned Costs: None Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.
Type of Finding: Material Weakness Criteria: 2 CFR Section 200.302 of the Uniform Guidance requires that a non-federal entity provide for accurate, current, and complete disclosure of the financial results of each Federal award or program. Additionally, 2 CFR Section 200.303 of the Uniform Guidance 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: We identified the following issues during our audit procedures over the SEFA and federal grant expenditure reports (SEFA project rollout): The preliminary SEFA provided by the Agency excluded eight federal programs with approximately $779,000 of federal revenues. The preliminary SEFA provided by the Agency contained various inaccuracies for contract numbers and contract periods, which resulted in various corrections subsequent to receipt of the preliminary SEFA. Thirty-two project reports for cost reimbursable federal grants contained variances over $25,000 between federal revenues and expenditures. Through procedures performed in other audit areas, we identified approximately $908,000 of contract labor invoices and expenditures not accrued on the Agency’s consolidated financial statements and excluded from the preliminary SEFA. These expenditures were related to the Emergency Food and Shelter Program (EFSP) (ALN #97.024). The Agency received advanced funding throughout the year from FEMA for operating the Centro De Bienvenida (CDB). The complete and final reconciliation for federal grant deferred revenues to account for the balance of advanced funds was not timely provided at the start of audit fieldwork. Various adjustments were pending to deferred revenue accounts, specifically EFSP-allowable expenditures for the CDB and reversal of prior year deferred revenues for expenditures incurred in the current year. This resulted in approximately $490,000 of adjustments to deferred revenue accounts during the audit. The Agency identified approximately $123,000 of disallowed expenditures, which required reclassification from the CDB federal project code to general funds. This amount was not provided until after completion of the Agency’s expense receipt review project which was after the start of audit fieldwork. The specific issues and/or observations noted above included material adjustments proposed during the audit to properly reconcile the federal award expenditures and obtain a complete and accurate SEFA. These adjustments and findings also resulted in four versions of the SEFA received by the auditor throughout our audit procedures. Cause: Lack of timely review and oversight of federal project expenditures, including the SEFA rollout report. In addition, the preliminary SEFA and underlying support was not timely reviewed by management after it was prepared by accounting staff. Effect or potential effect: Not implementing a timely review of federal grant expenditures (SEFA rollout report) and deferred revenue reconciliations, including information contained in the SEFA, increases the risk of material errors to the consolidated financial statements that would not be detected by management in a timely manner. Recommendation: We recommend the Agency implement adequate and timely oversight of federal grant expenditures to ensure proper compliance with federal expenditure reporting and SEFA preparation. We understand that the agency’s federal grant budget significantly increased during the fiscal year with the operation of the CDB. Thus, it is expected that increased federal funding levels would require more levels oversight to ensure compliance with proper financial management of the grants. Repeat Finding: No Questioned Costs: None Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.
Type of Finding: Material Weakness Criteria: 2 CFR Section 200.302 of the Uniform Guidance requires that a non-federal entity provide for accurate, current, and complete disclosure of the financial results of each Federal award or program. Additionally, 2 CFR Section 200.303 of the Uniform Guidance 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: We identified the following issues during our audit procedures over the SEFA and federal grant expenditure reports (SEFA project rollout): The preliminary SEFA provided by the Agency excluded eight federal programs with approximately $779,000 of federal revenues. The preliminary SEFA provided by the Agency contained various inaccuracies for contract numbers and contract periods, which resulted in various corrections subsequent to receipt of the preliminary SEFA. Thirty-two project reports for cost reimbursable federal grants contained variances over $25,000 between federal revenues and expenditures. Through procedures performed in other audit areas, we identified approximately $908,000 of contract labor invoices and expenditures not accrued on the Agency’s consolidated financial statements and excluded from the preliminary SEFA. These expenditures were related to the Emergency Food and Shelter Program (EFSP) (ALN #97.024). The Agency received advanced funding throughout the year from FEMA for operating the Centro De Bienvenida (CDB). The complete and final reconciliation for federal grant deferred revenues to account for the balance of advanced funds was not timely provided at the start of audit fieldwork. Various adjustments were pending to deferred revenue accounts, specifically EFSP-allowable expenditures for the CDB and reversal of prior year deferred revenues for expenditures incurred in the current year. This resulted in approximately $490,000 of adjustments to deferred revenue accounts during the audit. The Agency identified approximately $123,000 of disallowed expenditures, which required reclassification from the CDB federal project code to general funds. This amount was not provided until after completion of the Agency’s expense receipt review project which was after the start of audit fieldwork. The specific issues and/or observations noted above included material adjustments proposed during the audit to properly reconcile the federal award expenditures and obtain a complete and accurate SEFA. These adjustments and findings also resulted in four versions of the SEFA received by the auditor throughout our audit procedures. Cause: Lack of timely review and oversight of federal project expenditures, including the SEFA rollout report. In addition, the preliminary SEFA and underlying support was not timely reviewed by management after it was prepared by accounting staff. Effect or potential effect: Not implementing a timely review of federal grant expenditures (SEFA rollout report) and deferred revenue reconciliations, including information contained in the SEFA, increases the risk of material errors to the consolidated financial statements that would not be detected by management in a timely manner. Recommendation: We recommend the Agency implement adequate and timely oversight of federal grant expenditures to ensure proper compliance with federal expenditure reporting and SEFA preparation. We understand that the agency’s federal grant budget significantly increased during the fiscal year with the operation of the CDB. Thus, it is expected that increased federal funding levels would require more levels oversight to ensure compliance with proper financial management of the grants. Repeat Finding: No Questioned Costs: None Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.
Type of Finding: Material Weakness Criteria: 2 CFR Section 200.302 of the Uniform Guidance requires that a non-federal entity provide for accurate, current, and complete disclosure of the financial results of each Federal award or program. Additionally, 2 CFR Section 200.303 of the Uniform Guidance 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: We identified the following issues during our audit procedures over the SEFA and federal grant expenditure reports (SEFA project rollout): The preliminary SEFA provided by the Agency excluded eight federal programs with approximately $779,000 of federal revenues. The preliminary SEFA provided by the Agency contained various inaccuracies for contract numbers and contract periods, which resulted in various corrections subsequent to receipt of the preliminary SEFA. Thirty-two project reports for cost reimbursable federal grants contained variances over $25,000 between federal revenues and expenditures. Through procedures performed in other audit areas, we identified approximately $908,000 of contract labor invoices and expenditures not accrued on the Agency’s consolidated financial statements and excluded from the preliminary SEFA. These expenditures were related to the Emergency Food and Shelter Program (EFSP) (ALN #97.024). The Agency received advanced funding throughout the year from FEMA for operating the Centro De Bienvenida (CDB). The complete and final reconciliation for federal grant deferred revenues to account for the balance of advanced funds was not timely provided at the start of audit fieldwork. Various adjustments were pending to deferred revenue accounts, specifically EFSP-allowable expenditures for the CDB and reversal of prior year deferred revenues for expenditures incurred in the current year. This resulted in approximately $490,000 of adjustments to deferred revenue accounts during the audit. The Agency identified approximately $123,000 of disallowed expenditures, which required reclassification from the CDB federal project code to general funds. This amount was not provided until after completion of the Agency’s expense receipt review project which was after the start of audit fieldwork. The specific issues and/or observations noted above included material adjustments proposed during the audit to properly reconcile the federal award expenditures and obtain a complete and accurate SEFA. These adjustments and findings also resulted in four versions of the SEFA received by the auditor throughout our audit procedures. Cause: Lack of timely review and oversight of federal project expenditures, including the SEFA rollout report. In addition, the preliminary SEFA and underlying support was not timely reviewed by management after it was prepared by accounting staff. Effect or potential effect: Not implementing a timely review of federal grant expenditures (SEFA rollout report) and deferred revenue reconciliations, including information contained in the SEFA, increases the risk of material errors to the consolidated financial statements that would not be detected by management in a timely manner. Recommendation: We recommend the Agency implement adequate and timely oversight of federal grant expenditures to ensure proper compliance with federal expenditure reporting and SEFA preparation. We understand that the agency’s federal grant budget significantly increased during the fiscal year with the operation of the CDB. Thus, it is expected that increased federal funding levels would require more levels oversight to ensure compliance with proper financial management of the grants. Repeat Finding: No Questioned Costs: None Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.
Type of Finding: Material Weakness Criteria: 2 CFR Section 200.302 of the Uniform Guidance requires that a non-federal entity provide for accurate, current, and complete disclosure of the financial results of each Federal award or program. Additionally, 2 CFR Section 200.303 of the Uniform Guidance 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: We identified the following issues during our audit procedures over the SEFA and federal grant expenditure reports (SEFA project rollout): The preliminary SEFA provided by the Agency excluded eight federal programs with approximately $779,000 of federal revenues. The preliminary SEFA provided by the Agency contained various inaccuracies for contract numbers and contract periods, which resulted in various corrections subsequent to receipt of the preliminary SEFA. Thirty-two project reports for cost reimbursable federal grants contained variances over $25,000 between federal revenues and expenditures. Through procedures performed in other audit areas, we identified approximately $908,000 of contract labor invoices and expenditures not accrued on the Agency’s consolidated financial statements and excluded from the preliminary SEFA. These expenditures were related to the Emergency Food and Shelter Program (EFSP) (ALN #97.024). The Agency received advanced funding throughout the year from FEMA for operating the Centro De Bienvenida (CDB). The complete and final reconciliation for federal grant deferred revenues to account for the balance of advanced funds was not timely provided at the start of audit fieldwork. Various adjustments were pending to deferred revenue accounts, specifically EFSP-allowable expenditures for the CDB and reversal of prior year deferred revenues for expenditures incurred in the current year. This resulted in approximately $490,000 of adjustments to deferred revenue accounts during the audit. The Agency identified approximately $123,000 of disallowed expenditures, which required reclassification from the CDB federal project code to general funds. This amount was not provided until after completion of the Agency’s expense receipt review project which was after the start of audit fieldwork. The specific issues and/or observations noted above included material adjustments proposed during the audit to properly reconcile the federal award expenditures and obtain a complete and accurate SEFA. These adjustments and findings also resulted in four versions of the SEFA received by the auditor throughout our audit procedures. Cause: Lack of timely review and oversight of federal project expenditures, including the SEFA rollout report. In addition, the preliminary SEFA and underlying support was not timely reviewed by management after it was prepared by accounting staff. Effect or potential effect: Not implementing a timely review of federal grant expenditures (SEFA rollout report) and deferred revenue reconciliations, including information contained in the SEFA, increases the risk of material errors to the consolidated financial statements that would not be detected by management in a timely manner. Recommendation: We recommend the Agency implement adequate and timely oversight of federal grant expenditures to ensure proper compliance with federal expenditure reporting and SEFA preparation. We understand that the agency’s federal grant budget significantly increased during the fiscal year with the operation of the CDB. Thus, it is expected that increased federal funding levels would require more levels oversight to ensure compliance with proper financial management of the grants. Repeat Finding: No Questioned Costs: None Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.
Type of Finding: Material Weakness Criteria: 2 CFR Section 200.302 of the Uniform Guidance requires that a non-federal entity provide for accurate, current, and complete disclosure of the financial results of each Federal award or program. Additionally, 2 CFR Section 200.303 of the Uniform Guidance 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: We identified the following issues during our audit procedures over the SEFA and federal grant expenditure reports (SEFA project rollout): The preliminary SEFA provided by the Agency excluded eight federal programs with approximately $779,000 of federal revenues. The preliminary SEFA provided by the Agency contained various inaccuracies for contract numbers and contract periods, which resulted in various corrections subsequent to receipt of the preliminary SEFA. Thirty-two project reports for cost reimbursable federal grants contained variances over $25,000 between federal revenues and expenditures. Through procedures performed in other audit areas, we identified approximately $908,000 of contract labor invoices and expenditures not accrued on the Agency’s consolidated financial statements and excluded from the preliminary SEFA. These expenditures were related to the Emergency Food and Shelter Program (EFSP) (ALN #97.024). The Agency received advanced funding throughout the year from FEMA for operating the Centro De Bienvenida (CDB). The complete and final reconciliation for federal grant deferred revenues to account for the balance of advanced funds was not timely provided at the start of audit fieldwork. Various adjustments were pending to deferred revenue accounts, specifically EFSP-allowable expenditures for the CDB and reversal of prior year deferred revenues for expenditures incurred in the current year. This resulted in approximately $490,000 of adjustments to deferred revenue accounts during the audit. The Agency identified approximately $123,000 of disallowed expenditures, which required reclassification from the CDB federal project code to general funds. This amount was not provided until after completion of the Agency’s expense receipt review project which was after the start of audit fieldwork. The specific issues and/or observations noted above included material adjustments proposed during the audit to properly reconcile the federal award expenditures and obtain a complete and accurate SEFA. These adjustments and findings also resulted in four versions of the SEFA received by the auditor throughout our audit procedures. Cause: Lack of timely review and oversight of federal project expenditures, including the SEFA rollout report. In addition, the preliminary SEFA and underlying support was not timely reviewed by management after it was prepared by accounting staff. Effect or potential effect: Not implementing a timely review of federal grant expenditures (SEFA rollout report) and deferred revenue reconciliations, including information contained in the SEFA, increases the risk of material errors to the consolidated financial statements that would not be detected by management in a timely manner. Recommendation: We recommend the Agency implement adequate and timely oversight of federal grant expenditures to ensure proper compliance with federal expenditure reporting and SEFA preparation. We understand that the agency’s federal grant budget significantly increased during the fiscal year with the operation of the CDB. Thus, it is expected that increased federal funding levels would require more levels oversight to ensure compliance with proper financial management of the grants. Repeat Finding: No Questioned Costs: None Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.
Type of Finding: Significant Deficiency Criteria: 2 CFR Section 200.303 of the Uniform Guidance 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 credit card purchases, we noted that supervisor approvals of expense reports were not timely obtained. Specifically, we identified the following: Out of 25 credit card transactions tested during our financial statement audit procedures, we noted: 1 transaction did not have proper approvals on file, Approvals for 6 transactions occurred over 90 days after transaction dates, Approvals for 4 transactions occurred over 120 days after the transaction dates, Out of 25 credit card transactions tested during the single audit procedures (ALN #97.024), we noted: Approvals for 9 transactions occurred over 30 days after the transaction dates, Approvals for 8 transactions occurred over 90 days after the transaction dates Cause: Lack of timely review of credit card expense reports and transactions by supervisors for approval. Effect or potential effect: Noncompliance with federal award grants for disallowed costs or costs charged to grants without accurate supporting documentation. Additionally, credit card purchases run a higher risk for abuse if not timely reviewed. Recommendation: We recommend that the Agency ensure that all credit card reports and transactions are timely reviewed by supervisors to ensure proper compliance with federal grant requirements. Repeat Finding: No Questioned Costs: None Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.
Type of Finding: Significant Deficiency Criteria: 2 CFR Section 200.303 of the Uniform Guidance 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 credit card purchases, we noted that supervisor approvals of expense reports were not timely obtained. Specifically, we identified the following: Out of 25 credit card transactions tested during our financial statement audit procedures, we noted: 1 transaction did not have proper approvals on file, Approvals for 6 transactions occurred over 90 days after transaction dates, Approvals for 4 transactions occurred over 120 days after the transaction dates, Out of 25 credit card transactions tested during the single audit procedures (ALN #97.024), we noted: Approvals for 9 transactions occurred over 30 days after the transaction dates, Approvals for 8 transactions occurred over 90 days after the transaction dates Cause: Lack of timely review of credit card expense reports and transactions by supervisors for approval. Effect or potential effect: Noncompliance with federal award grants for disallowed costs or costs charged to grants without accurate supporting documentation. Additionally, credit card purchases run a higher risk for abuse if not timely reviewed. Recommendation: We recommend that the Agency ensure that all credit card reports and transactions are timely reviewed by supervisors to ensure proper compliance with federal grant requirements. Repeat Finding: No Questioned Costs: None Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.
Type of Finding: Significant Deficiency Criteria: 2 CFR Section 200.303 of the Uniform Guidance 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 credit card purchases, we noted that supervisor approvals of expense reports were not timely obtained. Specifically, we identified the following: Out of 25 credit card transactions tested during our financial statement audit procedures, we noted: 1 transaction did not have proper approvals on file, Approvals for 6 transactions occurred over 90 days after transaction dates, Approvals for 4 transactions occurred over 120 days after the transaction dates, Out of 25 credit card transactions tested during the single audit procedures (ALN #97.024), we noted: Approvals for 9 transactions occurred over 30 days after the transaction dates, Approvals for 8 transactions occurred over 90 days after the transaction dates Cause: Lack of timely review of credit card expense reports and transactions by supervisors for approval. Effect or potential effect: Noncompliance with federal award grants for disallowed costs or costs charged to grants without accurate supporting documentation. Additionally, credit card purchases run a higher risk for abuse if not timely reviewed. Recommendation: We recommend that the Agency ensure that all credit card reports and transactions are timely reviewed by supervisors to ensure proper compliance with federal grant requirements. Repeat Finding: No Questioned Costs: None Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.
Type of Finding: Significant Deficiency Criteria: 2 CFR Section 200.303 of the Uniform Guidance 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 credit card purchases, we noted that supervisor approvals of expense reports were not timely obtained. Specifically, we identified the following: Out of 25 credit card transactions tested during our financial statement audit procedures, we noted: 1 transaction did not have proper approvals on file, Approvals for 6 transactions occurred over 90 days after transaction dates, Approvals for 4 transactions occurred over 120 days after the transaction dates, Out of 25 credit card transactions tested during the single audit procedures (ALN #97.024), we noted: Approvals for 9 transactions occurred over 30 days after the transaction dates, Approvals for 8 transactions occurred over 90 days after the transaction dates Cause: Lack of timely review of credit card expense reports and transactions by supervisors for approval. Effect or potential effect: Noncompliance with federal award grants for disallowed costs or costs charged to grants without accurate supporting documentation. Additionally, credit card purchases run a higher risk for abuse if not timely reviewed. Recommendation: We recommend that the Agency ensure that all credit card reports and transactions are timely reviewed by supervisors to ensure proper compliance with federal grant requirements. Repeat Finding: No Questioned Costs: None Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.
Type of Finding: Significant Deficiency Criteria: 2 CFR Section 200.303 of the Uniform Guidance 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 credit card purchases, we noted that supervisor approvals of expense reports were not timely obtained. Specifically, we identified the following: Out of 25 credit card transactions tested during our financial statement audit procedures, we noted: 1 transaction did not have proper approvals on file, Approvals for 6 transactions occurred over 90 days after transaction dates, Approvals for 4 transactions occurred over 120 days after the transaction dates, Out of 25 credit card transactions tested during the single audit procedures (ALN #97.024), we noted: Approvals for 9 transactions occurred over 30 days after the transaction dates, Approvals for 8 transactions occurred over 90 days after the transaction dates Cause: Lack of timely review of credit card expense reports and transactions by supervisors for approval. Effect or potential effect: Noncompliance with federal award grants for disallowed costs or costs charged to grants without accurate supporting documentation. Additionally, credit card purchases run a higher risk for abuse if not timely reviewed. Recommendation: We recommend that the Agency ensure that all credit card reports and transactions are timely reviewed by supervisors to ensure proper compliance with federal grant requirements. Repeat Finding: No Questioned Costs: None Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.
Type of Finding: Significant Deficiency Criteria: 2 CFR Section 200.303 of the Uniform Guidance 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 credit card purchases, we noted that supervisor approvals of expense reports were not timely obtained. Specifically, we identified the following: Out of 25 credit card transactions tested during our financial statement audit procedures, we noted: 1 transaction did not have proper approvals on file, Approvals for 6 transactions occurred over 90 days after transaction dates, Approvals for 4 transactions occurred over 120 days after the transaction dates, Out of 25 credit card transactions tested during the single audit procedures (ALN #97.024), we noted: Approvals for 9 transactions occurred over 30 days after the transaction dates, Approvals for 8 transactions occurred over 90 days after the transaction dates Cause: Lack of timely review of credit card expense reports and transactions by supervisors for approval. Effect or potential effect: Noncompliance with federal award grants for disallowed costs or costs charged to grants without accurate supporting documentation. Additionally, credit card purchases run a higher risk for abuse if not timely reviewed. Recommendation: We recommend that the Agency ensure that all credit card reports and transactions are timely reviewed by supervisors to ensure proper compliance with federal grant requirements. Repeat Finding: No Questioned Costs: None Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.
Type of Finding: Significant Deficiency Criteria: 2 CFR Section 200.303 of the Uniform Guidance 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 credit card purchases, we noted that supervisor approvals of expense reports were not timely obtained. Specifically, we identified the following: Out of 25 credit card transactions tested during our financial statement audit procedures, we noted: 1 transaction did not have proper approvals on file, Approvals for 6 transactions occurred over 90 days after transaction dates, Approvals for 4 transactions occurred over 120 days after the transaction dates, Out of 25 credit card transactions tested during the single audit procedures (ALN #97.024), we noted: Approvals for 9 transactions occurred over 30 days after the transaction dates, Approvals for 8 transactions occurred over 90 days after the transaction dates Cause: Lack of timely review of credit card expense reports and transactions by supervisors for approval. Effect or potential effect: Noncompliance with federal award grants for disallowed costs or costs charged to grants without accurate supporting documentation. Additionally, credit card purchases run a higher risk for abuse if not timely reviewed. Recommendation: We recommend that the Agency ensure that all credit card reports and transactions are timely reviewed by supervisors to ensure proper compliance with federal grant requirements. Repeat Finding: No Questioned Costs: None Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.
FINDING 2023-002 Subject: Child Nutrition Cluster (CNC) – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs Audit Findings: Material Weakness Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards 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 terms and conditions of the Federal award. Condition: The School Corporation did not have adequate internal controls in place to ensure that the School Corporation complied with the allowable cost requirements. Cause: A proper system of internal control was not designed by management of the School Corporation that included a thorough review of expenditures charged to the grant. Effect: Without the proper implementation of an effectively designed system of internal controls, the control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs: There were no questioned costs identified. Context: During testing of vendor disbursements for the CNC program, we identified 9 disbursements in a sample of 60, for which there was no evidence of a formal documented review of the disbursement taking place prior to the disbursement. Additionally, during testing of CNC payroll disbursements, we selected 8 pay periods for controls testing and noted that none of the 8 pay periods had proof of a formal review of the payroll distribution prior to remittance. Identification as a repeat finding: Not a repeat finding. Recommendation: We recommend that management of the School Corporation establish a proper system of internal control to ensure that charges to the grant are formally reviewed for accuracy and allowability. Views of Responsible Officials and Planned Corrective Actions: For the views of the responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: Child Nutrition Cluster (CNC) – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs Audit Findings: Material Weakness Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards 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 terms and conditions of the Federal award. Condition: The School Corporation did not have adequate internal controls in place to ensure that the School Corporation complied with the allowable cost requirements. Cause: A proper system of internal control was not designed by management of the School Corporation that included a thorough review of expenditures charged to the grant. Effect: Without the proper implementation of an effectively designed system of internal controls, the control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs: There were no questioned costs identified. Context: During testing of vendor disbursements for the CNC program, we identified 9 disbursements in a sample of 60, for which there was no evidence of a formal documented review of the disbursement taking place prior to the disbursement. Additionally, during testing of CNC payroll disbursements, we selected 8 pay periods for controls testing and noted that none of the 8 pay periods had proof of a formal review of the payroll distribution prior to remittance. Identification as a repeat finding: Not a repeat finding. Recommendation: We recommend that management of the School Corporation establish a proper system of internal control to ensure that charges to the grant are formally reviewed for accuracy and allowability. Views of Responsible Officials and Planned Corrective Actions: For the views of the responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: Child Nutrition Cluster (CNC) – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs Audit Findings: Material Weakness Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards 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 terms and conditions of the Federal award. Condition: The School Corporation did not have adequate internal controls in place to ensure that the School Corporation complied with the allowable cost requirements. Cause: A proper system of internal control was not designed by management of the School Corporation that included a thorough review of expenditures charged to the grant. Effect: Without the proper implementation of an effectively designed system of internal controls, the control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs: There were no questioned costs identified. Context: During testing of vendor disbursements for the CNC program, we identified 9 disbursements in a sample of 60, for which there was no evidence of a formal documented review of the disbursement taking place prior to the disbursement. Additionally, during testing of CNC payroll disbursements, we selected 8 pay periods for controls testing and noted that none of the 8 pay periods had proof of a formal review of the payroll distribution prior to remittance. Identification as a repeat finding: Not a repeat finding. Recommendation: We recommend that management of the School Corporation establish a proper system of internal control to ensure that charges to the grant are formally reviewed for accuracy and allowability. Views of Responsible Officials and Planned Corrective Actions: For the views of the responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: Child Nutrition Cluster (CNC) – Noncompliance Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs Audit Findings: Material Weakness Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards 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 terms and conditions of the Federal award. Condition: The School Corporation did not have adequate internal controls in place to ensure that the School Corporation complied with the allowable cost requirements. Cause: A proper system of internal control was not designed by management of the School Corporation that included a thorough review of expenditures charged to the grant. Effect: Without the proper implementation of an effectively designed system of internal controls, the control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs: There was $2,882 of known questioned costs identified. Context: During our testing of the School Corporation’s compliance with the allowable costs requirements for CNC, we noted the following exceptions in our testing of 120 disbursements (60 vendor and 60 payroll): 1. The School Corporation paid $233 of sales tax across three vendor food purchases. 2. For two employee payroll selections, we were unable to trace their rate of pay to a Board approved wage rate ordinance or contract. The total amount paid out to the two employees was $2,635. 3. We identified one employee that the School Corporation incorrectly paid one hour more than what the timecard stated, resulting in an overpayment of $14. Identification as a repeat finding: Not a repeat finding. Recommendation: We recommend that management of the School Corporation establish a proper system of internal control to ensure that charges to the grant are formally reviewed for accuracy and allowability. Views of Responsible Officials and Planned Corrective Actions: For the views of the responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: Child Nutrition Cluster (CNC) – Noncompliance Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs Audit Findings: Material Weakness Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards 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 terms and conditions of the Federal award. Condition: The School Corporation did not have adequate internal controls in place to ensure that the School Corporation complied with the allowable cost requirements. Cause: A proper system of internal control was not designed by management of the School Corporation that included a thorough review of expenditures charged to the grant. Effect: Without the proper implementation of an effectively designed system of internal controls, the control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs: There was $2,882 of known questioned costs identified. Context: During our testing of the School Corporation’s compliance with the allowable costs requirements for CNC, we noted the following exceptions in our testing of 120 disbursements (60 vendor and 60 payroll): 1. The School Corporation paid $233 of sales tax across three vendor food purchases. 2. For two employee payroll selections, we were unable to trace their rate of pay to a Board approved wage rate ordinance or contract. The total amount paid out to the two employees was $2,635. 3. We identified one employee that the School Corporation incorrectly paid one hour more than what the timecard stated, resulting in an overpayment of $14. Identification as a repeat finding: Not a repeat finding. Recommendation: We recommend that management of the School Corporation establish a proper system of internal control to ensure that charges to the grant are formally reviewed for accuracy and allowability. Views of Responsible Officials and Planned Corrective Actions: For the views of the responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: Child Nutrition Cluster (CNC) – Noncompliance Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs Audit Findings: Material Weakness Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards 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 terms and conditions of the Federal award. Condition: The School Corporation did not have adequate internal controls in place to ensure that the School Corporation complied with the allowable cost requirements. Cause: A proper system of internal control was not designed by management of the School Corporation that included a thorough review of expenditures charged to the grant. Effect: Without the proper implementation of an effectively designed system of internal controls, the control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs: There was $2,882 of known questioned costs identified. Context: During our testing of the School Corporation’s compliance with the allowable costs requirements for CNC, we noted the following exceptions in our testing of 120 disbursements (60 vendor and 60 payroll): 1. The School Corporation paid $233 of sales tax across three vendor food purchases. 2. For two employee payroll selections, we were unable to trace their rate of pay to a Board approved wage rate ordinance or contract. The total amount paid out to the two employees was $2,635. 3. We identified one employee that the School Corporation incorrectly paid one hour more than what the timecard stated, resulting in an overpayment of $14. Identification as a repeat finding: Not a repeat finding. Recommendation: We recommend that management of the School Corporation establish a proper system of internal control to ensure that charges to the grant are formally reviewed for accuracy and allowability. Views of Responsible Officials and Planned Corrective Actions: For the views of the responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: Child Nutrition Cluster (CNC) – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Eligibility compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: During testing of eligibility, we noted that a formal documented control for the review of online student applications was not in place. Management indicated that the free and reduced parameters are updated annually in the Titan system, however, there was no documented review that the updated parameters were reviewed. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and Eligibility compliance requirements. Views of Responsible Officials and Planned Corrective Actions: For the views of the responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: Child Nutrition Cluster (CNC) – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Eligibility compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: During testing of eligibility, we noted that a formal documented control for the review of online student applications was not in place. Management indicated that the free and reduced parameters are updated annually in the Titan system, however, there was no documented review that the updated parameters were reviewed. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and Eligibility compliance requirements. Views of Responsible Officials and Planned Corrective Actions: For the views of the responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: Child Nutrition Cluster (CNC) – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Eligibility compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: During testing of eligibility, we noted that a formal documented control for the review of online student applications was not in place. Management indicated that the free and reduced parameters are updated annually in the Titan system, however, there was no documented review that the updated parameters were reviewed. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and Eligibility compliance requirements. Views of Responsible Officials and Planned Corrective Actions: For the views of the responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: Child Nutrition Cluster (CNC) – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There was $27 of questioned costs identified. Context: During testing of reporting, we identified a control breakdown in the claim submission process. Although student meal data is summarized at the school level and reviewed by both the Food Services Bookkeeper and the Food Services Director, there is not a review of the actual claim submission prior to being submitted to the portal. Due to the breakdown in controls, we identified that the October 2022 revision claim overstated breakfasts served by 10 meals. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and Reporting compliance requirements. Views of Responsible Officials and Planned Corrective Actions: For the views of the responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: Child Nutrition Cluster (CNC) – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There was $27 of questioned costs identified. Context: During testing of reporting, we identified a control breakdown in the claim submission process. Although student meal data is summarized at the school level and reviewed by both the Food Services Bookkeeper and the Food Services Director, there is not a review of the actual claim submission prior to being submitted to the portal. Due to the breakdown in controls, we identified that the October 2022 revision claim overstated breakfasts served by 10 meals. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and Reporting compliance requirements. Views of Responsible Officials and Planned Corrective Actions: For the views of the responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: Child Nutrition Cluster (CNC) – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There was $27 of questioned costs identified. Context: During testing of reporting, we identified a control breakdown in the claim submission process. Although student meal data is summarized at the school level and reviewed by both the Food Services Bookkeeper and the Food Services Director, there is not a review of the actual claim submission prior to being submitted to the portal. Due to the breakdown in controls, we identified that the October 2022 revision claim overstated breakfasts served by 10 meals. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and Reporting compliance requirements. Views of Responsible Officials and Planned Corrective Actions: For the views of the responsible officials, refer to the Corrective Action Plan that is part of this report.
U.S. Department of Health and Human Services Federal Financial Assistance Listing Number 93.829 Section 223 Demonstration Programs to Improve Community Mental Health Services ‐ 6H79SM083306‐01M002 Procurement and Suspension and Debarment Significant Deficiency in Internal Control over Compliance Criteria: The Uniform Guidance, Section 200.303 Internal Controls, requires the non‐federal entity must establish and maintain effective internal controls over federal awards that provide reasonable assurance that awards are being managed in compliance with federal statutes, regulations and the terms and conditions of the federal award. The non‐Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non‐ Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.318 through 200.327. Condition: The Organization did not have a written procurement policy that was consistent with Federal, State, local, and tribal laws and regulations. Cause: There is a lack of controls over the written procurement, suspension and debarment policy. Effect: Failure to maintain a written procurement policy that was consistent with Federal, State, local, and tribal laws and regulations may result in disallowed costs. Questioned Costs: None. Context/Sampling: EB reviewed the procurement, suspension and debarment policy. Repeat Finding from Prior Year(s): Yes. Recommendation: We recommend that management implement a written procurement, suspension and debarment policy that meets Federal, State, local, and tribal laws and regulations. We also recommend that management review this policy regularly to confirm that it meets the requirements. Views of Responsible Individuals: Management agrees with the finding.
2023 – 002: Special Tests and Provisions Federal Agency: U.S Department Education Federal Program Name: Education Stabilization Funds Assistance Listing Number: 84.425D, 84.425U Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D200013, S425D210013, S425U210013 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters Criteria or specific requirement: Per 2 CFR 200.303, "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ‘Standards for Internal Control in the Federal Government’ issued by the Comptroller General of the United States or the ‘Internal Control Integrated Framework’ issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). If governors, SEAs, and or subrecipients propose to use ESF funds for construction they must also comply with applicable requirements in 34 CFR section 76.600 and 34 CFR sections 75.600–617. Approved construction projects must comply with all other applicable Uniform Guidance requirements, as well as the ED’s regulations regarding construction, as applicable, at 34 CFR section 76.600. As is the case with all construction contracts using laborers and mechanics financed by federal education funds, recipients and subrecipients that use ESF funds for construction contracts over $2,000 must meet Davis-Bacon prevailing wage requirements. Condition: PLA did not verify compliance with prevailing wage requirements with subcontractors for construction projects financed by federal education funds. Questioned costs: $342,069. Context: 2 of 2 construction projects financed by federal education funds were subject to prevailing wage requirements. Cause: PLA was not familiar with using federal education funds for construction costs and were not aware of the prevailing wage requirements Effect: Laborers and mechanics paid by subcontractors may have been paid below prevailing wage rates. Repeat Finding: No. Recommendation: We recommend that for future construction contracts financed by federal education funds PLA verify that subcontractors comply with prevailing wage requirements. Views of responsible officials: There is no disagreement with the audit finding.
2023 – 002: Special Tests and Provisions Federal Agency: U.S Department Education Federal Program Name: Education Stabilization Funds Assistance Listing Number: 84.425D, 84.425U Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D200013, S425D210013, S425U210013 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters Criteria or specific requirement: Per 2 CFR 200.303, "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ‘Standards for Internal Control in the Federal Government’ issued by the Comptroller General of the United States or the ‘Internal Control Integrated Framework’ issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). If governors, SEAs, and or subrecipients propose to use ESF funds for construction they must also comply with applicable requirements in 34 CFR section 76.600 and 34 CFR sections 75.600–617. Approved construction projects must comply with all other applicable Uniform Guidance requirements, as well as the ED’s regulations regarding construction, as applicable, at 34 CFR section 76.600. As is the case with all construction contracts using laborers and mechanics financed by federal education funds, recipients and subrecipients that use ESF funds for construction contracts over $2,000 must meet Davis-Bacon prevailing wage requirements. Condition: PLA did not verify compliance with prevailing wage requirements with subcontractors for construction projects financed by federal education funds. Questioned costs: $342,069. Context: 2 of 2 construction projects financed by federal education funds were subject to prevailing wage requirements. Cause: PLA was not familiar with using federal education funds for construction costs and were not aware of the prevailing wage requirements Effect: Laborers and mechanics paid by subcontractors may have been paid below prevailing wage rates. Repeat Finding: No. Recommendation: We recommend that for future construction contracts financed by federal education funds PLA verify that subcontractors comply with prevailing wage requirements. Views of responsible officials: There is no disagreement with the audit finding.
FINDING 2023-003 Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): SY22, SY23 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Eligibility, Special Tests and Provisions - Verification of Free and Reduced Price Applications (NSLP), Special Tests and Provisions - Non-Profit School Food Service Accounts Audit Finding: Material Weakness Condition and Context The School Corporation had not established effective internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance. Eligibility The School Corporation's policy is to have the Treasurer review and initial paper applications processed by the individual school treasurers to ensure that the eligibility determination was correct. However, six of the ten applications tested lacked documentation of this review. In addition, there was no internal control in place over applications submitted online. INDIANA STATE BOARD OF ACCOUNTS 18 BORDEN-HENRYVILLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Special Tests and Provisions - Verification of Free and Reduced Price Applications (NSLP) The Treasurer performed the verification of free and reduced price applications without a documented review or oversight process in place to ensure that applications selected for verification were in compliance with requirements related to the program. Special Tests and Provisions - Non-Profit School Food Service Accounts The School Corporation did not have an internal control in place to ensure that reimbursements for meals served were properly credited to the School Lunch fund. The lack of internal controls for Eligibility and Special Tests and Provisions - Verification of Free and Reduced Price Applications (NSLP) was isolated to the second year of the audit period. The lack of internal controls over Special Tests and Provisions - School Food Accounts was systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper 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. INDIANA STATE BOARD OF ACCOUNTS 19 BORDEN-HENRYVILLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. INDIANA STATE BOARD OF ACCOUNTS 20