2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy Utah Tech University (Finding Type: Significant Deficiency) Federal Agency: Department of Education Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid 84.425F HEERF Institutional Aid Federal Award Number: P425E201701, P425F201626, and P425M200131 Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports. The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions. Recommendation: We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy. University’s Response: We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy Utah Tech University (Finding Type: Significant Deficiency) Federal Agency: Department of Education Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid 84.425F HEERF Institutional Aid Federal Award Number: P425E201701, P425F201626, and P425M200131 Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports. The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions. Recommendation: We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy. University’s Response: We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy Utah Tech University (Finding Type: Significant Deficiency) Federal Agency: Department of Education Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid 84.425F HEERF Institutional Aid Federal Award Number: P425E201701, P425F201626, and P425M200131 Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports. The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions. Recommendation: We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy. University’s Response: We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy Utah Tech University (Finding Type: Significant Deficiency) Federal Agency: Department of Education Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid 84.425F HEERF Institutional Aid Federal Award Number: P425E201701, P425F201626, and P425M200131 Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports. The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions. Recommendation: We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy. University’s Response: We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy Utah Tech University (Finding Type: Significant Deficiency) Federal Agency: Department of Education Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid 84.425F HEERF Institutional Aid Federal Award Number: P425E201701, P425F201626, and P425M200131 Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports. The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions. Recommendation: We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy. University’s Response: We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy Utah Tech University (Finding Type: Significant Deficiency) Federal Agency: Department of Education Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid 84.425F HEERF Institutional Aid Federal Award Number: P425E201701, P425F201626, and P425M200131 Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports. The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions. Recommendation: We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy. University’s Response: We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy Utah Tech University (Finding Type: Significant Deficiency) Federal Agency: Department of Education Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid 84.425F HEERF Institutional Aid Federal Award Number: P425E201701, P425F201626, and P425M200131 Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports. The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions. Recommendation: We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy. University’s Response: We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy Utah Tech University (Finding Type: Significant Deficiency) Federal Agency: Department of Education Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid 84.425F HEERF Institutional Aid Federal Award Number: P425E201701, P425F201626, and P425M200131 Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports. The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions. Recommendation: We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy. University’s Response: We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy Utah Tech University (Finding Type: Significant Deficiency) Federal Agency: Department of Education Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid 84.425F HEERF Institutional Aid Federal Award Number: P425E201701, P425F201626, and P425M200131 Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports. The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions. Recommendation: We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy. University’s Response: We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy Utah Tech University (Finding Type: Significant Deficiency) Federal Agency: Department of Education Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid 84.425F HEERF Institutional Aid Federal Award Number: P425E201701, P425F201626, and P425M200131 Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports. The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions. Recommendation: We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy. University’s Response: We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy Utah Tech University (Finding Type: Significant Deficiency) Federal Agency: Department of Education Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid 84.425F HEERF Institutional Aid Federal Award Number: P425E201701, P425F201626, and P425M200131 Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports. The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions. Recommendation: We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy. University’s Response: We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-004. Higher Education Emergency Relief Fund Quarterly Reports Not Reviewed for Accuracy Utah Tech University (Finding Type: Significant Deficiency) Federal Agency: Department of Education Assistance Listing Number and Title: 84.425E Higher Education Emergency Relief Fund (HEERF) Student Aid 84.425F HEERF Institutional Aid Federal Award Number: P425E201701, P425F201626, and P425M200131 Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University did not have a control procedure in place to ensure that its Higher Education Emergency Relief Fund (HEERF) quarterly reports were reviewed for accuracy. Federal regulations (2 CFR 200.303) require that entities “establish and maintain effective internal control…that provides reasonable assurance that the … entity is managing the Federal award in compliance with…terms and conditions of the Federal award.” However, University personnel did not subject the reports to a review and approval process because they did not realize the requirements applied to HEERF quarterly reports. The University should be aware that effective control requirements apply to all federally required reports. Lack of proper controls may result in inaccurate information to be reported without detection that may lead users to reach inappropriate conclusions and make improper decisions. Recommendation: We recommend that the University ensure all required reports of federal financial assistance programs are reviewed to ensure accuracy. University’s Response: We agree with the finding that there should have been secondary internal review of the quarterly HEERF reports. However, it should also be noted that the quarterly reports were carefully reconciled to ensure agreement with the University’s financial ledgers, and the underlying ledger transactions were subject to all pertinent internal controls and approval processes.
2023-007. Noncompliance with Required Audit of MCO Encounter and Financial Data Utah Department of Health and Human Services (Finding Type: Significant Deficiency and Reportable Noncompliance) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: 97.778 Medicaid Assistance Program (Medicaid Title XIX) Federal Award Number: Various Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: 2022-009 DHHS did not have a well-established process of recording or reviewing independent periodic audits of encounter and financial data for managed care organizations (MCO) as required in Federal regulation 42 CFR 438.602(e) & (g). Per Federal regulation (2 CFR 200.303), non-federal entities must “establish and maintain effective internal controls over the Federal award that provide reasonable assurance that the non-Federal entity is managing the Federal award in compliance with…terms and conditions of the federal awards.” DHHS performs periodic audits of all MCO Medical Loss Ratio (MLR) reports, and they incorrectly believed that the control they had in place was sufficient. The audits of MLR reports were found not to be independent audits of encounter and financial data as DHHS assumed. Therefore, there was no control or compliance occurring for the required audits. For fiscal year 2023 they started to implement corrections to contract out the periodic audits to a third-party auditor, but these audits were not yet complete. Recommendations: We recommend DHHS finish establishing a process to perform and post independent periodic audits as directed by Federal regulation 42 CFR 438.602(e) & (g) and establish an effective internal control over this new process. DHHS’s Response The Division of Integrated Healthcare (DIH), Office of Managed Healthcare (OMH) agrees with this finding and recommendation.
2023-007. Noncompliance with Required Audit of MCO Encounter and Financial Data Utah Department of Health and Human Services (Finding Type: Significant Deficiency and Reportable Noncompliance) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: 97.778 Medicaid Assistance Program (Medicaid Title XIX) Federal Award Number: Various Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: 2022-009 DHHS did not have a well-established process of recording or reviewing independent periodic audits of encounter and financial data for managed care organizations (MCO) as required in Federal regulation 42 CFR 438.602(e) & (g). Per Federal regulation (2 CFR 200.303), non-federal entities must “establish and maintain effective internal controls over the Federal award that provide reasonable assurance that the non-Federal entity is managing the Federal award in compliance with…terms and conditions of the federal awards.” DHHS performs periodic audits of all MCO Medical Loss Ratio (MLR) reports, and they incorrectly believed that the control they had in place was sufficient. The audits of MLR reports were found not to be independent audits of encounter and financial data as DHHS assumed. Therefore, there was no control or compliance occurring for the required audits. For fiscal year 2023 they started to implement corrections to contract out the periodic audits to a third-party auditor, but these audits were not yet complete. Recommendations: We recommend DHHS finish establishing a process to perform and post independent periodic audits as directed by Federal regulation 42 CFR 438.602(e) & (g) and establish an effective internal control over this new process. DHHS’s Response The Division of Integrated Healthcare (DIH), Office of Managed Healthcare (OMH) agrees with this finding and recommendation.
2023-007. Noncompliance with Required Audit of MCO Encounter and Financial Data Utah Department of Health and Human Services (Finding Type: Significant Deficiency and Reportable Noncompliance) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: 97.778 Medicaid Assistance Program (Medicaid Title XIX) Federal Award Number: Various Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: 2022-009 DHHS did not have a well-established process of recording or reviewing independent periodic audits of encounter and financial data for managed care organizations (MCO) as required in Federal regulation 42 CFR 438.602(e) & (g). Per Federal regulation (2 CFR 200.303), non-federal entities must “establish and maintain effective internal controls over the Federal award that provide reasonable assurance that the non-Federal entity is managing the Federal award in compliance with…terms and conditions of the federal awards.” DHHS performs periodic audits of all MCO Medical Loss Ratio (MLR) reports, and they incorrectly believed that the control they had in place was sufficient. The audits of MLR reports were found not to be independent audits of encounter and financial data as DHHS assumed. Therefore, there was no control or compliance occurring for the required audits. For fiscal year 2023 they started to implement corrections to contract out the periodic audits to a third-party auditor, but these audits were not yet complete. Recommendations: We recommend DHHS finish establishing a process to perform and post independent periodic audits as directed by Federal regulation 42 CFR 438.602(e) & (g) and establish an effective internal control over this new process. DHHS’s Response The Division of Integrated Healthcare (DIH), Office of Managed Healthcare (OMH) agrees with this finding and recommendation.
2023-007. Noncompliance with Required Audit of MCO Encounter and Financial Data Utah Department of Health and Human Services (Finding Type: Significant Deficiency and Reportable Noncompliance) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: 97.778 Medicaid Assistance Program (Medicaid Title XIX) Federal Award Number: Various Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: 2022-009 DHHS did not have a well-established process of recording or reviewing independent periodic audits of encounter and financial data for managed care organizations (MCO) as required in Federal regulation 42 CFR 438.602(e) & (g). Per Federal regulation (2 CFR 200.303), non-federal entities must “establish and maintain effective internal controls over the Federal award that provide reasonable assurance that the non-Federal entity is managing the Federal award in compliance with…terms and conditions of the federal awards.” DHHS performs periodic audits of all MCO Medical Loss Ratio (MLR) reports, and they incorrectly believed that the control they had in place was sufficient. The audits of MLR reports were found not to be independent audits of encounter and financial data as DHHS assumed. Therefore, there was no control or compliance occurring for the required audits. For fiscal year 2023 they started to implement corrections to contract out the periodic audits to a third-party auditor, but these audits were not yet complete. Recommendations: We recommend DHHS finish establishing a process to perform and post independent periodic audits as directed by Federal regulation 42 CFR 438.602(e) & (g) and establish an effective internal control over this new process. DHHS’s Response The Division of Integrated Healthcare (DIH), Office of Managed Healthcare (OMH) agrees with this finding and recommendation.
2023-010. Pharmacy Rebate Invoices Not Checked for Accuracy and Timeliness Utah Department of Health and Human Services (Finding Type: Significant Deficiency) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: 93.778 Medicaid Assistance Program Federal Award Number: Various Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A Pharmacy rebates invoiced quarterly in fiscal year 2023 were not reviewed to ensure invoices are accurate and sent in a timely manner within 60 days after the end of the quarter. According to Federal regulation 2 CFR 200.303, non-federal entities must “establish and maintain effective internal controls over the Federal award that provide 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 awards.” Although DHHS had sufficient internal controls over rebates in prior years, the control deficiency was a result of staff turnover during the year, combined with inadequate communication and training of the new staff. Lack of review may result in pharmacy invoices not sent in accordance with federal guidance. Recommendations: We recommend that controls be reinstated, and that the responsible employee be given proper training to correctly determine whether pharmacy rebates are reviewed for accuracy and timeliness. DHHS’s Response: The Division of Integrated Healthcare (DIH), Office of Financial Services (OFS) agrees with this finding and recommendation.
2023-010. Pharmacy Rebate Invoices Not Checked for Accuracy and Timeliness Utah Department of Health and Human Services (Finding Type: Significant Deficiency) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: 93.778 Medicaid Assistance Program Federal Award Number: Various Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A Pharmacy rebates invoiced quarterly in fiscal year 2023 were not reviewed to ensure invoices are accurate and sent in a timely manner within 60 days after the end of the quarter. According to Federal regulation 2 CFR 200.303, non-federal entities must “establish and maintain effective internal controls over the Federal award that provide 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 awards.” Although DHHS had sufficient internal controls over rebates in prior years, the control deficiency was a result of staff turnover during the year, combined with inadequate communication and training of the new staff. Lack of review may result in pharmacy invoices not sent in accordance with federal guidance. Recommendations: We recommend that controls be reinstated, and that the responsible employee be given proper training to correctly determine whether pharmacy rebates are reviewed for accuracy and timeliness. DHHS’s Response: The Division of Integrated Healthcare (DIH), Office of Financial Services (OFS) agrees with this finding and recommendation.
2023-010. Pharmacy Rebate Invoices Not Checked for Accuracy and Timeliness Utah Department of Health and Human Services (Finding Type: Significant Deficiency) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: 93.778 Medicaid Assistance Program Federal Award Number: Various Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A Pharmacy rebates invoiced quarterly in fiscal year 2023 were not reviewed to ensure invoices are accurate and sent in a timely manner within 60 days after the end of the quarter. According to Federal regulation 2 CFR 200.303, non-federal entities must “establish and maintain effective internal controls over the Federal award that provide 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 awards.” Although DHHS had sufficient internal controls over rebates in prior years, the control deficiency was a result of staff turnover during the year, combined with inadequate communication and training of the new staff. Lack of review may result in pharmacy invoices not sent in accordance with federal guidance. Recommendations: We recommend that controls be reinstated, and that the responsible employee be given proper training to correctly determine whether pharmacy rebates are reviewed for accuracy and timeliness. DHHS’s Response: The Division of Integrated Healthcare (DIH), Office of Financial Services (OFS) agrees with this finding and recommendation.
2023-010. Pharmacy Rebate Invoices Not Checked for Accuracy and Timeliness Utah Department of Health and Human Services (Finding Type: Significant Deficiency) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: 93.778 Medicaid Assistance Program Federal Award Number: Various Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A Pharmacy rebates invoiced quarterly in fiscal year 2023 were not reviewed to ensure invoices are accurate and sent in a timely manner within 60 days after the end of the quarter. According to Federal regulation 2 CFR 200.303, non-federal entities must “establish and maintain effective internal controls over the Federal award that provide 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 awards.” Although DHHS had sufficient internal controls over rebates in prior years, the control deficiency was a result of staff turnover during the year, combined with inadequate communication and training of the new staff. Lack of review may result in pharmacy invoices not sent in accordance with federal guidance. Recommendations: We recommend that controls be reinstated, and that the responsible employee be given proper training to correctly determine whether pharmacy rebates are reviewed for accuracy and timeliness. DHHS’s Response: The Division of Integrated Healthcare (DIH), Office of Financial Services (OFS) agrees with this finding and recommendation.
2023-005. Foster Care Eligibility Reviews Not Adequately Completed Utah Department of Health and Human Services (Finding Type: Material Internal Control Weakness) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: 93.658 Foster Care Title IV-E Federal Award Number: 2201UTFOST 2301UTFOST Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: 2022-006 For 17 of 60 (28%) cases reviewed, there was no evidence that DHHS had reviewed the initial Title IV-E Foster Care eligibility decisions. Federal regulation 2 CFR 200.303 requires that “the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” In response to a prior year audit finding, DHHS hired an employee in January 2023 to complete the review of eligibility determination. However, the review only covered new cases initiated during the current year, but not the existing cases initiated in prior years. These existing cases have never been reviewed to ensure proper eligibility decisions were made. However, benefit payments were incurred and paid during the year. Given the large number of cases requiring eligibility decisions the current team receives, the control was not properly designed and implemented to complete these reviews in a timely manner. Unreviewed or untimely reviews of eligibility decisions could lead to improper eligibility determinations and inappropriate benefit payments. Recommendations: We recommend DHHS allocate sufficient resources to expand the existing review or modify the control to ensure eligibility decisions are reviewed in a timely manner. DHHS’s Response The department acknowledges the need for continuous effort on the internal control assessment and reasonable implementation for this area. Procedures exist and review was performed to assist with proper IV-E eligibility determination.
2023-005. Foster Care Eligibility Reviews Not Adequately Completed Utah Department of Health and Human Services (Finding Type: Material Internal Control Weakness) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: 93.658 Foster Care Title IV-E Federal Award Number: 2201UTFOST 2301UTFOST Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: 2022-006 For 17 of 60 (28%) cases reviewed, there was no evidence that DHHS had reviewed the initial Title IV-E Foster Care eligibility decisions. Federal regulation 2 CFR 200.303 requires that “the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” In response to a prior year audit finding, DHHS hired an employee in January 2023 to complete the review of eligibility determination. However, the review only covered new cases initiated during the current year, but not the existing cases initiated in prior years. These existing cases have never been reviewed to ensure proper eligibility decisions were made. However, benefit payments were incurred and paid during the year. Given the large number of cases requiring eligibility decisions the current team receives, the control was not properly designed and implemented to complete these reviews in a timely manner. Unreviewed or untimely reviews of eligibility decisions could lead to improper eligibility determinations and inappropriate benefit payments. Recommendations: We recommend DHHS allocate sufficient resources to expand the existing review or modify the control to ensure eligibility decisions are reviewed in a timely manner. DHHS’s Response The department acknowledges the need for continuous effort on the internal control assessment and reasonable implementation for this area. Procedures exist and review was performed to assist with proper IV-E eligibility determination.
2023-006. Lack of Controls over Food Benefit Payments Utah Department of Health and Human Services (Finding Type: Material Internal Control Weakness) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: 10.557 Women Infants & Children Federal Award Number: Various Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A DHHS did not verify food benefit expenditure detail received from its third-party service organization, along with request for reimbursing program funds, to ensure expenditures were made for allowable activities and costs before making payment. Federal regulation 2 CFR 200.303 states that “the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” DHHS has controls in place to ensure that benefit distribution information, such as eligible participants and food plans, is properly sent to its third-party service organization. However, DHHS did not verify the third-party service organization’s expenditure details to ensure that benefit payments made were in compliance with the allowable costs and allowable activities requirements before reimbursement. As a result, inaccurate, incomplete, or false payments may be paid without detection. Recommendations: We recommend DHHS establish a system of reviewing its third-party service organization’s expenditure details to ensure that program funds are paid for allowable activities and costs. DHHS’s Response: The department recognizes the need to review food benefit expenditure information received from the WIC third-party host processing vendor. WIC procedures are established which support proper performance for food benefit redemption.
FINDING 2023-002 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.42U 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, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. 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 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation paid for equipment totaling $842,161 with its COVID-19 - Education Stabilization Fund grant award; however, only equipment with a cost of $215,720 could be identified in the asset listing provided. In addition, the School Corporation capital asset records were incomplete and did not include all the required information. The asset listing did not always include the 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. Finally, the School Corporation did not complete a capital asset inventory every two years as required. 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 the property in good condition. . . ." INDIANA STATE BOARD OF ACCOUNTS 19 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. As a result, asset records were incomplete, and a physical inventory was not taken. 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 and an inventory is taken every two years. 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 - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.42U 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, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. 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 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation paid for equipment totaling $842,161 with its COVID-19 - Education Stabilization Fund grant award; however, only equipment with a cost of $215,720 could be identified in the asset listing provided. In addition, the School Corporation capital asset records were incomplete and did not include all the required information. The asset listing did not always include the 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. Finally, the School Corporation did not complete a capital asset inventory every two years as required. 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 the property in good condition. . . ." INDIANA STATE BOARD OF ACCOUNTS 19 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. As a result, asset records were incomplete, and a physical inventory was not taken. 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 and an inventory is taken every two years. 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 - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.42U 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, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. 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 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation paid for equipment totaling $842,161 with its COVID-19 - Education Stabilization Fund grant award; however, only equipment with a cost of $215,720 could be identified in the asset listing provided. In addition, the School Corporation capital asset records were incomplete and did not include all the required information. The asset listing did not always include the 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. Finally, the School Corporation did not complete a capital asset inventory every two years as required. 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 the property in good condition. . . ." INDIANA STATE BOARD OF ACCOUNTS 19 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. As a result, asset records were incomplete, and a physical inventory was not taken. 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 and an inventory is taken every two years. 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 - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.42U 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, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. 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 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation paid for equipment totaling $842,161 with its COVID-19 - Education Stabilization Fund grant award; however, only equipment with a cost of $215,720 could be identified in the asset listing provided. In addition, the School Corporation capital asset records were incomplete and did not include all the required information. The asset listing did not always include the 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. Finally, the School Corporation did not complete a capital asset inventory every two years as required. 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 the property in good condition. . . ." INDIANA STATE BOARD OF ACCOUNTS 19 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. As a result, asset records were incomplete, and a physical inventory was not taken. 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 and an inventory is taken every two years. 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 - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.42U 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, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. 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 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation paid for equipment totaling $842,161 with its COVID-19 - Education Stabilization Fund grant award; however, only equipment with a cost of $215,720 could be identified in the asset listing provided. In addition, the School Corporation capital asset records were incomplete and did not include all the required information. The asset listing did not always include the 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. Finally, the School Corporation did not complete a capital asset inventory every two years as required. 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 the property in good condition. . . ." INDIANA STATE BOARD OF ACCOUNTS 19 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. As a result, asset records were incomplete, and a physical inventory was not taken. 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 and an inventory is taken every two years. 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 - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.42U 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, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. 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 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation paid for equipment totaling $842,161 with its COVID-19 - Education Stabilization Fund grant award; however, only equipment with a cost of $215,720 could be identified in the asset listing provided. In addition, the School Corporation capital asset records were incomplete and did not include all the required information. The asset listing did not always include the 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. Finally, the School Corporation did not complete a capital asset inventory every two years as required. 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 the property in good condition. . . ." INDIANA STATE BOARD OF ACCOUNTS 19 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. As a result, asset records were incomplete, and a physical inventory was not taken. 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 and an inventory is taken every two years. 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 - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-004. INDIANA STATE BOARD OF ACCOUNTS 20 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit an annual data report to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports; however, a single employee prepared and submitted the reports without a review or oversight process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include appropriate segregation of duties. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. INDIANA STATE BOARD OF ACCOUNTS 21 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-004. INDIANA STATE BOARD OF ACCOUNTS 20 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit an annual data report to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports; however, a single employee prepared and submitted the reports without a review or oversight process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include appropriate segregation of duties. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. INDIANA STATE BOARD OF ACCOUNTS 21 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-004. INDIANA STATE BOARD OF ACCOUNTS 20 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit an annual data report to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports; however, a single employee prepared and submitted the reports without a review or oversight process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include appropriate segregation of duties. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. INDIANA STATE BOARD OF ACCOUNTS 21 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-004. INDIANA STATE BOARD OF ACCOUNTS 20 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit an annual data report to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports; however, a single employee prepared and submitted the reports without a review or oversight process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include appropriate segregation of duties. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. INDIANA STATE BOARD OF ACCOUNTS 21 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-004. INDIANA STATE BOARD OF ACCOUNTS 20 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit an annual data report to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports; however, a single employee prepared and submitted the reports without a review or oversight process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include appropriate segregation of duties. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. INDIANA STATE BOARD OF ACCOUNTS 21 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-004. INDIANA STATE BOARD OF ACCOUNTS 20 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit an annual data report to the Indiana Department of Education via JotForm, a form/report builder. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted two ESSER I reports, two ESSER II reports, and two ESSER III reports, for a total of six reports; however, a single employee prepared and submitted the reports without a review or oversight process in place to prevent, or detect and correct, errors. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include appropriate segregation of duties. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. INDIANA STATE BOARD OF ACCOUNTS 21 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2021-2022, 2022-2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context A cash reimbursement is provided to the School Corporation based on meals served under the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. The cash reimbursement is to be used for the benefit of the food service program. The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. There was no documented internal control in place over payroll claims to ensure that payroll charged to the grant was reviewed and approved by an individual knowledgeable about the cost principles. In addition, pay rates could not be tied directly to the salary ordinance for 4 of the 40 payroll payments tested. Timecards were provided which substantiated the hours worked; however, the hourly rate at which the employees were paid could not be tied to the salary ordinance or other internal records provided. The hourly rates paid to these four employees did not differ significantly from the rates documented in the salary ordinances. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 22 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: . . . (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 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: (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. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 23 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. As a result, payroll disbursements identified above could not be tied to an approved salary. 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 design and implement a proper system of internal controls, including policies and procedures that would ensure that employees charged to the grant are paid the approved rate of pay. 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: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2021-2022, 2022-2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context A cash reimbursement is provided to the School Corporation based on meals served under the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. The cash reimbursement is to be used for the benefit of the food service program. The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. There was no documented internal control in place over payroll claims to ensure that payroll charged to the grant was reviewed and approved by an individual knowledgeable about the cost principles. In addition, pay rates could not be tied directly to the salary ordinance for 4 of the 40 payroll payments tested. Timecards were provided which substantiated the hours worked; however, the hourly rate at which the employees were paid could not be tied to the salary ordinance or other internal records provided. The hourly rates paid to these four employees did not differ significantly from the rates documented in the salary ordinances. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 22 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: . . . (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 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: (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. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 23 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. As a result, payroll disbursements identified above could not be tied to an approved salary. 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 design and implement a proper system of internal controls, including policies and procedures that would ensure that employees charged to the grant are paid the approved rate of pay. 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: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2021-2022, 2022-2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context A cash reimbursement is provided to the School Corporation based on meals served under the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. The cash reimbursement is to be used for the benefit of the food service program. The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. There was no documented internal control in place over payroll claims to ensure that payroll charged to the grant was reviewed and approved by an individual knowledgeable about the cost principles. In addition, pay rates could not be tied directly to the salary ordinance for 4 of the 40 payroll payments tested. Timecards were provided which substantiated the hours worked; however, the hourly rate at which the employees were paid could not be tied to the salary ordinance or other internal records provided. The hourly rates paid to these four employees did not differ significantly from the rates documented in the salary ordinances. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 22 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: . . . (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 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: (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. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 23 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. As a result, payroll disbursements identified above could not be tied to an approved salary. 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 design and implement a proper system of internal controls, including policies and procedures that would ensure that employees charged to the grant are paid the approved rate of pay. 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: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2021-2022, 2022-2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context A cash reimbursement is provided to the School Corporation based on meals served under the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. The cash reimbursement is to be used for the benefit of the food service program. The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. There was no documented internal control in place over payroll claims to ensure that payroll charged to the grant was reviewed and approved by an individual knowledgeable about the cost principles. In addition, pay rates could not be tied directly to the salary ordinance for 4 of the 40 payroll payments tested. Timecards were provided which substantiated the hours worked; however, the hourly rate at which the employees were paid could not be tied to the salary ordinance or other internal records provided. The hourly rates paid to these four employees did not differ significantly from the rates documented in the salary ordinances. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 22 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: . . . (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 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: (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. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 23 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. As a result, payroll disbursements identified above could not be tied to an approved salary. 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 design and implement a proper system of internal controls, including policies and procedures that would ensure that employees charged to the grant are paid the approved rate of pay. 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: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2021-2022, 2022-2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context A cash reimbursement is provided to the School Corporation based on meals served under the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. The cash reimbursement is to be used for the benefit of the food service program. The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. There was no documented internal control in place over payroll claims to ensure that payroll charged to the grant was reviewed and approved by an individual knowledgeable about the cost principles. In addition, pay rates could not be tied directly to the salary ordinance for 4 of the 40 payroll payments tested. Timecards were provided which substantiated the hours worked; however, the hourly rate at which the employees were paid could not be tied to the salary ordinance or other internal records provided. The hourly rates paid to these four employees did not differ significantly from the rates documented in the salary ordinances. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 22 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: . . . (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 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: (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. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 23 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. As a result, payroll disbursements identified above could not be tied to an approved salary. 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 design and implement a proper system of internal controls, including policies and procedures that would ensure that employees charged to the grant are paid the approved rate of pay. 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: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2021-2022, 2022-2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context A cash reimbursement is provided to the School Corporation based on meals served under the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. The cash reimbursement is to be used for the benefit of the food service program. The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. There was no documented internal control in place over payroll claims to ensure that payroll charged to the grant was reviewed and approved by an individual knowledgeable about the cost principles. In addition, pay rates could not be tied directly to the salary ordinance for 4 of the 40 payroll payments tested. Timecards were provided which substantiated the hours worked; however, the hourly rate at which the employees were paid could not be tied to the salary ordinance or other internal records provided. The hourly rates paid to these four employees did not differ significantly from the rates documented in the salary ordinances. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 22 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: . . . (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 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: (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. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 23 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. As a result, payroll disbursements identified above could not be tied to an approved salary. 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 design and implement a proper system of internal controls, including policies and procedures that would ensure that employees charged to the grant are paid the approved rate of pay. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2021-2022, 2022-2023 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Eligibility, Reporting, 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, which would include segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. INDIANA STATE BOARD OF ACCOUNTS 24 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Eligibility The Data Collection Specialist entered direct certifications into the School Corporation's software system. A student that was direct certified was coded in the software system as an import. The Food Service Director then viewed the direct certification listing monthly. However, there was no evidence that the Food Service Director's review took place, nor was there a review or oversight process in place to ensure that direct certifications were properly uploaded into the system or that that the software system accurately recording the direct certification students. Reporting During the 2021-2022 school year, the School Corporation operated under the Seamless Summer Option (SSO), which allowed all students to receive free meals. Therefore, the cafeteria cashiers at each school manually recorded meals served on the meal count forms provided and prescribed by the Indiana Department of Education. The Food Service Director used the meal count forms to compile and submit the monthly claim for reimbursement without an oversight or review process in place to detect and correct errors. During the 2022-2023 school year, the School Corporation did not operate under SSO and thus resumed the use of their software, Café Enterprise. Café Enterprise, generated meal count reports by type (i.e., free, reduced, paid, etc.) at each school. The Food Service Director used the meal count reports to compile and submit the monthly claim for reimbursement without an oversight or review process in place to detect and correct errors. Special Tests and Provisions - Non-Profit School Food Service Accounts A receipt was prepared and recorded in the school food service account when reimbursement was received for meals served. On a monthly basis, the Deputy Treasurer generated a Fund Report and Revenue History Report and provided it to the Food Service Director. The Food Service Director prepared and utilized a monthly spreadsheet to reconcile the Food Service accounts to the corporation account. While appropriate financial records were prepared and exchanged, there was no documented oversight, review, or approval process in place to ensure the separate accounting took place, that reimbursements were correctly credited to the school food sever account and that transfers out of the food service account were for allowable costs of the food service. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 25 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. 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. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2021-2022, 2022-2023 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Eligibility, Reporting, 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, which would include segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. INDIANA STATE BOARD OF ACCOUNTS 24 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Eligibility The Data Collection Specialist entered direct certifications into the School Corporation's software system. A student that was direct certified was coded in the software system as an import. The Food Service Director then viewed the direct certification listing monthly. However, there was no evidence that the Food Service Director's review took place, nor was there a review or oversight process in place to ensure that direct certifications were properly uploaded into the system or that that the software system accurately recording the direct certification students. Reporting During the 2021-2022 school year, the School Corporation operated under the Seamless Summer Option (SSO), which allowed all students to receive free meals. Therefore, the cafeteria cashiers at each school manually recorded meals served on the meal count forms provided and prescribed by the Indiana Department of Education. The Food Service Director used the meal count forms to compile and submit the monthly claim for reimbursement without an oversight or review process in place to detect and correct errors. During the 2022-2023 school year, the School Corporation did not operate under SSO and thus resumed the use of their software, Café Enterprise. Café Enterprise, generated meal count reports by type (i.e., free, reduced, paid, etc.) at each school. The Food Service Director used the meal count reports to compile and submit the monthly claim for reimbursement without an oversight or review process in place to detect and correct errors. Special Tests and Provisions - Non-Profit School Food Service Accounts A receipt was prepared and recorded in the school food service account when reimbursement was received for meals served. On a monthly basis, the Deputy Treasurer generated a Fund Report and Revenue History Report and provided it to the Food Service Director. The Food Service Director prepared and utilized a monthly spreadsheet to reconcile the Food Service accounts to the corporation account. While appropriate financial records were prepared and exchanged, there was no documented oversight, review, or approval process in place to ensure the separate accounting took place, that reimbursements were correctly credited to the school food sever account and that transfers out of the food service account were for allowable costs of the food service. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 25 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. 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. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2021-2022, 2022-2023 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Eligibility, Reporting, 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, which would include segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. INDIANA STATE BOARD OF ACCOUNTS 24 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Eligibility The Data Collection Specialist entered direct certifications into the School Corporation's software system. A student that was direct certified was coded in the software system as an import. The Food Service Director then viewed the direct certification listing monthly. However, there was no evidence that the Food Service Director's review took place, nor was there a review or oversight process in place to ensure that direct certifications were properly uploaded into the system or that that the software system accurately recording the direct certification students. Reporting During the 2021-2022 school year, the School Corporation operated under the Seamless Summer Option (SSO), which allowed all students to receive free meals. Therefore, the cafeteria cashiers at each school manually recorded meals served on the meal count forms provided and prescribed by the Indiana Department of Education. The Food Service Director used the meal count forms to compile and submit the monthly claim for reimbursement without an oversight or review process in place to detect and correct errors. During the 2022-2023 school year, the School Corporation did not operate under SSO and thus resumed the use of their software, Café Enterprise. Café Enterprise, generated meal count reports by type (i.e., free, reduced, paid, etc.) at each school. The Food Service Director used the meal count reports to compile and submit the monthly claim for reimbursement without an oversight or review process in place to detect and correct errors. Special Tests and Provisions - Non-Profit School Food Service Accounts A receipt was prepared and recorded in the school food service account when reimbursement was received for meals served. On a monthly basis, the Deputy Treasurer generated a Fund Report and Revenue History Report and provided it to the Food Service Director. The Food Service Director prepared and utilized a monthly spreadsheet to reconcile the Food Service accounts to the corporation account. While appropriate financial records were prepared and exchanged, there was no documented oversight, review, or approval process in place to ensure the separate accounting took place, that reimbursements were correctly credited to the school food sever account and that transfers out of the food service account were for allowable costs of the food service. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 25 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. 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. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2021-2022, 2022-2023 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Eligibility, Reporting, 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, which would include segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. INDIANA STATE BOARD OF ACCOUNTS 24 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Eligibility The Data Collection Specialist entered direct certifications into the School Corporation's software system. A student that was direct certified was coded in the software system as an import. The Food Service Director then viewed the direct certification listing monthly. However, there was no evidence that the Food Service Director's review took place, nor was there a review or oversight process in place to ensure that direct certifications were properly uploaded into the system or that that the software system accurately recording the direct certification students. Reporting During the 2021-2022 school year, the School Corporation operated under the Seamless Summer Option (SSO), which allowed all students to receive free meals. Therefore, the cafeteria cashiers at each school manually recorded meals served on the meal count forms provided and prescribed by the Indiana Department of Education. The Food Service Director used the meal count forms to compile and submit the monthly claim for reimbursement without an oversight or review process in place to detect and correct errors. During the 2022-2023 school year, the School Corporation did not operate under SSO and thus resumed the use of their software, Café Enterprise. Café Enterprise, generated meal count reports by type (i.e., free, reduced, paid, etc.) at each school. The Food Service Director used the meal count reports to compile and submit the monthly claim for reimbursement without an oversight or review process in place to detect and correct errors. Special Tests and Provisions - Non-Profit School Food Service Accounts A receipt was prepared and recorded in the school food service account when reimbursement was received for meals served. On a monthly basis, the Deputy Treasurer generated a Fund Report and Revenue History Report and provided it to the Food Service Director. The Food Service Director prepared and utilized a monthly spreadsheet to reconcile the Food Service accounts to the corporation account. While appropriate financial records were prepared and exchanged, there was no documented oversight, review, or approval process in place to ensure the separate accounting took place, that reimbursements were correctly credited to the school food sever account and that transfers out of the food service account were for allowable costs of the food service. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 25 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. 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. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2021-2022, 2022-2023 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Eligibility, Reporting, 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, which would include segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. INDIANA STATE BOARD OF ACCOUNTS 24 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Eligibility The Data Collection Specialist entered direct certifications into the School Corporation's software system. A student that was direct certified was coded in the software system as an import. The Food Service Director then viewed the direct certification listing monthly. However, there was no evidence that the Food Service Director's review took place, nor was there a review or oversight process in place to ensure that direct certifications were properly uploaded into the system or that that the software system accurately recording the direct certification students. Reporting During the 2021-2022 school year, the School Corporation operated under the Seamless Summer Option (SSO), which allowed all students to receive free meals. Therefore, the cafeteria cashiers at each school manually recorded meals served on the meal count forms provided and prescribed by the Indiana Department of Education. The Food Service Director used the meal count forms to compile and submit the monthly claim for reimbursement without an oversight or review process in place to detect and correct errors. During the 2022-2023 school year, the School Corporation did not operate under SSO and thus resumed the use of their software, Café Enterprise. Café Enterprise, generated meal count reports by type (i.e., free, reduced, paid, etc.) at each school. The Food Service Director used the meal count reports to compile and submit the monthly claim for reimbursement without an oversight or review process in place to detect and correct errors. Special Tests and Provisions - Non-Profit School Food Service Accounts A receipt was prepared and recorded in the school food service account when reimbursement was received for meals served. On a monthly basis, the Deputy Treasurer generated a Fund Report and Revenue History Report and provided it to the Food Service Director. The Food Service Director prepared and utilized a monthly spreadsheet to reconcile the Food Service accounts to the corporation account. While appropriate financial records were prepared and exchanged, there was no documented oversight, review, or approval process in place to ensure the separate accounting took place, that reimbursements were correctly credited to the school food sever account and that transfers out of the food service account were for allowable costs of the food service. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 25 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. 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. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2021-2022, 2022-2023 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Eligibility, Reporting, 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, which would include segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. INDIANA STATE BOARD OF ACCOUNTS 24 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Eligibility The Data Collection Specialist entered direct certifications into the School Corporation's software system. A student that was direct certified was coded in the software system as an import. The Food Service Director then viewed the direct certification listing monthly. However, there was no evidence that the Food Service Director's review took place, nor was there a review or oversight process in place to ensure that direct certifications were properly uploaded into the system or that that the software system accurately recording the direct certification students. Reporting During the 2021-2022 school year, the School Corporation operated under the Seamless Summer Option (SSO), which allowed all students to receive free meals. Therefore, the cafeteria cashiers at each school manually recorded meals served on the meal count forms provided and prescribed by the Indiana Department of Education. The Food Service Director used the meal count forms to compile and submit the monthly claim for reimbursement without an oversight or review process in place to detect and correct errors. During the 2022-2023 school year, the School Corporation did not operate under SSO and thus resumed the use of their software, Café Enterprise. Café Enterprise, generated meal count reports by type (i.e., free, reduced, paid, etc.) at each school. The Food Service Director used the meal count reports to compile and submit the monthly claim for reimbursement without an oversight or review process in place to detect and correct errors. Special Tests and Provisions - Non-Profit School Food Service Accounts A receipt was prepared and recorded in the school food service account when reimbursement was received for meals served. On a monthly basis, the Deputy Treasurer generated a Fund Report and Revenue History Report and provided it to the Food Service Director. The Food Service Director prepared and utilized a monthly spreadsheet to reconcile the Food Service accounts to the corporation account. While appropriate financial records were prepared and exchanged, there was no documented oversight, review, or approval process in place to ensure the separate accounting took place, that reimbursements were correctly credited to the school food sever account and that transfers out of the food service account were for allowable costs of the food service. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 25 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. 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. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-006 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2021-2022, 2022-2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls, which would include segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance should be designed and implemented to ensure expenditures charged to the food service program fund (fund 800) are in adherence with the federal and state procurement regulations and requirements. In addition, an effective system of internal controls, which would include segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance should be designed and implemented to ensure covered transactions paid with child nutrition award funds are neither suspended or debarred or otherwise excluded from participating in federal awards. INDIANA STATE BOARD OF ACCOUNTS 26 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Procurement - Internal Control over Small Purchases The School Corporation had not designed or implemented adequate policies or procedures to ensure that proper procurement procedures for small purchases were adhered to. There was no documented oversight, review, or approval process in place at the School Corporation to ensure proper procedures were followed and price or rate quotations were obtained, or documentation to support limited procurement procedures were conducted and maintained for small purchases. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed procedures had not been performed to ensure vendors were not suspended or debarred prior to entering into covered transaction. One covered transaction that equaled or exceeded $25,000 was identified. The one transaction, totaling $40,325, was selected for testing. For the one covered transaction, the School Corporation had not performed procedures to ensure the vendor was not suspended or debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities for suspension or debarment. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to fiscal year 2021-2022. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: INDIANA STATE BOARD OF ACCOUNTS 27 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions or 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 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 and that contractors are not suspended, debarred, or otherwise excluded prior to entering into any covered transactions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-006 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2021-2022, 2022-2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls, which would include segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance should be designed and implemented to ensure expenditures charged to the food service program fund (fund 800) are in adherence with the federal and state procurement regulations and requirements. In addition, an effective system of internal controls, which would include segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance should be designed and implemented to ensure covered transactions paid with child nutrition award funds are neither suspended or debarred or otherwise excluded from participating in federal awards. INDIANA STATE BOARD OF ACCOUNTS 26 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Procurement - Internal Control over Small Purchases The School Corporation had not designed or implemented adequate policies or procedures to ensure that proper procurement procedures for small purchases were adhered to. There was no documented oversight, review, or approval process in place at the School Corporation to ensure proper procedures were followed and price or rate quotations were obtained, or documentation to support limited procurement procedures were conducted and maintained for small purchases. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed procedures had not been performed to ensure vendors were not suspended or debarred prior to entering into covered transaction. One covered transaction that equaled or exceeded $25,000 was identified. The one transaction, totaling $40,325, was selected for testing. For the one covered transaction, the School Corporation had not performed procedures to ensure the vendor was not suspended or debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities for suspension or debarment. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to fiscal year 2021-2022. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: INDIANA STATE BOARD OF ACCOUNTS 27 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions or 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 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 and that contractors are not suspended, debarred, or otherwise excluded prior to entering into any covered transactions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-006 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2021-2022, 2022-2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls, which would include segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance should be designed and implemented to ensure expenditures charged to the food service program fund (fund 800) are in adherence with the federal and state procurement regulations and requirements. In addition, an effective system of internal controls, which would include segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance should be designed and implemented to ensure covered transactions paid with child nutrition award funds are neither suspended or debarred or otherwise excluded from participating in federal awards. INDIANA STATE BOARD OF ACCOUNTS 26 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Procurement - Internal Control over Small Purchases The School Corporation had not designed or implemented adequate policies or procedures to ensure that proper procurement procedures for small purchases were adhered to. There was no documented oversight, review, or approval process in place at the School Corporation to ensure proper procedures were followed and price or rate quotations were obtained, or documentation to support limited procurement procedures were conducted and maintained for small purchases. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed procedures had not been performed to ensure vendors were not suspended or debarred prior to entering into covered transaction. One covered transaction that equaled or exceeded $25,000 was identified. The one transaction, totaling $40,325, was selected for testing. For the one covered transaction, the School Corporation had not performed procedures to ensure the vendor was not suspended or debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities for suspension or debarment. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to fiscal year 2021-2022. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: INDIANA STATE BOARD OF ACCOUNTS 27 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions or 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 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 and that contractors are not suspended, debarred, or otherwise excluded prior to entering into any covered transactions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.