2022-007 The Employment Security Department did not have adequate internal controls over and did not comply with requirements to ensure it submitted complete and accurate quarterly performance reports for the Workforce Innovation and Opportunity grant. Assistance Listing Number and Title: 17.258 Workforce Innovation and Opportunity Adult Program 17.259 Workforce Innovation and Opportunity Youth Activities 17.278 Workforce Innovation and Opportunity Dislocated Worker Formula Grants Federal Grantor Name: U.S. Department of Labor Federal Award/Contract Number: AA-33263-19-55-A-53; AA-34801-20-55-A-53; AA-36352-21-55-A-53; AA-33263-19-55-A-53; AA-34801-20-55-A-53; AA-36352-21-55-A-53; AA-33263-19-55-A-53; AA-34801-20-55-A-53; AA-36352-21-55-A-53 Pass-through Entity Name: None Pass-through Award/Contract Number: None Applicable Compliance Component: Reporting Known Questioned Cost Amount: None Background The Employment Security Department (Department) receives federal funding for the Workforce Innovation and Opportunity Act (WIOA) grant from the U.S. Department of Labor (DOL). WIOA authorizes formula grant programs to states to help job seekers access employment, education, training and support services to succeed in the labor market. WIOA provides employment and training programs for adults, dislocated workers, youth, and Wagner-Peyser Act employment services administered by DOL. DOL requires that the Department complete performance reports using a standardized Participant Individual Record Layout (PIRL). The Department must file the PIRL every quarter using DOL?s Workforce Integrated Performance System. DOL also requires that states develop data validation procedures related to the PIRL that include: ? Written description of the process for identifying and correcting errors or missing data, which may include electronic data checks; ? Regular data validation training for appropriate program staff; ? Monitoring protocols, consistent with 2 CFR ? 200.328; ? A regular review of program data for errors, missing data, out-of-range values and anomalies; ? Documentation that missing and erroneous data identified during the review process have been corrected; and ? Regular assessment of the effectiveness of the data validation process and revisions to the process as needed. The Department uses the Efforts to Outcome (ETO) system to determine if participants are eligible for programs under the WIOA grant. Local Workforce Development Boards (LWDBs) enter participant information into ETO, and DOL requires the Department to perform validation procedures to ensure participant data is accurate and complete. Additionally, ETO tracks participants? progress while in the program and upon completion. The Department uses data captured in ETO to compile the data elements reported on the PIRL. In state fiscal year 2022, the Department spent about $66 million in federal WIOA grant funds. Federal regulations require recipients to establish and follow internal controls to ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. In prior audits, we reported the Department did not have adequate internal controls over and did not comply with requirements to ensure it submitted complete and accurate quarterly performance reports for the WIOA grant. The prior audit finding numbers were 2021-007 and 2020-012. Description of Condition The Department did not have adequate internal controls over and did not comply with requirements to ensure it submitted complete and accurate quarterly performance reports for the WIOA grant. The Department did not establish an effective review process to ensure data elements of the PIRL quarterly reports were accurate and complete before submitting them to DOL. The Department also did not have adequate written data validation procedures for the PIRL report, as DOL requires. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition A contracted vendor extracts participant data from a large database and then uses customized code to transform it to produce the data the Department uses to create the PIRL reports. The Department did not review the changes applied to the data extraction process to ensure accurate reporting of WIOA participant information. Effect of Condition We verified the Department submitted all four quarterly PIRL reports to the DOL, as required during fiscal year 2022. We obtained and examined all four reports to determine if the Department accurately prepared them. To identify a population of WIOA participants, data elements 903, 904, and 905 are critical because they represent whether a client participated in the program. Each data element must be completed with one of the following allowable coding options: ? 0 ? Participant did not receive services ? 1 ? Yes, Local Formula ? 2 ? Yes, Statewide ? 3 ? Yes, Both Local Formula and State ? 4 ? Reportable Individual We found participants listed in the quarter one report were missing one or more data elements for 903, 904 and 905. The following tables show the proportion of the fields that were blank compared to the total number of fields. Data Element 903 Quarter Blanks Total Percent 1 167,035 336,693 49.61% 2 0 322,723 0.00% 3 0 316,816 0.00% 4 0 303,472 0.00% Data Element 904 Quarter Blanks Total Percent 1 167,189 336,693 49.66% 2 0 322,723 0.00% 3 0 316,816 0.00% 4 0 303,472 0.00% Data Element 905 Quarter Blanks Total Percent 1 167,200 336,693 49.66% 2 0 322,723 0.00% 3 0 316,816 0.00% 4 0 303,472 0.00% We could not determine the total population of WIOA participants for testing for quarter one because these data elements were incomplete and inaccurate. Further, we could not complete testing over the quarter two, three and four PIRL reports. When we attempted to design our testing over the key data elements, Department management said they could not ensure the that participant information reported would be materially accurate and complete due to the complexity of information that flows into data elements 903, 904 and 905, and due to the Department not validating the changes it made to the ETO data extraction process for effectiveness. Therefore, we could not perform further testing to determine whether the reports were accurate and complete. Since the key data elements were incomplete and inaccurate, we could not test to determine the level of material noncompliance. Without complete data, the Department cannot demonstrate compliance with reporting requirements nor accurately inform its federal grantor of its current level of program participation. Recommendations We recommend the Department: ? Update its written validation procedures for the PIRL report to meet DOL requirements ? Provide training and technical assistance to LWDBs on PIRL data element reporting requirements to ensure they enter all required information into ETO ? Establish a review process to ensure it submits complete and accurate quarterly PIRL reports Department?s Response The Department concurs with the finding. We would like to thank the Office of the State Auditor (SAO) for their work on this area to ensure job seekers in Washington state can access employment, education, training, and support services to succeed in the labor market. We have outlined our response below with respect to the recommendations made by SAO. The Department is conducting a balance of performing and implementing these recommendations concurrently with the WIT replacement project, which is estimated for completion in December 2024. SAO recommendation: Update written validation procedures for the PIRL report to meet DOL requirements. The Data Integrity, Policy and Monitoring teams have completed their Data Element Validation (DEV) policy update, submitted it to DOL and are actively executing DEV per DOL expectations. DOL has not provided guidance or definitions through a Training Employment Guidance Letter or Training Employment Notice related to the designation of a reportable individual. Once issued, we can more effectively train stakeholders, update policy, and hold local areas accountable to what a reportable individual count would be. We will also work with our vendors who provide the data extract from Efforts to Outcome to ensure scripting produces the required outcome. SAO recommendation: Provide training and technical assistance to LWDB?s on PIRL data element reporting requirements to ensure they enter all required information into ETO. ESD?s Data Integrity team has established a technical assistance PIRL reporting process focused on continuous improvement practices including data analysis training efforts. This process has been in place since Q2 2021. ESD will direct stakeholders to the current training processes and procedures which are shared on the Workforce Professional Center website. The agency is already working on a project to create an ETO Registration 101. This work will create a process that will add consistency and a more complete approach to the pre-requisite requirements of our customers as they are added to ETO. This is estimated to be complete in March 2023. The Data Integrity team will also be available for 1:1 specialized technical assistance, regarding their continuous improvement practices and pertinent data analysis, as requested by local areas and one-stop centers. SAO recommendation: Establish a review process to ensure it submits complete and accurate quarterly PIRL reports. The Data Integrity team is heavily involved in the automation and standardization of the Quarterly Report Analysis (QRA) process. Thus far, we have concentrated on setting up a sustainable process and we are working on evaluating all defined areas in the most recent QRAs provided to date. In addition, the Data Integrity team will continue to identify and fix issues when using WIPS and Performance Measure Analysis (for credentials and measurable skill gains). The QRA is in its pilot phase with DOL, and Washington State has proactively established a system and reporting structure prior to it being formally required by DOL. We are seeking and receiving technical assistance with DOL as it relates to the PIRL to further establish internal controls and effectively manage data validation, quality, and integrity. Auditor?s Remarks We thank the Department for its cooperation and assistance throughout the audit. We will review the status of the Department?s corrective action during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Training and Employment Guidance Letter (TEGL) WIOA No. 07-18, dated December 19, 2018 -Operating Guidance for the Workforce Innovation and Opportunity Act, states in part: Guidance for Validating Jointly Required Performance Data Submitted under the Workforce Innovation and Opportunity Act (WIOA) 4. Joint Data Validation Framework. Data validation is a series of internal controls or quality assurance techniques established to verify the accuracy, validity, and reliability of data. Establishing a joint data validation framework based on a consistent approach shared by the Departments will ensure that all program data are consistent and accurately reflect the performance of each core program in each State. To that end, the purposes of validation procedures for jointly required performance data are to: ? Verify that the performance data reported by States to the Departments are valid, accurate, reliable, and comparable across programs; ? Identify anomalies in the data and resolve issues that may cause inaccurate reporting; ? Outline source documentation required for common data elements; and ? Improve program performance accountability through the results of data validation efforts. While States must utilize a data validation strategy, the specific design, implementation, and periodic evaluation of that strategy is left to the discretion of the State so long as those strategies or procedures are consistent with these guidelines. Data validation helps ensure the accuracy of the annual statewide performance reports, safeguards data integrity, and promotes the timely resolution of data anomalies and inaccuracies. As such, it is recommended that States incorporate their data validation procedures into their internal controls procedures, which are required by 2 Code of Federal Regulations (CFR) ?200.303. State VR agencies should also consider related guidance issued in Rehabilitative Services Administration (RSA) Policy Directive 16-04. Each State must develop data validation procedures that include: ? Written procedures for data validation that contain a description of the process for identifying and correcting errors or missing data, which may include electronic data checks; ? Regular data validation training for appropriate program staff (e.g., at least annually); ? Monitoring protocols, consistent with 2 CFR ?200.328, to ensure that program staff are following the written data validation procedures and take appropriate corrective action if those procedures are not being followed; ? A regular review of program data (e.g., quarterly) for errors, missing data, out of-range values, and anomalies; ? Documentation that missing and erroneous data identified during the review process have been corrected; and ? Regular assessment of the effectiveness of the data validation process (e.g., at least annually) and revisions to that process as needed. Performance Accountability, Information, and Reporting System ? OMB Control No.1205-0526, can be found at https:www.dol.gov/agencies/eta/performance/reporting
2022-007 The Employment Security Department did not have adequate internal controls over and did not comply with requirements to ensure it submitted complete and accurate quarterly performance reports for the Workforce Innovation and Opportunity grant. Assistance Listing Number and Title: 17.258 Workforce Innovation and Opportunity Adult Program 17.259 Workforce Innovation and Opportunity Youth Activities 17.278 Workforce Innovation and Opportunity Dislocated Worker Formula Grants Federal Grantor Name: U.S. Department of Labor Federal Award/Contract Number: AA-33263-19-55-A-53; AA-34801-20-55-A-53; AA-36352-21-55-A-53; AA-33263-19-55-A-53; AA-34801-20-55-A-53; AA-36352-21-55-A-53; AA-33263-19-55-A-53; AA-34801-20-55-A-53; AA-36352-21-55-A-53 Pass-through Entity Name: None Pass-through Award/Contract Number: None Applicable Compliance Component: Reporting Known Questioned Cost Amount: None Background The Employment Security Department (Department) receives federal funding for the Workforce Innovation and Opportunity Act (WIOA) grant from the U.S. Department of Labor (DOL). WIOA authorizes formula grant programs to states to help job seekers access employment, education, training and support services to succeed in the labor market. WIOA provides employment and training programs for adults, dislocated workers, youth, and Wagner-Peyser Act employment services administered by DOL. DOL requires that the Department complete performance reports using a standardized Participant Individual Record Layout (PIRL). The Department must file the PIRL every quarter using DOL?s Workforce Integrated Performance System. DOL also requires that states develop data validation procedures related to the PIRL that include: ? Written description of the process for identifying and correcting errors or missing data, which may include electronic data checks; ? Regular data validation training for appropriate program staff; ? Monitoring protocols, consistent with 2 CFR ? 200.328; ? A regular review of program data for errors, missing data, out-of-range values and anomalies; ? Documentation that missing and erroneous data identified during the review process have been corrected; and ? Regular assessment of the effectiveness of the data validation process and revisions to the process as needed. The Department uses the Efforts to Outcome (ETO) system to determine if participants are eligible for programs under the WIOA grant. Local Workforce Development Boards (LWDBs) enter participant information into ETO, and DOL requires the Department to perform validation procedures to ensure participant data is accurate and complete. Additionally, ETO tracks participants? progress while in the program and upon completion. The Department uses data captured in ETO to compile the data elements reported on the PIRL. In state fiscal year 2022, the Department spent about $66 million in federal WIOA grant funds. Federal regulations require recipients to establish and follow internal controls to ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. In prior audits, we reported the Department did not have adequate internal controls over and did not comply with requirements to ensure it submitted complete and accurate quarterly performance reports for the WIOA grant. The prior audit finding numbers were 2021-007 and 2020-012. Description of Condition The Department did not have adequate internal controls over and did not comply with requirements to ensure it submitted complete and accurate quarterly performance reports for the WIOA grant. The Department did not establish an effective review process to ensure data elements of the PIRL quarterly reports were accurate and complete before submitting them to DOL. The Department also did not have adequate written data validation procedures for the PIRL report, as DOL requires. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition A contracted vendor extracts participant data from a large database and then uses customized code to transform it to produce the data the Department uses to create the PIRL reports. The Department did not review the changes applied to the data extraction process to ensure accurate reporting of WIOA participant information. Effect of Condition We verified the Department submitted all four quarterly PIRL reports to the DOL, as required during fiscal year 2022. We obtained and examined all four reports to determine if the Department accurately prepared them. To identify a population of WIOA participants, data elements 903, 904, and 905 are critical because they represent whether a client participated in the program. Each data element must be completed with one of the following allowable coding options: ? 0 ? Participant did not receive services ? 1 ? Yes, Local Formula ? 2 ? Yes, Statewide ? 3 ? Yes, Both Local Formula and State ? 4 ? Reportable Individual We found participants listed in the quarter one report were missing one or more data elements for 903, 904 and 905. The following tables show the proportion of the fields that were blank compared to the total number of fields. Data Element 903 Quarter Blanks Total Percent 1 167,035 336,693 49.61% 2 0 322,723 0.00% 3 0 316,816 0.00% 4 0 303,472 0.00% Data Element 904 Quarter Blanks Total Percent 1 167,189 336,693 49.66% 2 0 322,723 0.00% 3 0 316,816 0.00% 4 0 303,472 0.00% Data Element 905 Quarter Blanks Total Percent 1 167,200 336,693 49.66% 2 0 322,723 0.00% 3 0 316,816 0.00% 4 0 303,472 0.00% We could not determine the total population of WIOA participants for testing for quarter one because these data elements were incomplete and inaccurate. Further, we could not complete testing over the quarter two, three and four PIRL reports. When we attempted to design our testing over the key data elements, Department management said they could not ensure the that participant information reported would be materially accurate and complete due to the complexity of information that flows into data elements 903, 904 and 905, and due to the Department not validating the changes it made to the ETO data extraction process for effectiveness. Therefore, we could not perform further testing to determine whether the reports were accurate and complete. Since the key data elements were incomplete and inaccurate, we could not test to determine the level of material noncompliance. Without complete data, the Department cannot demonstrate compliance with reporting requirements nor accurately inform its federal grantor of its current level of program participation. Recommendations We recommend the Department: ? Update its written validation procedures for the PIRL report to meet DOL requirements ? Provide training and technical assistance to LWDBs on PIRL data element reporting requirements to ensure they enter all required information into ETO ? Establish a review process to ensure it submits complete and accurate quarterly PIRL reports Department?s Response The Department concurs with the finding. We would like to thank the Office of the State Auditor (SAO) for their work on this area to ensure job seekers in Washington state can access employment, education, training, and support services to succeed in the labor market. We have outlined our response below with respect to the recommendations made by SAO. The Department is conducting a balance of performing and implementing these recommendations concurrently with the WIT replacement project, which is estimated for completion in December 2024. SAO recommendation: Update written validation procedures for the PIRL report to meet DOL requirements. The Data Integrity, Policy and Monitoring teams have completed their Data Element Validation (DEV) policy update, submitted it to DOL and are actively executing DEV per DOL expectations. DOL has not provided guidance or definitions through a Training Employment Guidance Letter or Training Employment Notice related to the designation of a reportable individual. Once issued, we can more effectively train stakeholders, update policy, and hold local areas accountable to what a reportable individual count would be. We will also work with our vendors who provide the data extract from Efforts to Outcome to ensure scripting produces the required outcome. SAO recommendation: Provide training and technical assistance to LWDB?s on PIRL data element reporting requirements to ensure they enter all required information into ETO. ESD?s Data Integrity team has established a technical assistance PIRL reporting process focused on continuous improvement practices including data analysis training efforts. This process has been in place since Q2 2021. ESD will direct stakeholders to the current training processes and procedures which are shared on the Workforce Professional Center website. The agency is already working on a project to create an ETO Registration 101. This work will create a process that will add consistency and a more complete approach to the pre-requisite requirements of our customers as they are added to ETO. This is estimated to be complete in March 2023. The Data Integrity team will also be available for 1:1 specialized technical assistance, regarding their continuous improvement practices and pertinent data analysis, as requested by local areas and one-stop centers. SAO recommendation: Establish a review process to ensure it submits complete and accurate quarterly PIRL reports. The Data Integrity team is heavily involved in the automation and standardization of the Quarterly Report Analysis (QRA) process. Thus far, we have concentrated on setting up a sustainable process and we are working on evaluating all defined areas in the most recent QRAs provided to date. In addition, the Data Integrity team will continue to identify and fix issues when using WIPS and Performance Measure Analysis (for credentials and measurable skill gains). The QRA is in its pilot phase with DOL, and Washington State has proactively established a system and reporting structure prior to it being formally required by DOL. We are seeking and receiving technical assistance with DOL as it relates to the PIRL to further establish internal controls and effectively manage data validation, quality, and integrity. Auditor?s Remarks We thank the Department for its cooperation and assistance throughout the audit. We will review the status of the Department?s corrective action during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Training and Employment Guidance Letter (TEGL) WIOA No. 07-18, dated December 19, 2018 -Operating Guidance for the Workforce Innovation and Opportunity Act, states in part: Guidance for Validating Jointly Required Performance Data Submitted under the Workforce Innovation and Opportunity Act (WIOA) 4. Joint Data Validation Framework. Data validation is a series of internal controls or quality assurance techniques established to verify the accuracy, validity, and reliability of data. Establishing a joint data validation framework based on a consistent approach shared by the Departments will ensure that all program data are consistent and accurately reflect the performance of each core program in each State. To that end, the purposes of validation procedures for jointly required performance data are to: ? Verify that the performance data reported by States to the Departments are valid, accurate, reliable, and comparable across programs; ? Identify anomalies in the data and resolve issues that may cause inaccurate reporting; ? Outline source documentation required for common data elements; and ? Improve program performance accountability through the results of data validation efforts. While States must utilize a data validation strategy, the specific design, implementation, and periodic evaluation of that strategy is left to the discretion of the State so long as those strategies or procedures are consistent with these guidelines. Data validation helps ensure the accuracy of the annual statewide performance reports, safeguards data integrity, and promotes the timely resolution of data anomalies and inaccuracies. As such, it is recommended that States incorporate their data validation procedures into their internal controls procedures, which are required by 2 Code of Federal Regulations (CFR) ?200.303. State VR agencies should also consider related guidance issued in Rehabilitative Services Administration (RSA) Policy Directive 16-04. Each State must develop data validation procedures that include: ? Written procedures for data validation that contain a description of the process for identifying and correcting errors or missing data, which may include electronic data checks; ? Regular data validation training for appropriate program staff (e.g., at least annually); ? Monitoring protocols, consistent with 2 CFR ?200.328, to ensure that program staff are following the written data validation procedures and take appropriate corrective action if those procedures are not being followed; ? A regular review of program data (e.g., quarterly) for errors, missing data, out of-range values, and anomalies; ? Documentation that missing and erroneous data identified during the review process have been corrected; and ? Regular assessment of the effectiveness of the data validation process (e.g., at least annually) and revisions to that process as needed. Performance Accountability, Information, and Reporting System ? OMB Control No.1205-0526, can be found at https:www.dol.gov/agencies/eta/performance/reporting
2022-007 The Employment Security Department did not have adequate internal controls over and did not comply with requirements to ensure it submitted complete and accurate quarterly performance reports for the Workforce Innovation and Opportunity grant. Assistance Listing Number and Title: 17.258 Workforce Innovation and Opportunity Adult Program 17.259 Workforce Innovation and Opportunity Youth Activities 17.278 Workforce Innovation and Opportunity Dislocated Worker Formula Grants Federal Grantor Name: U.S. Department of Labor Federal Award/Contract Number: AA-33263-19-55-A-53; AA-34801-20-55-A-53; AA-36352-21-55-A-53; AA-33263-19-55-A-53; AA-34801-20-55-A-53; AA-36352-21-55-A-53; AA-33263-19-55-A-53; AA-34801-20-55-A-53; AA-36352-21-55-A-53 Pass-through Entity Name: None Pass-through Award/Contract Number: None Applicable Compliance Component: Reporting Known Questioned Cost Amount: None Background The Employment Security Department (Department) receives federal funding for the Workforce Innovation and Opportunity Act (WIOA) grant from the U.S. Department of Labor (DOL). WIOA authorizes formula grant programs to states to help job seekers access employment, education, training and support services to succeed in the labor market. WIOA provides employment and training programs for adults, dislocated workers, youth, and Wagner-Peyser Act employment services administered by DOL. DOL requires that the Department complete performance reports using a standardized Participant Individual Record Layout (PIRL). The Department must file the PIRL every quarter using DOL?s Workforce Integrated Performance System. DOL also requires that states develop data validation procedures related to the PIRL that include: ? Written description of the process for identifying and correcting errors or missing data, which may include electronic data checks; ? Regular data validation training for appropriate program staff; ? Monitoring protocols, consistent with 2 CFR ? 200.328; ? A regular review of program data for errors, missing data, out-of-range values and anomalies; ? Documentation that missing and erroneous data identified during the review process have been corrected; and ? Regular assessment of the effectiveness of the data validation process and revisions to the process as needed. The Department uses the Efforts to Outcome (ETO) system to determine if participants are eligible for programs under the WIOA grant. Local Workforce Development Boards (LWDBs) enter participant information into ETO, and DOL requires the Department to perform validation procedures to ensure participant data is accurate and complete. Additionally, ETO tracks participants? progress while in the program and upon completion. The Department uses data captured in ETO to compile the data elements reported on the PIRL. In state fiscal year 2022, the Department spent about $66 million in federal WIOA grant funds. Federal regulations require recipients to establish and follow internal controls to ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. In prior audits, we reported the Department did not have adequate internal controls over and did not comply with requirements to ensure it submitted complete and accurate quarterly performance reports for the WIOA grant. The prior audit finding numbers were 2021-007 and 2020-012. Description of Condition The Department did not have adequate internal controls over and did not comply with requirements to ensure it submitted complete and accurate quarterly performance reports for the WIOA grant. The Department did not establish an effective review process to ensure data elements of the PIRL quarterly reports were accurate and complete before submitting them to DOL. The Department also did not have adequate written data validation procedures for the PIRL report, as DOL requires. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition A contracted vendor extracts participant data from a large database and then uses customized code to transform it to produce the data the Department uses to create the PIRL reports. The Department did not review the changes applied to the data extraction process to ensure accurate reporting of WIOA participant information. Effect of Condition We verified the Department submitted all four quarterly PIRL reports to the DOL, as required during fiscal year 2022. We obtained and examined all four reports to determine if the Department accurately prepared them. To identify a population of WIOA participants, data elements 903, 904, and 905 are critical because they represent whether a client participated in the program. Each data element must be completed with one of the following allowable coding options: ? 0 ? Participant did not receive services ? 1 ? Yes, Local Formula ? 2 ? Yes, Statewide ? 3 ? Yes, Both Local Formula and State ? 4 ? Reportable Individual We found participants listed in the quarter one report were missing one or more data elements for 903, 904 and 905. The following tables show the proportion of the fields that were blank compared to the total number of fields. Data Element 903 Quarter Blanks Total Percent 1 167,035 336,693 49.61% 2 0 322,723 0.00% 3 0 316,816 0.00% 4 0 303,472 0.00% Data Element 904 Quarter Blanks Total Percent 1 167,189 336,693 49.66% 2 0 322,723 0.00% 3 0 316,816 0.00% 4 0 303,472 0.00% Data Element 905 Quarter Blanks Total Percent 1 167,200 336,693 49.66% 2 0 322,723 0.00% 3 0 316,816 0.00% 4 0 303,472 0.00% We could not determine the total population of WIOA participants for testing for quarter one because these data elements were incomplete and inaccurate. Further, we could not complete testing over the quarter two, three and four PIRL reports. When we attempted to design our testing over the key data elements, Department management said they could not ensure the that participant information reported would be materially accurate and complete due to the complexity of information that flows into data elements 903, 904 and 905, and due to the Department not validating the changes it made to the ETO data extraction process for effectiveness. Therefore, we could not perform further testing to determine whether the reports were accurate and complete. Since the key data elements were incomplete and inaccurate, we could not test to determine the level of material noncompliance. Without complete data, the Department cannot demonstrate compliance with reporting requirements nor accurately inform its federal grantor of its current level of program participation. Recommendations We recommend the Department: ? Update its written validation procedures for the PIRL report to meet DOL requirements ? Provide training and technical assistance to LWDBs on PIRL data element reporting requirements to ensure they enter all required information into ETO ? Establish a review process to ensure it submits complete and accurate quarterly PIRL reports Department?s Response The Department concurs with the finding. We would like to thank the Office of the State Auditor (SAO) for their work on this area to ensure job seekers in Washington state can access employment, education, training, and support services to succeed in the labor market. We have outlined our response below with respect to the recommendations made by SAO. The Department is conducting a balance of performing and implementing these recommendations concurrently with the WIT replacement project, which is estimated for completion in December 2024. SAO recommendation: Update written validation procedures for the PIRL report to meet DOL requirements. The Data Integrity, Policy and Monitoring teams have completed their Data Element Validation (DEV) policy update, submitted it to DOL and are actively executing DEV per DOL expectations. DOL has not provided guidance or definitions through a Training Employment Guidance Letter or Training Employment Notice related to the designation of a reportable individual. Once issued, we can more effectively train stakeholders, update policy, and hold local areas accountable to what a reportable individual count would be. We will also work with our vendors who provide the data extract from Efforts to Outcome to ensure scripting produces the required outcome. SAO recommendation: Provide training and technical assistance to LWDB?s on PIRL data element reporting requirements to ensure they enter all required information into ETO. ESD?s Data Integrity team has established a technical assistance PIRL reporting process focused on continuous improvement practices including data analysis training efforts. This process has been in place since Q2 2021. ESD will direct stakeholders to the current training processes and procedures which are shared on the Workforce Professional Center website. The agency is already working on a project to create an ETO Registration 101. This work will create a process that will add consistency and a more complete approach to the pre-requisite requirements of our customers as they are added to ETO. This is estimated to be complete in March 2023. The Data Integrity team will also be available for 1:1 specialized technical assistance, regarding their continuous improvement practices and pertinent data analysis, as requested by local areas and one-stop centers. SAO recommendation: Establish a review process to ensure it submits complete and accurate quarterly PIRL reports. The Data Integrity team is heavily involved in the automation and standardization of the Quarterly Report Analysis (QRA) process. Thus far, we have concentrated on setting up a sustainable process and we are working on evaluating all defined areas in the most recent QRAs provided to date. In addition, the Data Integrity team will continue to identify and fix issues when using WIPS and Performance Measure Analysis (for credentials and measurable skill gains). The QRA is in its pilot phase with DOL, and Washington State has proactively established a system and reporting structure prior to it being formally required by DOL. We are seeking and receiving technical assistance with DOL as it relates to the PIRL to further establish internal controls and effectively manage data validation, quality, and integrity. Auditor?s Remarks We thank the Department for its cooperation and assistance throughout the audit. We will review the status of the Department?s corrective action during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Training and Employment Guidance Letter (TEGL) WIOA No. 07-18, dated December 19, 2018 -Operating Guidance for the Workforce Innovation and Opportunity Act, states in part: Guidance for Validating Jointly Required Performance Data Submitted under the Workforce Innovation and Opportunity Act (WIOA) 4. Joint Data Validation Framework. Data validation is a series of internal controls or quality assurance techniques established to verify the accuracy, validity, and reliability of data. Establishing a joint data validation framework based on a consistent approach shared by the Departments will ensure that all program data are consistent and accurately reflect the performance of each core program in each State. To that end, the purposes of validation procedures for jointly required performance data are to: ? Verify that the performance data reported by States to the Departments are valid, accurate, reliable, and comparable across programs; ? Identify anomalies in the data and resolve issues that may cause inaccurate reporting; ? Outline source documentation required for common data elements; and ? Improve program performance accountability through the results of data validation efforts. While States must utilize a data validation strategy, the specific design, implementation, and periodic evaluation of that strategy is left to the discretion of the State so long as those strategies or procedures are consistent with these guidelines. Data validation helps ensure the accuracy of the annual statewide performance reports, safeguards data integrity, and promotes the timely resolution of data anomalies and inaccuracies. As such, it is recommended that States incorporate their data validation procedures into their internal controls procedures, which are required by 2 Code of Federal Regulations (CFR) ?200.303. State VR agencies should also consider related guidance issued in Rehabilitative Services Administration (RSA) Policy Directive 16-04. Each State must develop data validation procedures that include: ? Written procedures for data validation that contain a description of the process for identifying and correcting errors or missing data, which may include electronic data checks; ? Regular data validation training for appropriate program staff (e.g., at least annually); ? Monitoring protocols, consistent with 2 CFR ?200.328, to ensure that program staff are following the written data validation procedures and take appropriate corrective action if those procedures are not being followed; ? A regular review of program data (e.g., quarterly) for errors, missing data, out of-range values, and anomalies; ? Documentation that missing and erroneous data identified during the review process have been corrected; and ? Regular assessment of the effectiveness of the data validation process (e.g., at least annually) and revisions to that process as needed. Performance Accountability, Information, and Reporting System ? OMB Control No.1205-0526, can be found at https:www.dol.gov/agencies/eta/performance/reporting
2022-007 The Employment Security Department did not have adequate internal controls over and did not comply with requirements to ensure it submitted complete and accurate quarterly performance reports for the Workforce Innovation and Opportunity grant. Assistance Listing Number and Title: 17.258 Workforce Innovation and Opportunity Adult Program 17.259 Workforce Innovation and Opportunity Youth Activities 17.278 Workforce Innovation and Opportunity Dislocated Worker Formula Grants Federal Grantor Name: U.S. Department of Labor Federal Award/Contract Number: AA-33263-19-55-A-53; AA-34801-20-55-A-53; AA-36352-21-55-A-53; AA-33263-19-55-A-53; AA-34801-20-55-A-53; AA-36352-21-55-A-53; AA-33263-19-55-A-53; AA-34801-20-55-A-53; AA-36352-21-55-A-53 Pass-through Entity Name: None Pass-through Award/Contract Number: None Applicable Compliance Component: Reporting Known Questioned Cost Amount: None Background The Employment Security Department (Department) receives federal funding for the Workforce Innovation and Opportunity Act (WIOA) grant from the U.S. Department of Labor (DOL). WIOA authorizes formula grant programs to states to help job seekers access employment, education, training and support services to succeed in the labor market. WIOA provides employment and training programs for adults, dislocated workers, youth, and Wagner-Peyser Act employment services administered by DOL. DOL requires that the Department complete performance reports using a standardized Participant Individual Record Layout (PIRL). The Department must file the PIRL every quarter using DOL?s Workforce Integrated Performance System. DOL also requires that states develop data validation procedures related to the PIRL that include: ? Written description of the process for identifying and correcting errors or missing data, which may include electronic data checks; ? Regular data validation training for appropriate program staff; ? Monitoring protocols, consistent with 2 CFR ? 200.328; ? A regular review of program data for errors, missing data, out-of-range values and anomalies; ? Documentation that missing and erroneous data identified during the review process have been corrected; and ? Regular assessment of the effectiveness of the data validation process and revisions to the process as needed. The Department uses the Efforts to Outcome (ETO) system to determine if participants are eligible for programs under the WIOA grant. Local Workforce Development Boards (LWDBs) enter participant information into ETO, and DOL requires the Department to perform validation procedures to ensure participant data is accurate and complete. Additionally, ETO tracks participants? progress while in the program and upon completion. The Department uses data captured in ETO to compile the data elements reported on the PIRL. In state fiscal year 2022, the Department spent about $66 million in federal WIOA grant funds. Federal regulations require recipients to establish and follow internal controls to ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. In prior audits, we reported the Department did not have adequate internal controls over and did not comply with requirements to ensure it submitted complete and accurate quarterly performance reports for the WIOA grant. The prior audit finding numbers were 2021-007 and 2020-012. Description of Condition The Department did not have adequate internal controls over and did not comply with requirements to ensure it submitted complete and accurate quarterly performance reports for the WIOA grant. The Department did not establish an effective review process to ensure data elements of the PIRL quarterly reports were accurate and complete before submitting them to DOL. The Department also did not have adequate written data validation procedures for the PIRL report, as DOL requires. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition A contracted vendor extracts participant data from a large database and then uses customized code to transform it to produce the data the Department uses to create the PIRL reports. The Department did not review the changes applied to the data extraction process to ensure accurate reporting of WIOA participant information. Effect of Condition We verified the Department submitted all four quarterly PIRL reports to the DOL, as required during fiscal year 2022. We obtained and examined all four reports to determine if the Department accurately prepared them. To identify a population of WIOA participants, data elements 903, 904, and 905 are critical because they represent whether a client participated in the program. Each data element must be completed with one of the following allowable coding options: ? 0 ? Participant did not receive services ? 1 ? Yes, Local Formula ? 2 ? Yes, Statewide ? 3 ? Yes, Both Local Formula and State ? 4 ? Reportable Individual We found participants listed in the quarter one report were missing one or more data elements for 903, 904 and 905. The following tables show the proportion of the fields that were blank compared to the total number of fields. Data Element 903 Quarter Blanks Total Percent 1 167,035 336,693 49.61% 2 0 322,723 0.00% 3 0 316,816 0.00% 4 0 303,472 0.00% Data Element 904 Quarter Blanks Total Percent 1 167,189 336,693 49.66% 2 0 322,723 0.00% 3 0 316,816 0.00% 4 0 303,472 0.00% Data Element 905 Quarter Blanks Total Percent 1 167,200 336,693 49.66% 2 0 322,723 0.00% 3 0 316,816 0.00% 4 0 303,472 0.00% We could not determine the total population of WIOA participants for testing for quarter one because these data elements were incomplete and inaccurate. Further, we could not complete testing over the quarter two, three and four PIRL reports. When we attempted to design our testing over the key data elements, Department management said they could not ensure the that participant information reported would be materially accurate and complete due to the complexity of information that flows into data elements 903, 904 and 905, and due to the Department not validating the changes it made to the ETO data extraction process for effectiveness. Therefore, we could not perform further testing to determine whether the reports were accurate and complete. Since the key data elements were incomplete and inaccurate, we could not test to determine the level of material noncompliance. Without complete data, the Department cannot demonstrate compliance with reporting requirements nor accurately inform its federal grantor of its current level of program participation. Recommendations We recommend the Department: ? Update its written validation procedures for the PIRL report to meet DOL requirements ? Provide training and technical assistance to LWDBs on PIRL data element reporting requirements to ensure they enter all required information into ETO ? Establish a review process to ensure it submits complete and accurate quarterly PIRL reports Department?s Response The Department concurs with the finding. We would like to thank the Office of the State Auditor (SAO) for their work on this area to ensure job seekers in Washington state can access employment, education, training, and support services to succeed in the labor market. We have outlined our response below with respect to the recommendations made by SAO. The Department is conducting a balance of performing and implementing these recommendations concurrently with the WIT replacement project, which is estimated for completion in December 2024. SAO recommendation: Update written validation procedures for the PIRL report to meet DOL requirements. The Data Integrity, Policy and Monitoring teams have completed their Data Element Validation (DEV) policy update, submitted it to DOL and are actively executing DEV per DOL expectations. DOL has not provided guidance or definitions through a Training Employment Guidance Letter or Training Employment Notice related to the designation of a reportable individual. Once issued, we can more effectively train stakeholders, update policy, and hold local areas accountable to what a reportable individual count would be. We will also work with our vendors who provide the data extract from Efforts to Outcome to ensure scripting produces the required outcome. SAO recommendation: Provide training and technical assistance to LWDB?s on PIRL data element reporting requirements to ensure they enter all required information into ETO. ESD?s Data Integrity team has established a technical assistance PIRL reporting process focused on continuous improvement practices including data analysis training efforts. This process has been in place since Q2 2021. ESD will direct stakeholders to the current training processes and procedures which are shared on the Workforce Professional Center website. The agency is already working on a project to create an ETO Registration 101. This work will create a process that will add consistency and a more complete approach to the pre-requisite requirements of our customers as they are added to ETO. This is estimated to be complete in March 2023. The Data Integrity team will also be available for 1:1 specialized technical assistance, regarding their continuous improvement practices and pertinent data analysis, as requested by local areas and one-stop centers. SAO recommendation: Establish a review process to ensure it submits complete and accurate quarterly PIRL reports. The Data Integrity team is heavily involved in the automation and standardization of the Quarterly Report Analysis (QRA) process. Thus far, we have concentrated on setting up a sustainable process and we are working on evaluating all defined areas in the most recent QRAs provided to date. In addition, the Data Integrity team will continue to identify and fix issues when using WIPS and Performance Measure Analysis (for credentials and measurable skill gains). The QRA is in its pilot phase with DOL, and Washington State has proactively established a system and reporting structure prior to it being formally required by DOL. We are seeking and receiving technical assistance with DOL as it relates to the PIRL to further establish internal controls and effectively manage data validation, quality, and integrity. Auditor?s Remarks We thank the Department for its cooperation and assistance throughout the audit. We will review the status of the Department?s corrective action during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Training and Employment Guidance Letter (TEGL) WIOA No. 07-18, dated December 19, 2018 -Operating Guidance for the Workforce Innovation and Opportunity Act, states in part: Guidance for Validating Jointly Required Performance Data Submitted under the Workforce Innovation and Opportunity Act (WIOA) 4. Joint Data Validation Framework. Data validation is a series of internal controls or quality assurance techniques established to verify the accuracy, validity, and reliability of data. Establishing a joint data validation framework based on a consistent approach shared by the Departments will ensure that all program data are consistent and accurately reflect the performance of each core program in each State. To that end, the purposes of validation procedures for jointly required performance data are to: ? Verify that the performance data reported by States to the Departments are valid, accurate, reliable, and comparable across programs; ? Identify anomalies in the data and resolve issues that may cause inaccurate reporting; ? Outline source documentation required for common data elements; and ? Improve program performance accountability through the results of data validation efforts. While States must utilize a data validation strategy, the specific design, implementation, and periodic evaluation of that strategy is left to the discretion of the State so long as those strategies or procedures are consistent with these guidelines. Data validation helps ensure the accuracy of the annual statewide performance reports, safeguards data integrity, and promotes the timely resolution of data anomalies and inaccuracies. As such, it is recommended that States incorporate their data validation procedures into their internal controls procedures, which are required by 2 Code of Federal Regulations (CFR) ?200.303. State VR agencies should also consider related guidance issued in Rehabilitative Services Administration (RSA) Policy Directive 16-04. Each State must develop data validation procedures that include: ? Written procedures for data validation that contain a description of the process for identifying and correcting errors or missing data, which may include electronic data checks; ? Regular data validation training for appropriate program staff (e.g., at least annually); ? Monitoring protocols, consistent with 2 CFR ?200.328, to ensure that program staff are following the written data validation procedures and take appropriate corrective action if those procedures are not being followed; ? A regular review of program data (e.g., quarterly) for errors, missing data, out of-range values, and anomalies; ? Documentation that missing and erroneous data identified during the review process have been corrected; and ? Regular assessment of the effectiveness of the data validation process (e.g., at least annually) and revisions to that process as needed. Performance Accountability, Information, and Reporting System ? OMB Control No.1205-0526, can be found at https:www.dol.gov/agencies/eta/performance/reporting
2022-007 The Employment Security Department did not have adequate internal controls over and did not comply with requirements to ensure it submitted complete and accurate quarterly performance reports for the Workforce Innovation and Opportunity grant. Assistance Listing Number and Title: 17.258 Workforce Innovation and Opportunity Adult Program 17.259 Workforce Innovation and Opportunity Youth Activities 17.278 Workforce Innovation and Opportunity Dislocated Worker Formula Grants Federal Grantor Name: U.S. Department of Labor Federal Award/Contract Number: AA-33263-19-55-A-53; AA-34801-20-55-A-53; AA-36352-21-55-A-53; AA-33263-19-55-A-53; AA-34801-20-55-A-53; AA-36352-21-55-A-53; AA-33263-19-55-A-53; AA-34801-20-55-A-53; AA-36352-21-55-A-53 Pass-through Entity Name: None Pass-through Award/Contract Number: None Applicable Compliance Component: Reporting Known Questioned Cost Amount: None Background The Employment Security Department (Department) receives federal funding for the Workforce Innovation and Opportunity Act (WIOA) grant from the U.S. Department of Labor (DOL). WIOA authorizes formula grant programs to states to help job seekers access employment, education, training and support services to succeed in the labor market. WIOA provides employment and training programs for adults, dislocated workers, youth, and Wagner-Peyser Act employment services administered by DOL. DOL requires that the Department complete performance reports using a standardized Participant Individual Record Layout (PIRL). The Department must file the PIRL every quarter using DOL?s Workforce Integrated Performance System. DOL also requires that states develop data validation procedures related to the PIRL that include: ? Written description of the process for identifying and correcting errors or missing data, which may include electronic data checks; ? Regular data validation training for appropriate program staff; ? Monitoring protocols, consistent with 2 CFR ? 200.328; ? A regular review of program data for errors, missing data, out-of-range values and anomalies; ? Documentation that missing and erroneous data identified during the review process have been corrected; and ? Regular assessment of the effectiveness of the data validation process and revisions to the process as needed. The Department uses the Efforts to Outcome (ETO) system to determine if participants are eligible for programs under the WIOA grant. Local Workforce Development Boards (LWDBs) enter participant information into ETO, and DOL requires the Department to perform validation procedures to ensure participant data is accurate and complete. Additionally, ETO tracks participants? progress while in the program and upon completion. The Department uses data captured in ETO to compile the data elements reported on the PIRL. In state fiscal year 2022, the Department spent about $66 million in federal WIOA grant funds. Federal regulations require recipients to establish and follow internal controls to ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. In prior audits, we reported the Department did not have adequate internal controls over and did not comply with requirements to ensure it submitted complete and accurate quarterly performance reports for the WIOA grant. The prior audit finding numbers were 2021-007 and 2020-012. Description of Condition The Department did not have adequate internal controls over and did not comply with requirements to ensure it submitted complete and accurate quarterly performance reports for the WIOA grant. The Department did not establish an effective review process to ensure data elements of the PIRL quarterly reports were accurate and complete before submitting them to DOL. The Department also did not have adequate written data validation procedures for the PIRL report, as DOL requires. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition A contracted vendor extracts participant data from a large database and then uses customized code to transform it to produce the data the Department uses to create the PIRL reports. The Department did not review the changes applied to the data extraction process to ensure accurate reporting of WIOA participant information. Effect of Condition We verified the Department submitted all four quarterly PIRL reports to the DOL, as required during fiscal year 2022. We obtained and examined all four reports to determine if the Department accurately prepared them. To identify a population of WIOA participants, data elements 903, 904, and 905 are critical because they represent whether a client participated in the program. Each data element must be completed with one of the following allowable coding options: ? 0 ? Participant did not receive services ? 1 ? Yes, Local Formula ? 2 ? Yes, Statewide ? 3 ? Yes, Both Local Formula and State ? 4 ? Reportable Individual We found participants listed in the quarter one report were missing one or more data elements for 903, 904 and 905. The following tables show the proportion of the fields that were blank compared to the total number of fields. Data Element 903 Quarter Blanks Total Percent 1 167,035 336,693 49.61% 2 0 322,723 0.00% 3 0 316,816 0.00% 4 0 303,472 0.00% Data Element 904 Quarter Blanks Total Percent 1 167,189 336,693 49.66% 2 0 322,723 0.00% 3 0 316,816 0.00% 4 0 303,472 0.00% Data Element 905 Quarter Blanks Total Percent 1 167,200 336,693 49.66% 2 0 322,723 0.00% 3 0 316,816 0.00% 4 0 303,472 0.00% We could not determine the total population of WIOA participants for testing for quarter one because these data elements were incomplete and inaccurate. Further, we could not complete testing over the quarter two, three and four PIRL reports. When we attempted to design our testing over the key data elements, Department management said they could not ensure the that participant information reported would be materially accurate and complete due to the complexity of information that flows into data elements 903, 904 and 905, and due to the Department not validating the changes it made to the ETO data extraction process for effectiveness. Therefore, we could not perform further testing to determine whether the reports were accurate and complete. Since the key data elements were incomplete and inaccurate, we could not test to determine the level of material noncompliance. Without complete data, the Department cannot demonstrate compliance with reporting requirements nor accurately inform its federal grantor of its current level of program participation. Recommendations We recommend the Department: ? Update its written validation procedures for the PIRL report to meet DOL requirements ? Provide training and technical assistance to LWDBs on PIRL data element reporting requirements to ensure they enter all required information into ETO ? Establish a review process to ensure it submits complete and accurate quarterly PIRL reports Department?s Response The Department concurs with the finding. We would like to thank the Office of the State Auditor (SAO) for their work on this area to ensure job seekers in Washington state can access employment, education, training, and support services to succeed in the labor market. We have outlined our response below with respect to the recommendations made by SAO. The Department is conducting a balance of performing and implementing these recommendations concurrently with the WIT replacement project, which is estimated for completion in December 2024. SAO recommendation: Update written validation procedures for the PIRL report to meet DOL requirements. The Data Integrity, Policy and Monitoring teams have completed their Data Element Validation (DEV) policy update, submitted it to DOL and are actively executing DEV per DOL expectations. DOL has not provided guidance or definitions through a Training Employment Guidance Letter or Training Employment Notice related to the designation of a reportable individual. Once issued, we can more effectively train stakeholders, update policy, and hold local areas accountable to what a reportable individual count would be. We will also work with our vendors who provide the data extract from Efforts to Outcome to ensure scripting produces the required outcome. SAO recommendation: Provide training and technical assistance to LWDB?s on PIRL data element reporting requirements to ensure they enter all required information into ETO. ESD?s Data Integrity team has established a technical assistance PIRL reporting process focused on continuous improvement practices including data analysis training efforts. This process has been in place since Q2 2021. ESD will direct stakeholders to the current training processes and procedures which are shared on the Workforce Professional Center website. The agency is already working on a project to create an ETO Registration 101. This work will create a process that will add consistency and a more complete approach to the pre-requisite requirements of our customers as they are added to ETO. This is estimated to be complete in March 2023. The Data Integrity team will also be available for 1:1 specialized technical assistance, regarding their continuous improvement practices and pertinent data analysis, as requested by local areas and one-stop centers. SAO recommendation: Establish a review process to ensure it submits complete and accurate quarterly PIRL reports. The Data Integrity team is heavily involved in the automation and standardization of the Quarterly Report Analysis (QRA) process. Thus far, we have concentrated on setting up a sustainable process and we are working on evaluating all defined areas in the most recent QRAs provided to date. In addition, the Data Integrity team will continue to identify and fix issues when using WIPS and Performance Measure Analysis (for credentials and measurable skill gains). The QRA is in its pilot phase with DOL, and Washington State has proactively established a system and reporting structure prior to it being formally required by DOL. We are seeking and receiving technical assistance with DOL as it relates to the PIRL to further establish internal controls and effectively manage data validation, quality, and integrity. Auditor?s Remarks We thank the Department for its cooperation and assistance throughout the audit. We will review the status of the Department?s corrective action during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Training and Employment Guidance Letter (TEGL) WIOA No. 07-18, dated December 19, 2018 -Operating Guidance for the Workforce Innovation and Opportunity Act, states in part: Guidance for Validating Jointly Required Performance Data Submitted under the Workforce Innovation and Opportunity Act (WIOA) 4. Joint Data Validation Framework. Data validation is a series of internal controls or quality assurance techniques established to verify the accuracy, validity, and reliability of data. Establishing a joint data validation framework based on a consistent approach shared by the Departments will ensure that all program data are consistent and accurately reflect the performance of each core program in each State. To that end, the purposes of validation procedures for jointly required performance data are to: ? Verify that the performance data reported by States to the Departments are valid, accurate, reliable, and comparable across programs; ? Identify anomalies in the data and resolve issues that may cause inaccurate reporting; ? Outline source documentation required for common data elements; and ? Improve program performance accountability through the results of data validation efforts. While States must utilize a data validation strategy, the specific design, implementation, and periodic evaluation of that strategy is left to the discretion of the State so long as those strategies or procedures are consistent with these guidelines. Data validation helps ensure the accuracy of the annual statewide performance reports, safeguards data integrity, and promotes the timely resolution of data anomalies and inaccuracies. As such, it is recommended that States incorporate their data validation procedures into their internal controls procedures, which are required by 2 Code of Federal Regulations (CFR) ?200.303. State VR agencies should also consider related guidance issued in Rehabilitative Services Administration (RSA) Policy Directive 16-04. Each State must develop data validation procedures that include: ? Written procedures for data validation that contain a description of the process for identifying and correcting errors or missing data, which may include electronic data checks; ? Regular data validation training for appropriate program staff (e.g., at least annually); ? Monitoring protocols, consistent with 2 CFR ?200.328, to ensure that program staff are following the written data validation procedures and take appropriate corrective action if those procedures are not being followed; ? A regular review of program data (e.g., quarterly) for errors, missing data, out of-range values, and anomalies; ? Documentation that missing and erroneous data identified during the review process have been corrected; and ? Regular assessment of the effectiveness of the data validation process (e.g., at least annually) and revisions to that process as needed. Performance Accountability, Information, and Reporting System ? OMB Control No.1205-0526, can be found at https:www.dol.gov/agencies/eta/performance/reporting
2022-007 The Employment Security Department did not have adequate internal controls over and did not comply with requirements to ensure it submitted complete and accurate quarterly performance reports for the Workforce Innovation and Opportunity grant. Assistance Listing Number and Title: 17.258 Workforce Innovation and Opportunity Adult Program 17.259 Workforce Innovation and Opportunity Youth Activities 17.278 Workforce Innovation and Opportunity Dislocated Worker Formula Grants Federal Grantor Name: U.S. Department of Labor Federal Award/Contract Number: AA-33263-19-55-A-53; AA-34801-20-55-A-53; AA-36352-21-55-A-53; AA-33263-19-55-A-53; AA-34801-20-55-A-53; AA-36352-21-55-A-53; AA-33263-19-55-A-53; AA-34801-20-55-A-53; AA-36352-21-55-A-53 Pass-through Entity Name: None Pass-through Award/Contract Number: None Applicable Compliance Component: Reporting Known Questioned Cost Amount: None Background The Employment Security Department (Department) receives federal funding for the Workforce Innovation and Opportunity Act (WIOA) grant from the U.S. Department of Labor (DOL). WIOA authorizes formula grant programs to states to help job seekers access employment, education, training and support services to succeed in the labor market. WIOA provides employment and training programs for adults, dislocated workers, youth, and Wagner-Peyser Act employment services administered by DOL. DOL requires that the Department complete performance reports using a standardized Participant Individual Record Layout (PIRL). The Department must file the PIRL every quarter using DOL?s Workforce Integrated Performance System. DOL also requires that states develop data validation procedures related to the PIRL that include: ? Written description of the process for identifying and correcting errors or missing data, which may include electronic data checks; ? Regular data validation training for appropriate program staff; ? Monitoring protocols, consistent with 2 CFR ? 200.328; ? A regular review of program data for errors, missing data, out-of-range values and anomalies; ? Documentation that missing and erroneous data identified during the review process have been corrected; and ? Regular assessment of the effectiveness of the data validation process and revisions to the process as needed. The Department uses the Efforts to Outcome (ETO) system to determine if participants are eligible for programs under the WIOA grant. Local Workforce Development Boards (LWDBs) enter participant information into ETO, and DOL requires the Department to perform validation procedures to ensure participant data is accurate and complete. Additionally, ETO tracks participants? progress while in the program and upon completion. The Department uses data captured in ETO to compile the data elements reported on the PIRL. In state fiscal year 2022, the Department spent about $66 million in federal WIOA grant funds. Federal regulations require recipients to establish and follow internal controls to ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. In prior audits, we reported the Department did not have adequate internal controls over and did not comply with requirements to ensure it submitted complete and accurate quarterly performance reports for the WIOA grant. The prior audit finding numbers were 2021-007 and 2020-012. Description of Condition The Department did not have adequate internal controls over and did not comply with requirements to ensure it submitted complete and accurate quarterly performance reports for the WIOA grant. The Department did not establish an effective review process to ensure data elements of the PIRL quarterly reports were accurate and complete before submitting them to DOL. The Department also did not have adequate written data validation procedures for the PIRL report, as DOL requires. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition A contracted vendor extracts participant data from a large database and then uses customized code to transform it to produce the data the Department uses to create the PIRL reports. The Department did not review the changes applied to the data extraction process to ensure accurate reporting of WIOA participant information. Effect of Condition We verified the Department submitted all four quarterly PIRL reports to the DOL, as required during fiscal year 2022. We obtained and examined all four reports to determine if the Department accurately prepared them. To identify a population of WIOA participants, data elements 903, 904, and 905 are critical because they represent whether a client participated in the program. Each data element must be completed with one of the following allowable coding options: ? 0 ? Participant did not receive services ? 1 ? Yes, Local Formula ? 2 ? Yes, Statewide ? 3 ? Yes, Both Local Formula and State ? 4 ? Reportable Individual We found participants listed in the quarter one report were missing one or more data elements for 903, 904 and 905. The following tables show the proportion of the fields that were blank compared to the total number of fields. Data Element 903 Quarter Blanks Total Percent 1 167,035 336,693 49.61% 2 0 322,723 0.00% 3 0 316,816 0.00% 4 0 303,472 0.00% Data Element 904 Quarter Blanks Total Percent 1 167,189 336,693 49.66% 2 0 322,723 0.00% 3 0 316,816 0.00% 4 0 303,472 0.00% Data Element 905 Quarter Blanks Total Percent 1 167,200 336,693 49.66% 2 0 322,723 0.00% 3 0 316,816 0.00% 4 0 303,472 0.00% We could not determine the total population of WIOA participants for testing for quarter one because these data elements were incomplete and inaccurate. Further, we could not complete testing over the quarter two, three and four PIRL reports. When we attempted to design our testing over the key data elements, Department management said they could not ensure the that participant information reported would be materially accurate and complete due to the complexity of information that flows into data elements 903, 904 and 905, and due to the Department not validating the changes it made to the ETO data extraction process for effectiveness. Therefore, we could not perform further testing to determine whether the reports were accurate and complete. Since the key data elements were incomplete and inaccurate, we could not test to determine the level of material noncompliance. Without complete data, the Department cannot demonstrate compliance with reporting requirements nor accurately inform its federal grantor of its current level of program participation. Recommendations We recommend the Department: ? Update its written validation procedures for the PIRL report to meet DOL requirements ? Provide training and technical assistance to LWDBs on PIRL data element reporting requirements to ensure they enter all required information into ETO ? Establish a review process to ensure it submits complete and accurate quarterly PIRL reports Department?s Response The Department concurs with the finding. We would like to thank the Office of the State Auditor (SAO) for their work on this area to ensure job seekers in Washington state can access employment, education, training, and support services to succeed in the labor market. We have outlined our response below with respect to the recommendations made by SAO. The Department is conducting a balance of performing and implementing these recommendations concurrently with the WIT replacement project, which is estimated for completion in December 2024. SAO recommendation: Update written validation procedures for the PIRL report to meet DOL requirements. The Data Integrity, Policy and Monitoring teams have completed their Data Element Validation (DEV) policy update, submitted it to DOL and are actively executing DEV per DOL expectations. DOL has not provided guidance or definitions through a Training Employment Guidance Letter or Training Employment Notice related to the designation of a reportable individual. Once issued, we can more effectively train stakeholders, update policy, and hold local areas accountable to what a reportable individual count would be. We will also work with our vendors who provide the data extract from Efforts to Outcome to ensure scripting produces the required outcome. SAO recommendation: Provide training and technical assistance to LWDB?s on PIRL data element reporting requirements to ensure they enter all required information into ETO. ESD?s Data Integrity team has established a technical assistance PIRL reporting process focused on continuous improvement practices including data analysis training efforts. This process has been in place since Q2 2021. ESD will direct stakeholders to the current training processes and procedures which are shared on the Workforce Professional Center website. The agency is already working on a project to create an ETO Registration 101. This work will create a process that will add consistency and a more complete approach to the pre-requisite requirements of our customers as they are added to ETO. This is estimated to be complete in March 2023. The Data Integrity team will also be available for 1:1 specialized technical assistance, regarding their continuous improvement practices and pertinent data analysis, as requested by local areas and one-stop centers. SAO recommendation: Establish a review process to ensure it submits complete and accurate quarterly PIRL reports. The Data Integrity team is heavily involved in the automation and standardization of the Quarterly Report Analysis (QRA) process. Thus far, we have concentrated on setting up a sustainable process and we are working on evaluating all defined areas in the most recent QRAs provided to date. In addition, the Data Integrity team will continue to identify and fix issues when using WIPS and Performance Measure Analysis (for credentials and measurable skill gains). The QRA is in its pilot phase with DOL, and Washington State has proactively established a system and reporting structure prior to it being formally required by DOL. We are seeking and receiving technical assistance with DOL as it relates to the PIRL to further establish internal controls and effectively manage data validation, quality, and integrity. Auditor?s Remarks We thank the Department for its cooperation and assistance throughout the audit. We will review the status of the Department?s corrective action during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Training and Employment Guidance Letter (TEGL) WIOA No. 07-18, dated December 19, 2018 -Operating Guidance for the Workforce Innovation and Opportunity Act, states in part: Guidance for Validating Jointly Required Performance Data Submitted under the Workforce Innovation and Opportunity Act (WIOA) 4. Joint Data Validation Framework. Data validation is a series of internal controls or quality assurance techniques established to verify the accuracy, validity, and reliability of data. Establishing a joint data validation framework based on a consistent approach shared by the Departments will ensure that all program data are consistent and accurately reflect the performance of each core program in each State. To that end, the purposes of validation procedures for jointly required performance data are to: ? Verify that the performance data reported by States to the Departments are valid, accurate, reliable, and comparable across programs; ? Identify anomalies in the data and resolve issues that may cause inaccurate reporting; ? Outline source documentation required for common data elements; and ? Improve program performance accountability through the results of data validation efforts. While States must utilize a data validation strategy, the specific design, implementation, and periodic evaluation of that strategy is left to the discretion of the State so long as those strategies or procedures are consistent with these guidelines. Data validation helps ensure the accuracy of the annual statewide performance reports, safeguards data integrity, and promotes the timely resolution of data anomalies and inaccuracies. As such, it is recommended that States incorporate their data validation procedures into their internal controls procedures, which are required by 2 Code of Federal Regulations (CFR) ?200.303. State VR agencies should also consider related guidance issued in Rehabilitative Services Administration (RSA) Policy Directive 16-04. Each State must develop data validation procedures that include: ? Written procedures for data validation that contain a description of the process for identifying and correcting errors or missing data, which may include electronic data checks; ? Regular data validation training for appropriate program staff (e.g., at least annually); ? Monitoring protocols, consistent with 2 CFR ?200.328, to ensure that program staff are following the written data validation procedures and take appropriate corrective action if those procedures are not being followed; ? A regular review of program data (e.g., quarterly) for errors, missing data, out of-range values, and anomalies; ? Documentation that missing and erroneous data identified during the review process have been corrected; and ? Regular assessment of the effectiveness of the data validation process (e.g., at least annually) and revisions to that process as needed. Performance Accountability, Information, and Reporting System ? OMB Control No.1205-0526, can be found at https:www.dol.gov/agencies/eta/performance/reporting
2022-007 The Employment Security Department did not have adequate internal controls over and did not comply with requirements to ensure it submitted complete and accurate quarterly performance reports for the Workforce Innovation and Opportunity grant. Assistance Listing Number and Title: 17.258 Workforce Innovation and Opportunity Adult Program 17.259 Workforce Innovation and Opportunity Youth Activities 17.278 Workforce Innovation and Opportunity Dislocated Worker Formula Grants Federal Grantor Name: U.S. Department of Labor Federal Award/Contract Number: AA-33263-19-55-A-53; AA-34801-20-55-A-53; AA-36352-21-55-A-53; AA-33263-19-55-A-53; AA-34801-20-55-A-53; AA-36352-21-55-A-53; AA-33263-19-55-A-53; AA-34801-20-55-A-53; AA-36352-21-55-A-53 Pass-through Entity Name: None Pass-through Award/Contract Number: None Applicable Compliance Component: Reporting Known Questioned Cost Amount: None Background The Employment Security Department (Department) receives federal funding for the Workforce Innovation and Opportunity Act (WIOA) grant from the U.S. Department of Labor (DOL). WIOA authorizes formula grant programs to states to help job seekers access employment, education, training and support services to succeed in the labor market. WIOA provides employment and training programs for adults, dislocated workers, youth, and Wagner-Peyser Act employment services administered by DOL. DOL requires that the Department complete performance reports using a standardized Participant Individual Record Layout (PIRL). The Department must file the PIRL every quarter using DOL?s Workforce Integrated Performance System. DOL also requires that states develop data validation procedures related to the PIRL that include: ? Written description of the process for identifying and correcting errors or missing data, which may include electronic data checks; ? Regular data validation training for appropriate program staff; ? Monitoring protocols, consistent with 2 CFR ? 200.328; ? A regular review of program data for errors, missing data, out-of-range values and anomalies; ? Documentation that missing and erroneous data identified during the review process have been corrected; and ? Regular assessment of the effectiveness of the data validation process and revisions to the process as needed. The Department uses the Efforts to Outcome (ETO) system to determine if participants are eligible for programs under the WIOA grant. Local Workforce Development Boards (LWDBs) enter participant information into ETO, and DOL requires the Department to perform validation procedures to ensure participant data is accurate and complete. Additionally, ETO tracks participants? progress while in the program and upon completion. The Department uses data captured in ETO to compile the data elements reported on the PIRL. In state fiscal year 2022, the Department spent about $66 million in federal WIOA grant funds. Federal regulations require recipients to establish and follow internal controls to ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. In prior audits, we reported the Department did not have adequate internal controls over and did not comply with requirements to ensure it submitted complete and accurate quarterly performance reports for the WIOA grant. The prior audit finding numbers were 2021-007 and 2020-012. Description of Condition The Department did not have adequate internal controls over and did not comply with requirements to ensure it submitted complete and accurate quarterly performance reports for the WIOA grant. The Department did not establish an effective review process to ensure data elements of the PIRL quarterly reports were accurate and complete before submitting them to DOL. The Department also did not have adequate written data validation procedures for the PIRL report, as DOL requires. We consider this internal control deficiency to be a material weakness, which led to material noncompliance. Cause of Condition A contracted vendor extracts participant data from a large database and then uses customized code to transform it to produce the data the Department uses to create the PIRL reports. The Department did not review the changes applied to the data extraction process to ensure accurate reporting of WIOA participant information. Effect of Condition We verified the Department submitted all four quarterly PIRL reports to the DOL, as required during fiscal year 2022. We obtained and examined all four reports to determine if the Department accurately prepared them. To identify a population of WIOA participants, data elements 903, 904, and 905 are critical because they represent whether a client participated in the program. Each data element must be completed with one of the following allowable coding options: ? 0 ? Participant did not receive services ? 1 ? Yes, Local Formula ? 2 ? Yes, Statewide ? 3 ? Yes, Both Local Formula and State ? 4 ? Reportable Individual We found participants listed in the quarter one report were missing one or more data elements for 903, 904 and 905. The following tables show the proportion of the fields that were blank compared to the total number of fields. Data Element 903 Quarter Blanks Total Percent 1 167,035 336,693 49.61% 2 0 322,723 0.00% 3 0 316,816 0.00% 4 0 303,472 0.00% Data Element 904 Quarter Blanks Total Percent 1 167,189 336,693 49.66% 2 0 322,723 0.00% 3 0 316,816 0.00% 4 0 303,472 0.00% Data Element 905 Quarter Blanks Total Percent 1 167,200 336,693 49.66% 2 0 322,723 0.00% 3 0 316,816 0.00% 4 0 303,472 0.00% We could not determine the total population of WIOA participants for testing for quarter one because these data elements were incomplete and inaccurate. Further, we could not complete testing over the quarter two, three and four PIRL reports. When we attempted to design our testing over the key data elements, Department management said they could not ensure the that participant information reported would be materially accurate and complete due to the complexity of information that flows into data elements 903, 904 and 905, and due to the Department not validating the changes it made to the ETO data extraction process for effectiveness. Therefore, we could not perform further testing to determine whether the reports were accurate and complete. Since the key data elements were incomplete and inaccurate, we could not test to determine the level of material noncompliance. Without complete data, the Department cannot demonstrate compliance with reporting requirements nor accurately inform its federal grantor of its current level of program participation. Recommendations We recommend the Department: ? Update its written validation procedures for the PIRL report to meet DOL requirements ? Provide training and technical assistance to LWDBs on PIRL data element reporting requirements to ensure they enter all required information into ETO ? Establish a review process to ensure it submits complete and accurate quarterly PIRL reports Department?s Response The Department concurs with the finding. We would like to thank the Office of the State Auditor (SAO) for their work on this area to ensure job seekers in Washington state can access employment, education, training, and support services to succeed in the labor market. We have outlined our response below with respect to the recommendations made by SAO. The Department is conducting a balance of performing and implementing these recommendations concurrently with the WIT replacement project, which is estimated for completion in December 2024. SAO recommendation: Update written validation procedures for the PIRL report to meet DOL requirements. The Data Integrity, Policy and Monitoring teams have completed their Data Element Validation (DEV) policy update, submitted it to DOL and are actively executing DEV per DOL expectations. DOL has not provided guidance or definitions through a Training Employment Guidance Letter or Training Employment Notice related to the designation of a reportable individual. Once issued, we can more effectively train stakeholders, update policy, and hold local areas accountable to what a reportable individual count would be. We will also work with our vendors who provide the data extract from Efforts to Outcome to ensure scripting produces the required outcome. SAO recommendation: Provide training and technical assistance to LWDB?s on PIRL data element reporting requirements to ensure they enter all required information into ETO. ESD?s Data Integrity team has established a technical assistance PIRL reporting process focused on continuous improvement practices including data analysis training efforts. This process has been in place since Q2 2021. ESD will direct stakeholders to the current training processes and procedures which are shared on the Workforce Professional Center website. The agency is already working on a project to create an ETO Registration 101. This work will create a process that will add consistency and a more complete approach to the pre-requisite requirements of our customers as they are added to ETO. This is estimated to be complete in March 2023. The Data Integrity team will also be available for 1:1 specialized technical assistance, regarding their continuous improvement practices and pertinent data analysis, as requested by local areas and one-stop centers. SAO recommendation: Establish a review process to ensure it submits complete and accurate quarterly PIRL reports. The Data Integrity team is heavily involved in the automation and standardization of the Quarterly Report Analysis (QRA) process. Thus far, we have concentrated on setting up a sustainable process and we are working on evaluating all defined areas in the most recent QRAs provided to date. In addition, the Data Integrity team will continue to identify and fix issues when using WIPS and Performance Measure Analysis (for credentials and measurable skill gains). The QRA is in its pilot phase with DOL, and Washington State has proactively established a system and reporting structure prior to it being formally required by DOL. We are seeking and receiving technical assistance with DOL as it relates to the PIRL to further establish internal controls and effectively manage data validation, quality, and integrity. Auditor?s Remarks We thank the Department for its cooperation and assistance throughout the audit. We will review the status of the Department?s corrective action during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Training and Employment Guidance Letter (TEGL) WIOA No. 07-18, dated December 19, 2018 -Operating Guidance for the Workforce Innovation and Opportunity Act, states in part: Guidance for Validating Jointly Required Performance Data Submitted under the Workforce Innovation and Opportunity Act (WIOA) 4. Joint Data Validation Framework. Data validation is a series of internal controls or quality assurance techniques established to verify the accuracy, validity, and reliability of data. Establishing a joint data validation framework based on a consistent approach shared by the Departments will ensure that all program data are consistent and accurately reflect the performance of each core program in each State. To that end, the purposes of validation procedures for jointly required performance data are to: ? Verify that the performance data reported by States to the Departments are valid, accurate, reliable, and comparable across programs; ? Identify anomalies in the data and resolve issues that may cause inaccurate reporting; ? Outline source documentation required for common data elements; and ? Improve program performance accountability through the results of data validation efforts. While States must utilize a data validation strategy, the specific design, implementation, and periodic evaluation of that strategy is left to the discretion of the State so long as those strategies or procedures are consistent with these guidelines. Data validation helps ensure the accuracy of the annual statewide performance reports, safeguards data integrity, and promotes the timely resolution of data anomalies and inaccuracies. As such, it is recommended that States incorporate their data validation procedures into their internal controls procedures, which are required by 2 Code of Federal Regulations (CFR) ?200.303. State VR agencies should also consider related guidance issued in Rehabilitative Services Administration (RSA) Policy Directive 16-04. Each State must develop data validation procedures that include: ? Written procedures for data validation that contain a description of the process for identifying and correcting errors or missing data, which may include electronic data checks; ? Regular data validation training for appropriate program staff (e.g., at least annually); ? Monitoring protocols, consistent with 2 CFR ?200.328, to ensure that program staff are following the written data validation procedures and take appropriate corrective action if those procedures are not being followed; ? A regular review of program data (e.g., quarterly) for errors, missing data, out of-range values, and anomalies; ? Documentation that missing and erroneous data identified during the review process have been corrected; and ? Regular assessment of the effectiveness of the data validation process (e.g., at least annually) and revisions to that process as needed. Performance Accountability, Information, and Reporting System ? OMB Control No.1205-0526, can be found at https:www.dol.gov/agencies/eta/performance/reporting
Criteria In accordance with the Uniform Guidance 2 CFR 200.302(b-2), ?The financial management system of each non-Federal entity must provide for accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in 200.328 and 200.329.? Condition We noted the following during our audit. 1. Charter School grant expenses amounting to $192,517 were recorded as General Fund expense instead of as a revenue and expense in the Special Revenue Fund. Of which $70,240 were recorded as General Fund expense instead of as a revenue and expense in the Special Revenue Fund. A prior period adjustment was required to reimburse the General Fund for the grant expense. 2. Charter School grant expenses incurred and claimed during the fiscal year ended June 30, 2022 amounting to $212,619 were recorded in the General Fund and not in the Special Revenue Fund. Context Details of the reimbursements for the grant did not agree with the details recorded in the Special Revenue Fund. Cause There was delay in the reconciliation of reimbursement requests with expenditures recorded in the Special Revenue Fund and General Fund. Effect Various journal entries were recorded and trial balance revisions were made to correct recorded expenses in the Special Revenue Fund, including a prior period adjustment of $70,240 to increase net position of the General Fund net position at July 1, 2021. Questioned Cost None. Recommendation The Charter School should ensure that there is a smooth coordination between the reimbursement and recording functions. The Charter School should also ensure timely reconciliation of reimbursement reports and records.
FINDING NO. 2022-001 FINANCIAL STATEMENTS Federal programs All federal financial assistance programs Category Internal control Condition found. The Organization accounted for its activities based on the services provided, which are educational services and food services. During our financial and compliance audit procedures for the fiscal year ended June 30, 2022, we noted the following conditions related to the accounting procedures and financial reporting practices of the Organization: a. Accounting and interim financial reports are not executed on a current (month-to-month) basis. Accounting journals, general ledger and interim financial reports, such as Balance Sheet, Statement of Activities and Bank Reconciliations, monthly analysis of certain accounts are executed after the end of the related accounting year. Criteria 2 CFR 200.302 (b) (2), (4), (5) and (7) establish that the financial management system of each nonFederal entity must provide for the following: i. Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting and 200.328 Monitoring and reporting program performance. Cause Contracted outsource for the general accounting of the institution have been unable to prepare the monthly accounting and the related interim financial reports on a current basis. Effect Weaknesses in the internal controls of the institution, requiring extra efforts from the administration to compensate for the lack of current accountability with additional alternative measures and procedures. Noncompliance with the above-mentioned requirements could lead to administrative actions by the grantor. Questioned costs None Identification as a Repeated Finding Included in prior years Findings No. 2017-001,2018-001, 2019-001,2020-001 and 2021-001. Recommendations The Organization should enforce its policies and procedures in order to accurately maintain its financial information, and on a timely basis, assuring that they reflect its assets and liabilities, and to maintain an appropriate control over its revenues and the amounts expended, which will allow a proper management and monitoring of operations. These policies and procedures should be enforced to consider the following: ? Establish monthly and year end closing procedures. ? Prepare monthly or quarterly financial reports for management evaluation and analysis. Views of Responsible Officials The Organization agrees with the finding. Executed actions have substantially improved their year-end closing procedures. They contracted a new accounting firm to improve their accounting and the interim financial reporting. Also, during the year ended June 30, 2022, an internal accountant was hired, who among other things, is coordinating and supervising the record keeping and compilation of interim and year end closing and reporting process. Subsequent to June 30, 2022, the institution decided to perform the accounting and reporting function internally, commencing on July 1, 2022.
FINDING NO. 2022-001 FINANCIAL STATEMENTS Federal programs All federal financial assistance programs Category Internal control Condition found. The Organization accounted for its activities based on the services provided, which are educational services and food services. During our financial and compliance audit procedures for the fiscal year ended June 30, 2022, we noted the following conditions related to the accounting procedures and financial reporting practices of the Organization: a. Accounting and interim financial reports are not executed on a current (month-to-month) basis. Accounting journals, general ledger and interim financial reports, such as Balance Sheet, Statement of Activities and Bank Reconciliations, monthly analysis of certain accounts are executed after the end of the related accounting year. Criteria 2 CFR 200.302 (b) (2), (4), (5) and (7) establish that the financial management system of each nonFederal entity must provide for the following: i. Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting and 200.328 Monitoring and reporting program performance. Cause Contracted outsource for the general accounting of the institution have been unable to prepare the monthly accounting and the related interim financial reports on a current basis. Effect Weaknesses in the internal controls of the institution, requiring extra efforts from the administration to compensate for the lack of current accountability with additional alternative measures and procedures. Noncompliance with the above-mentioned requirements could lead to administrative actions by the grantor. Questioned costs None Identification as a Repeated Finding Included in prior years Findings No. 2017-001,2018-001, 2019-001,2020-001 and 2021-001. Recommendations The Organization should enforce its policies and procedures in order to accurately maintain its financial information, and on a timely basis, assuring that they reflect its assets and liabilities, and to maintain an appropriate control over its revenues and the amounts expended, which will allow a proper management and monitoring of operations. These policies and procedures should be enforced to consider the following: ? Establish monthly and year end closing procedures. ? Prepare monthly or quarterly financial reports for management evaluation and analysis. Views of Responsible Officials The Organization agrees with the finding. Executed actions have substantially improved their year-end closing procedures. They contracted a new accounting firm to improve their accounting and the interim financial reporting. Also, during the year ended June 30, 2022, an internal accountant was hired, who among other things, is coordinating and supervising the record keeping and compilation of interim and year end closing and reporting process. Subsequent to June 30, 2022, the institution decided to perform the accounting and reporting function internally, commencing on July 1, 2022.
FINDING NO. 2022-001 FINANCIAL STATEMENTS Federal programs All federal financial assistance programs Category Internal control Condition found. The Organization accounted for its activities based on the services provided, which are educational services and food services. During our financial and compliance audit procedures for the fiscal year ended June 30, 2022, we noted the following conditions related to the accounting procedures and financial reporting practices of the Organization: a. Accounting and interim financial reports are not executed on a current (month-to-month) basis. Accounting journals, general ledger and interim financial reports, such as Balance Sheet, Statement of Activities and Bank Reconciliations, monthly analysis of certain accounts are executed after the end of the related accounting year. Criteria 2 CFR 200.302 (b) (2), (4), (5) and (7) establish that the financial management system of each nonFederal entity must provide for the following: i. Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting and 200.328 Monitoring and reporting program performance. Cause Contracted outsource for the general accounting of the institution have been unable to prepare the monthly accounting and the related interim financial reports on a current basis. Effect Weaknesses in the internal controls of the institution, requiring extra efforts from the administration to compensate for the lack of current accountability with additional alternative measures and procedures. Noncompliance with the above-mentioned requirements could lead to administrative actions by the grantor. Questioned costs None Identification as a Repeated Finding Included in prior years Findings No. 2017-001,2018-001, 2019-001,2020-001 and 2021-001. Recommendations The Organization should enforce its policies and procedures in order to accurately maintain its financial information, and on a timely basis, assuring that they reflect its assets and liabilities, and to maintain an appropriate control over its revenues and the amounts expended, which will allow a proper management and monitoring of operations. These policies and procedures should be enforced to consider the following: ? Establish monthly and year end closing procedures. ? Prepare monthly or quarterly financial reports for management evaluation and analysis. Views of Responsible Officials The Organization agrees with the finding. Executed actions have substantially improved their year-end closing procedures. They contracted a new accounting firm to improve their accounting and the interim financial reporting. Also, during the year ended June 30, 2022, an internal accountant was hired, who among other things, is coordinating and supervising the record keeping and compilation of interim and year end closing and reporting process. Subsequent to June 30, 2022, the institution decided to perform the accounting and reporting function internally, commencing on July 1, 2022.
FINDING NO. 2022-001 FINANCIAL STATEMENTS Federal programs All federal financial assistance programs Category Internal control Condition found. The Organization accounted for its activities based on the services provided, which are educational services and food services. During our financial and compliance audit procedures for the fiscal year ended June 30, 2022, we noted the following conditions related to the accounting procedures and financial reporting practices of the Organization: a. Accounting and interim financial reports are not executed on a current (month-to-month) basis. Accounting journals, general ledger and interim financial reports, such as Balance Sheet, Statement of Activities and Bank Reconciliations, monthly analysis of certain accounts are executed after the end of the related accounting year. Criteria 2 CFR 200.302 (b) (2), (4), (5) and (7) establish that the financial management system of each nonFederal entity must provide for the following: i. Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting and 200.328 Monitoring and reporting program performance. Cause Contracted outsource for the general accounting of the institution have been unable to prepare the monthly accounting and the related interim financial reports on a current basis. Effect Weaknesses in the internal controls of the institution, requiring extra efforts from the administration to compensate for the lack of current accountability with additional alternative measures and procedures. Noncompliance with the above-mentioned requirements could lead to administrative actions by the grantor. Questioned costs None Identification as a Repeated Finding Included in prior years Findings No. 2017-001,2018-001, 2019-001,2020-001 and 2021-001. Recommendations The Organization should enforce its policies and procedures in order to accurately maintain its financial information, and on a timely basis, assuring that they reflect its assets and liabilities, and to maintain an appropriate control over its revenues and the amounts expended, which will allow a proper management and monitoring of operations. These policies and procedures should be enforced to consider the following: ? Establish monthly and year end closing procedures. ? Prepare monthly or quarterly financial reports for management evaluation and analysis. Views of Responsible Officials The Organization agrees with the finding. Executed actions have substantially improved their year-end closing procedures. They contracted a new accounting firm to improve their accounting and the interim financial reporting. Also, during the year ended June 30, 2022, an internal accountant was hired, who among other things, is coordinating and supervising the record keeping and compilation of interim and year end closing and reporting process. Subsequent to June 30, 2022, the institution decided to perform the accounting and reporting function internally, commencing on July 1, 2022.
Significant Deficiency ? Item No. 2022-003 Identification of the Federal Program: U.S. Department of Agriculture ? Community Facilities Loans and Grants Cluster, Community Facilities Loans and Grants ? 10.766 Criteria: The Hospital must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Hospital is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR 200.327 and 2 CFR 200.328 require the auditee to collect financial information and monitor its activities under federal awards to assure compliance with applicable federal requirements and performance expectations are being achieved and report these items in accordance with program requirements. Terms and conditions of the federal award require the audited financial statements to be provided to the federal agency annually within 9 months of fiscal year-end, as well as an annual budget and quarterly reports. Condition: The Hospital did not submit the audited financial statements, budget, or quarterly reports within the prescribed period or request an extension. The audit financial statements are readily available to the federal agency through the federal clearinghouse website. The budget and quarterly reports were submitted late. Cause: The Hospital did not have a control in place to assure proper submission or the reports. Effect: The required reports were not submitted timely to the federal agency. Questioned Costs: None reported. Context: Sampling was not used. Recommendation: We recommend that management implement procedures to ensure that the required financial reports are submitted in a timely manner in accordance with the terms and conditions of the federal award. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
FINDING 2022-004 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425C Federal Award Number and Year (or Other Identifying Number): S425C200018 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation filed the four Elementary and Secondary School Emergency Relief (ESSER) and the two Governor's Emergency Education Relief (GEER) annual data reports due during the audit period. However, for GEER I, Year 2, the School Corporation reported $56,149 in expenditures although the School Corporation had $314,301 in expenditures from the GEER fund during the Year 2 reporting period. The lack of internal controls and noncompliance was isolated to the GEER Year 2 annual report. INDIANA STATE BOARD OF ACCOUNTS 21 LAPORTE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not developed a system of internal controls that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2022-002 ? Significant Deficiency, Reporting Federal Assistance Listing No. 84.425F U.S. Department Of Education ESF Section 2 ? Higher Education (Higher Education Emergency Relief Fund (HEERF)) Criteria: 2 CFR section 200.328 and 2 CFR section 200.329 requires grantees to submit quarterly reports for both student and institutional portions along with an annual report to the Department of Education. Condition: In our nonstatistical testing of 4 of the quarterly reports and 1 annual report, it was noted that costs for 2 of the quarterly reports were presented cumulatively, rather than separately by quarter which is based on guidance from the Department of Education. Cause: Management charged with oversight over the federal grant reported costs in a cumulative manner, rather than separately by quarter which is based on guidance from the Department of Education. Additionally, controls over compliance were not designed effectively to ensure compliance with such grant requirements. Effect: Instances of noncompliance were not detected by management. Questioned Costs: Not applicable Context: 1 student portion and 1 institutional portion quarterly report, while filed timely, had costs reported presented cumulatively, rather than separately by quarter which is based on guidance from the department of Education. Identification As A Repeat Finding: Not applicable. Recommendation: We recommend that management report costs on the student and institutional quarterly reports presented separately by quarter, rather than cumulatively. Views Of Responsible Officials/Corrective Action Plan (Unaudited): See the corrective action plan provided by management included with this report. Completion Date: June 2023 Contact Person: Kris Pace, Controller
FINDING 2022-005 Information on the federal program: Subject: Education Stabilization Fund ? Annual Data Report Federal Agency: Department of Education Federal Program: COVID-19 ? Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: The School Corporation did not have a documented review control in place to ensure the annual data report was reviewed by someone other than the preparer. Cause: There were not sufficient internal controls in place to ensure the accuracy of the Annual Data Report. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirements. Questioned Costs: There were no questioned costs identified. Context: There was no documented review by someone other than the preparer of the Annual Data Report to ensure the information submitted was complete and accurate. Additionally, the School Corporation was not able to provide support for the total expenditures reported on the Year 1 Annual Report. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-005 Information on the federal program: Subject: Education Stabilization Fund ? Annual Data Report Federal Agency: Department of Education Federal Program: COVID-19 ? Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: The School Corporation did not have a documented review control in place to ensure the annual data report was reviewed by someone other than the preparer. Cause: There were not sufficient internal controls in place to ensure the accuracy of the Annual Data Report. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirements. Questioned Costs: There were no questioned costs identified. Context: There was no documented review by someone other than the preparer of the Annual Data Report to ensure the information submitted was complete and accurate. Additionally, the School Corporation was not able to provide support for the total expenditures reported on the Year 1 Annual Report. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-005 Information on the federal program: Subject: Education Stabilization Fund ? Annual Data Report Federal Agency: Department of Education Federal Program: COVID-19 ? Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: The School Corporation did not have a documented review control in place to ensure the annual data report was reviewed by someone other than the preparer. Cause: There were not sufficient internal controls in place to ensure the accuracy of the Annual Data Report. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirements. Questioned Costs: There were no questioned costs identified. Context: There was no documented review by someone other than the preparer of the Annual Data Report to ensure the information submitted was complete and accurate. Additionally, the School Corporation was not able to provide support for the total expenditures reported on the Year 1 Annual Report. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-005 Information on the federal program: Subject: Education Stabilization Fund ? Annual Data Report Federal Agency: Department of Education Federal Program: COVID-19 ? Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: The School Corporation did not have a documented review control in place to ensure the annual data report was reviewed by someone other than the preparer. Cause: There were not sufficient internal controls in place to ensure the accuracy of the Annual Data Report. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirements. Questioned Costs: There were no questioned costs identified. Context: There was no documented review by someone other than the preparer of the Annual Data Report to ensure the information submitted was complete and accurate. Additionally, the School Corporation was not able to provide support for the total expenditures reported on the Year 1 Annual Report. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-002 Information on the federal program: Subject: Education Stabilization Fund (ESSER) ? Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 ? Education Stabilization Fund Assistance Listing Number: 84.425D Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit two Annual Data Reports to the Indiana Department of Education (IDOE) to meet federal reporting requirements for ESSER grant awards. For the first Annual Data Report submitted, there was no documented review by someone other than the preparer of the report to ensure the information submitted was complete and accurate. The second report was submitted with a documented secondary review. We noted that the amount reported as expended of $52,951 for ESSER I on the first report did not agree to the amounts expended per the underlying expenditure records of the School Corporation of $42,443. The amounts reported on the second Annual Data Report did agree to the underlying detail without issue. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-002 Information on the federal program: Subject: Education Stabilization Fund (ESSER) ? Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 ? Education Stabilization Fund Assistance Listing Number: 84.425D Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit two Annual Data Reports to the Indiana Department of Education (IDOE) to meet federal reporting requirements for ESSER grant awards. For the first Annual Data Report submitted, there was no documented review by someone other than the preparer of the report to ensure the information submitted was complete and accurate. The second report was submitted with a documented secondary review. We noted that the amount reported as expended of $52,951 for ESSER I on the first report did not agree to the amounts expended per the underlying expenditure records of the School Corporation of $42,443. The amounts reported on the second Annual Data Report did agree to the underlying detail without issue. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
2022 ? 004: HEERF Reporting Federal Agency: U.S. Department of Education Federal Program Name: (COVID-19) Higher Education Emergency Relief Fund Assistance Listing Number: 84.425F, 84.425M Federal Award Identification Number and Year: P425E204430-2020, P425M201006-20A-2020 Award Period: 84.425F ? May 14, 2020 to June 30, 2023 / 84.425M ? August 5, 2020 to June 30, 2023 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: There are three components to reporting for HEERF: 1) public reporting on the (a)(1) Student Aid Portion; 2) public reporting on the (a)(1) Institutional Portion (a)(2) and (a)(3) subprograms (Quarterly Reporting Form), as applicable; and 3) the annual report. The CARES Act 18004(e) and the CRRSAA 314(e) requires an institution receiving funds under HEERF I and HEERF II to submit a report to the secretary, at such time in such a manner as the secretary may require. While ARP does not explicitly identify procedures by which institutions must report on their uses of HEERF grant funds, ED exercises this reporting authority under 2 CFR section 200.328 and 2 CFR section 200.329. Condition: The University filed the annual report on May 12th, 2022, which was two (2) days later than the requirement to complete by May 10th, 2022. Questioned costs: There are no questioned costs. Context: In performing our audit, we noted that the University had not filed the annual report, with the appropriate supporting documentation, in accordance with the stated criteria. Cause: The University?s internal controls failed to detect that the annual report was not filed by the due date in the stated criteria. Effect: The University was not in compliance with the requirement to file the annual report by the due date in the stated criteria. Repeat Finding: No Recommendation: We recommend the University review its policies and procedures for the filing of the HEERF to ensure that there is sufficient time in the process to meet the due date in accordance with the stated criteria. The evidence of submission should include the original supporting documentation for the information published. Views of responsible officials: There is no disagreement with the audit finding.
2022 ? 004: HEERF Reporting Federal Agency: U.S. Department of Education Federal Program Name: (COVID-19) Higher Education Emergency Relief Fund Assistance Listing Number: 84.425F, 84.425M Federal Award Identification Number and Year: P425E204430-2020, P425M201006-20A-2020 Award Period: 84.425F ? May 14, 2020 to June 30, 2023 / 84.425M ? August 5, 2020 to June 30, 2023 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: There are three components to reporting for HEERF: 1) public reporting on the (a)(1) Student Aid Portion; 2) public reporting on the (a)(1) Institutional Portion (a)(2) and (a)(3) subprograms (Quarterly Reporting Form), as applicable; and 3) the annual report. The CARES Act 18004(e) and the CRRSAA 314(e) requires an institution receiving funds under HEERF I and HEERF II to submit a report to the secretary, at such time in such a manner as the secretary may require. While ARP does not explicitly identify procedures by which institutions must report on their uses of HEERF grant funds, ED exercises this reporting authority under 2 CFR section 200.328 and 2 CFR section 200.329. Condition: The University filed the annual report on May 12th, 2022, which was two (2) days later than the requirement to complete by May 10th, 2022. Questioned costs: There are no questioned costs. Context: In performing our audit, we noted that the University had not filed the annual report, with the appropriate supporting documentation, in accordance with the stated criteria. Cause: The University?s internal controls failed to detect that the annual report was not filed by the due date in the stated criteria. Effect: The University was not in compliance with the requirement to file the annual report by the due date in the stated criteria. Repeat Finding: No Recommendation: We recommend the University review its policies and procedures for the filing of the HEERF to ensure that there is sufficient time in the process to meet the due date in accordance with the stated criteria. The evidence of submission should include the original supporting documentation for the information published. Views of responsible officials: There is no disagreement with the audit finding.
FINDING 2022-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, Contract #46504 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual data reports (Reports) were complete and accurately submitted. The reports were prepared and submitted by one employee without any oversight, review, or approval process in place to prevent, or detect and correct, errors. Supporting documentation provided did not support the Full Time Equivalent (FTE) position amounts reported on the ESSER I, Yr. 1 and GEER I, Year 1 reports. 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, Contract #46504 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual data reports (Reports) were complete and accurately submitted. The reports were prepared and submitted by one employee without any oversight, review, or approval process in place to prevent, or detect and correct, errors. Supporting documentation provided did not support the Full Time Equivalent (FTE) position amounts reported on the ESSER I, Yr. 1 and GEER I, Year 1 reports. 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, Contract #46504 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual data reports (Reports) were complete and accurately submitted. The reports were prepared and submitted by one employee without any oversight, review, or approval process in place to prevent, or detect and correct, errors. Supporting documentation provided did not support the Full Time Equivalent (FTE) position amounts reported on the ESSER I, Yr. 1 and GEER I, Year 1 reports. 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, Contract #46504 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual data reports (Reports) were complete and accurately submitted. The reports were prepared and submitted by one employee without any oversight, review, or approval process in place to prevent, or detect and correct, errors. Supporting documentation provided did not support the Full Time Equivalent (FTE) position amounts reported on the ESSER I, Yr. 1 and GEER I, Year 1 reports. 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, Contract #46504 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual data reports (Reports) were complete and accurately submitted. The reports were prepared and submitted by one employee without any oversight, review, or approval process in place to prevent, or detect and correct, errors. Supporting documentation provided did not support the Full Time Equivalent (FTE) position amounts reported on the ESSER I, Yr. 1 and GEER I, Year 1 reports. 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Federal Program COVID-19 Community Development Block Grant, Assistance Listing No. 14.218 Criteria Per Title 2 CFR section 200.328, financial information and reports must be collected with the frequency required by the terms of the federal award. CDBG quarterly Cash on Hand financial reports are due within 30 days after the end of the reporting period. Condition During the audit, we noted one quarterly Cash on Hand report was submitted after the deadline. Effect The City submitted the report late and therefore fell out of compliance with the requirements of the granting agency. Questioned Costs No questioned costs Context/Sampling The entire population of 4 Cash on Hand Quarterly Reports were selected for testing. Identification as a Repeat Finding This is not a repeat finding. Recommendation We recommend the City implement controls to ensure timely submission of required reports, including tracking of due dates. Views of Responsible Officials See attached Corrective Action Plan.
Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425 Federal Agency: U.S. Department of Education Federal Award Identification Number: P425E203029, P425F200396, P425N200726 Federal Award Year: June 30, 2022 Criteria: The CARES Act 18004(e) and the CRRSAA 314(e) requires an institution receiving funds under HEERF I and HEERF II to submit a report to the secretary, at such time in such a manner as the secretary may require. While ARP does not explicitly identify procedures by which institutions must report on their uses of HEERF grant funds, the Department of Education (ED) exercises this reporting authority under 2 CFR section 200.328 and 2 CFR section 200.329. Condition: For the annual report covering January 1, 2021 through December 31, 2021, a number of the HEERF section (a)(1) and (a)(3) amounts reported as institutional portion spending were incorrect based on supporting documentation provided by the University. In addition, for the fourth quarter 2021 (quarter ending December 31, 2021) and the first quarter 2022 (quarter ending March 31, 2022) institutional portion reports, the University reported the full amount of section (a)(1) student portion of HEERF awarded to the University on the section (a)(3) line, when the amount on the section (a)(3) line should have been the total Fund for the Improvement of Postsecondary Education (FIPSE) funding awarded to the University. Also, for the quarterly student portion reports, the University reported the incorrect number of students who were eligible to receive a CRRSAA emergency financial aid grant during the fall of 2021. Questioned Costs: Not applicable. Context: Errors were noted in the one annual report, two quarterly institutional portion reports, and two quarterly student portion reports that were tested. The University was required to file one annual report, four quarterly institutional portion reports, and four quarterly student portion reports during the fiscal year. The sample was not considered statistically valid. Effect: The information included on the publicly-available reports and reports submitted to federal agencies was not accurate. Cause: The exceptions noted on the reports resulted from various factors, including misunderstanding of how reports were intended to be completed, turnover during the year in key personnel associated with preparing and reviewing the reports, and a transposition error. Recommendation: It is recommended that the guidance surrounding the preparation of the annual and quarterly reports be reviewed. In addition, the review of reports by someone who is not the original preparer of the reports should include a detailed tie out of numbers included on the reports to the University's supporting documentation. Management?s Response: The University has updated their procedure for preparing and reviewing the required reports and have established a team from the finance department to discuss issues that arise. The team will handle the identified discrepancies through their resolution. The team will meet at least monthly, and as requested by the Senior Accountant of Grants or the Director of Finance and Accounting (DFA). The team is receiving training on procedures, guidelines, and terminology to ensure accuracy on completed reports to ensure compliance. The updated procedure is that the Senior Accountant of Grants will prepare the quarterly and annual reports based on data provided in the accounting system and from the Office of Financial Aid and assure that the reported data ties to the University?s records. The completed reports will be reviewed by the Director of Finance and Accounting. When needed, the finance team will meet to handle apparent discrepancies. Approved reports will be returned by the DFA to the Senior Accountant who will then post the reports for public viewing and submit a copy to the funder.
Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425 Federal Agency: U.S. Department of Education Federal Award Identification Number: P425E203029, P425F200396, P425N200726 Federal Award Year: June 30, 2022 Criteria: The CARES Act 18004(e) and the CRRSAA 314(e) requires an institution receiving funds under HEERF I and HEERF II to submit a report to the secretary, at such time in such a manner as the secretary may require. While ARP does not explicitly identify procedures by which institutions must report on their uses of HEERF grant funds, the Department of Education (ED) exercises this reporting authority under 2 CFR section 200.328 and 2 CFR section 200.329. Condition: For the annual report covering January 1, 2021 through December 31, 2021, a number of the HEERF section (a)(1) and (a)(3) amounts reported as institutional portion spending were incorrect based on supporting documentation provided by the University. In addition, for the fourth quarter 2021 (quarter ending December 31, 2021) and the first quarter 2022 (quarter ending March 31, 2022) institutional portion reports, the University reported the full amount of section (a)(1) student portion of HEERF awarded to the University on the section (a)(3) line, when the amount on the section (a)(3) line should have been the total Fund for the Improvement of Postsecondary Education (FIPSE) funding awarded to the University. Also, for the quarterly student portion reports, the University reported the incorrect number of students who were eligible to receive a CRRSAA emergency financial aid grant during the fall of 2021. Questioned Costs: Not applicable. Context: Errors were noted in the one annual report, two quarterly institutional portion reports, and two quarterly student portion reports that were tested. The University was required to file one annual report, four quarterly institutional portion reports, and four quarterly student portion reports during the fiscal year. The sample was not considered statistically valid. Effect: The information included on the publicly-available reports and reports submitted to federal agencies was not accurate. Cause: The exceptions noted on the reports resulted from various factors, including misunderstanding of how reports were intended to be completed, turnover during the year in key personnel associated with preparing and reviewing the reports, and a transposition error. Recommendation: It is recommended that the guidance surrounding the preparation of the annual and quarterly reports be reviewed. In addition, the review of reports by someone who is not the original preparer of the reports should include a detailed tie out of numbers included on the reports to the University's supporting documentation. Management?s Response: The University has updated their procedure for preparing and reviewing the required reports and have established a team from the finance department to discuss issues that arise. The team will handle the identified discrepancies through their resolution. The team will meet at least monthly, and as requested by the Senior Accountant of Grants or the Director of Finance and Accounting (DFA). The team is receiving training on procedures, guidelines, and terminology to ensure accuracy on completed reports to ensure compliance. The updated procedure is that the Senior Accountant of Grants will prepare the quarterly and annual reports based on data provided in the accounting system and from the Office of Financial Aid and assure that the reported data ties to the University?s records. The completed reports will be reviewed by the Director of Finance and Accounting. When needed, the finance team will meet to handle apparent discrepancies. Approved reports will be returned by the DFA to the Senior Accountant who will then post the reports for public viewing and submit a copy to the funder.
Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425 Federal Agency: U.S. Department of Education Federal Award Identification Number: P425E203029, P425F200396, P425N200726 Federal Award Year: June 30, 2022 Criteria: The CARES Act 18004(e) and the CRRSAA 314(e) requires an institution receiving funds under HEERF I and HEERF II to submit a report to the secretary, at such time in such a manner as the secretary may require. While ARP does not explicitly identify procedures by which institutions must report on their uses of HEERF grant funds, the Department of Education (ED) exercises this reporting authority under 2 CFR section 200.328 and 2 CFR section 200.329. Condition: For the annual report covering January 1, 2021 through December 31, 2021, a number of the HEERF section (a)(1) and (a)(3) amounts reported as institutional portion spending were incorrect based on supporting documentation provided by the University. In addition, for the fourth quarter 2021 (quarter ending December 31, 2021) and the first quarter 2022 (quarter ending March 31, 2022) institutional portion reports, the University reported the full amount of section (a)(1) student portion of HEERF awarded to the University on the section (a)(3) line, when the amount on the section (a)(3) line should have been the total Fund for the Improvement of Postsecondary Education (FIPSE) funding awarded to the University. Also, for the quarterly student portion reports, the University reported the incorrect number of students who were eligible to receive a CRRSAA emergency financial aid grant during the fall of 2021. Questioned Costs: Not applicable. Context: Errors were noted in the one annual report, two quarterly institutional portion reports, and two quarterly student portion reports that were tested. The University was required to file one annual report, four quarterly institutional portion reports, and four quarterly student portion reports during the fiscal year. The sample was not considered statistically valid. Effect: The information included on the publicly-available reports and reports submitted to federal agencies was not accurate. Cause: The exceptions noted on the reports resulted from various factors, including misunderstanding of how reports were intended to be completed, turnover during the year in key personnel associated with preparing and reviewing the reports, and a transposition error. Recommendation: It is recommended that the guidance surrounding the preparation of the annual and quarterly reports be reviewed. In addition, the review of reports by someone who is not the original preparer of the reports should include a detailed tie out of numbers included on the reports to the University's supporting documentation. Management?s Response: The University has updated their procedure for preparing and reviewing the required reports and have established a team from the finance department to discuss issues that arise. The team will handle the identified discrepancies through their resolution. The team will meet at least monthly, and as requested by the Senior Accountant of Grants or the Director of Finance and Accounting (DFA). The team is receiving training on procedures, guidelines, and terminology to ensure accuracy on completed reports to ensure compliance. The updated procedure is that the Senior Accountant of Grants will prepare the quarterly and annual reports based on data provided in the accounting system and from the Office of Financial Aid and assure that the reported data ties to the University?s records. The completed reports will be reviewed by the Director of Finance and Accounting. When needed, the finance team will meet to handle apparent discrepancies. Approved reports will be returned by the DFA to the Senior Accountant who will then post the reports for public viewing and submit a copy to the funder.
FINDING 2022-002 Information on the federal program: Subject: Education Stabilization Fund ? Annual Data Report Federal Agency: Department of Education Federal Program: COVID-19 ? Education Stabilization Fund Assistance Listing Number: 84.425D Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Significant Deficiency Criteria: 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: The School Corporation did not have a review control in place to ensure the annual data report was reviewed by someone other than the preparer. Cause: There were not sufficient internal controls in place to ensure the Annual Data Report was submitted by the Indiana Department of Education?s deadline. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirements. Questioned Costs: There were no questioned costs identified. Context: There was no documented review by someone other than the preparer of the Annual Data Report to ensure the information submitted was complete and accurate. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-002 Information on the federal program: Subject: Education Stabilization Fund ? Annual Data Report Federal Agency: Department of Education Federal Program: COVID-19 ? Education Stabilization Fund Assistance Listing Number: 84.425D Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Significant Deficiency Criteria: 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: The School Corporation did not have a review control in place to ensure the annual data report was reviewed by someone other than the preparer. Cause: There were not sufficient internal controls in place to ensure the Annual Data Report was submitted by the Indiana Department of Education?s deadline. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirements. Questioned Costs: There were no questioned costs identified. Context: There was no documented review by someone other than the preparer of the Annual Data Report to ensure the information submitted was complete and accurate. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-002 Information on the federal program: Subject: Education Stabilization Fund ? Annual Data Report Federal Agency: Department of Education Federal Program: COVID-19 ? Education Stabilization Fund Assistance Listing Number: 84.425D Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Significant Deficiency Criteria: 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: The School Corporation did not have a review control in place to ensure the annual data report was reviewed by someone other than the preparer. Cause: There were not sufficient internal controls in place to ensure the Annual Data Report was submitted by the Indiana Department of Education?s deadline. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Reporting compliance requirements. Questioned Costs: There were no questioned costs identified. Context: There was no documented review by someone other than the preparer of the Annual Data Report to ensure the information submitted was complete and accurate. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-006 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, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation's to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation completed and submitted four annual Data Collection reports (Reports) for the Elementary and Secondary School Emergency Relief (ESSER) grants. For three of the four Reports tested, the Reports were not supported by the unit's records. The financial information provided did not agree to the data submitted in the Reports; therefore, we could not determine the accuracy of the Reports. Additionally, four of six key line items selected for testing could not be traced to supporting documentation. 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause Management had not developed a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system, as well as retain documentation to support reports, prevented the determination of the School Corporation's compliance with the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls, as well as retain documentation, to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 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, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation's to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation completed and submitted four annual Data Collection reports (Reports) for the Elementary and Secondary School Emergency Relief (ESSER) grants. For three of the four Reports tested, the Reports were not supported by the unit's records. The financial information provided did not agree to the data submitted in the Reports; therefore, we could not determine the accuracy of the Reports. Additionally, four of six key line items selected for testing could not be traced to supporting documentation. 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause Management had not developed a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system, as well as retain documentation to support reports, prevented the determination of the School Corporation's compliance with the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls, as well as retain documentation, to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 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, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation's to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation completed and submitted four annual Data Collection reports (Reports) for the Elementary and Secondary School Emergency Relief (ESSER) grants. For three of the four Reports tested, the Reports were not supported by the unit's records. The financial information provided did not agree to the data submitted in the Reports; therefore, we could not determine the accuracy of the Reports. Additionally, four of six key line items selected for testing could not be traced to supporting documentation. 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause Management had not developed a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system, as well as retain documentation to support reports, prevented the determination of the School Corporation's compliance with the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls, as well as retain documentation, to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 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, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation's to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation completed and submitted four annual Data Collection reports (Reports) for the Elementary and Secondary School Emergency Relief (ESSER) grants. For three of the four Reports tested, the Reports were not supported by the unit's records. The financial information provided did not agree to the data submitted in the Reports; therefore, we could not determine the accuracy of the Reports. Additionally, four of six key line items selected for testing could not be traced to supporting documentation. 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause Management had not developed a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system, as well as retain documentation to support reports, prevented the determination of the School Corporation's compliance with the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls, as well as retain documentation, to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 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, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation's to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation completed and submitted four annual Data Collection reports (Reports) for the Elementary and Secondary School Emergency Relief (ESSER) grants. For three of the four Reports tested, the Reports were not supported by the unit's records. The financial information provided did not agree to the data submitted in the Reports; therefore, we could not determine the accuracy of the Reports. Additionally, four of six key line items selected for testing could not be traced to supporting documentation. 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Cause Management had not developed a system of internal control that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective internal control system, as well as retain documentation to support reports, prevented the determination of the School Corporation's compliance with the Reporting compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective internal controls, as well as retain documentation, to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Subject: Title I Grants to Local Educational Agencies - Reporting Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A190014, S010A200014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation did not have an internal control over the final expenditure reports submitted during the audit period. The Treasurer submitted the report without a documented review or oversight in place to prevent, or detect and correct, errors on the reports. The School Corporation must report all required set asides manually on the final expenditure report submitted to the Indiana Department of Education. Grant award S010A200014 had a required set-aside for parental involvement; however, a set aside was not reported on the final expenditure report. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the S010A200014 grant award. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) (Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting and 200.328 Monitoring and reporting program performance. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." Cause Management had not designed or implemented a system of internal controls that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected. Noncompliance with the grant agreement and Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-006 Subject: Title I Grants to Local Educational Agencies - Reporting Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A190014, S010A200014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation did not have an internal control over the final expenditure reports submitted during the audit period. The Treasurer submitted the report without a documented review or oversight in place to prevent, or detect and correct, errors on the reports. The School Corporation must report all required set asides manually on the final expenditure report submitted to the Indiana Department of Education. Grant award S010A200014 had a required set-aside for parental involvement; however, a set aside was not reported on the final expenditure report. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to the S010A200014 grant award. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) (Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting and 200.328 Monitoring and reporting program performance. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." Cause Management had not designed or implemented a system of internal controls that would have ensured compliance with the Reporting compliance requirement. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected. Noncompliance with the grant agreement and Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-009 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, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The annual Elementary and Secondary School Emergency Relief (ESSER) annual data collection reports (Reports) were prepared by the Treasurer and reviewed and approved by the Director of Curriculum prior to submission; however, the review process in place did not prevent, or detect and correct, errors. Of the six reports tested, four (ESSER I, Year 1 and Year 2, ESSER II, Year 1, and ESSER III Year 1) were not supported by the School Corporation's records. Key line items selected for review and verification were determined to be incorrectly reported on the ESSER I, Year 1 report as well as omitted from the ESSER I, Year 2, ESSER II, Year 1, and ESSER III, Year 1 reports. 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 200.333 (Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) (Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not established a system of internal controls that would have ensured compliance with the Equipment and Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-009 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, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The annual Elementary and Secondary School Emergency Relief (ESSER) annual data collection reports (Reports) were prepared by the Treasurer and reviewed and approved by the Director of Curriculum prior to submission; however, the review process in place did not prevent, or detect and correct, errors. Of the six reports tested, four (ESSER I, Year 1 and Year 2, ESSER II, Year 1, and ESSER III Year 1) were not supported by the School Corporation's records. Key line items selected for review and verification were determined to be incorrectly reported on the ESSER I, Year 1 report as well as omitted from the ESSER I, Year 2, ESSER II, Year 1, and ESSER III, Year 1 reports. 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 200.333 (Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) (Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not established a system of internal controls that would have ensured compliance with the Equipment and Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-009 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, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The annual Elementary and Secondary School Emergency Relief (ESSER) annual data collection reports (Reports) were prepared by the Treasurer and reviewed and approved by the Director of Curriculum prior to submission; however, the review process in place did not prevent, or detect and correct, errors. Of the six reports tested, four (ESSER I, Year 1 and Year 2, ESSER II, Year 1, and ESSER III Year 1) were not supported by the School Corporation's records. Key line items selected for review and verification were determined to be incorrectly reported on the ESSER I, Year 1 report as well as omitted from the ESSER I, Year 2, ESSER II, Year 1, and ESSER III, Year 1 reports. 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 200.333 (Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) (Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.327 Financial reporting . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 2 CFR 200.302(b) (Revised Uniform Guidance) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not established a system of internal controls that would have ensured compliance with the Equipment and Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual data collection reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, for two of eight key line items tested the documentation provided did not agree with the information reported. The Full Time Equivalent (FTE) key line item on the ESSER I, Year 1, and GEER I, Year 1, reports were understated by 5.5 and 19 FTE employees, respectively. 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual data collection reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, for two of eight key line items tested the documentation provided did not agree with the information reported. The Full Time Equivalent (FTE) key line item on the ESSER I, Year 1, and GEER I, Year 1, reports were understated by 5.5 and 19 FTE employees, respectively. 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual data collection reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, for two of eight key line items tested the documentation provided did not agree with the information reported. The Full Time Equivalent (FTE) key line item on the ESSER I, Year 1, and GEER I, Year 1, reports were understated by 5.5 and 19 FTE employees, respectively. 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual data collection reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, for two of eight key line items tested the documentation provided did not agree with the information reported. The Full Time Equivalent (FTE) key line item on the ESSER I, Year 1, and GEER I, Year 1, reports were understated by 5.5 and 19 FTE employees, respectively. 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The School Corporation had not designed, nor implemented, a system of internal control to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) and the Governor's Emergency Education Relief (GEER) annual data collection reports (Reports) were complete and accurately submitted. The Reports were prepared by one employee without an oversight or review process in place to prevent, or detect and correct, errors. Additionally, for two of eight key line items tested the documentation provided did not agree with the information reported. The Full Time Equivalent (FTE) key line item on the ESSER I, Year 1, and GEER I, Year 1, reports were understated by 5.5 and 19 FTE employees, respectively. 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 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?? 200.328 and 200.329. . . ." (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause Management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.