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, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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) during the audit period to meet federal reporting requirements. For both reports submitted, we noted there was no formal review of the reports prior to submission to IDOE. Additionally, we noted that the school reported an amount of $0 for ESSER I, II, and III on the annual data reports submitted for the period of July 1, 2021 through June 30, 2022, which did not agree to underlying expenditure records ($16,924, $402,123, and $620,907, respectively) for the same period. The school also could not provide support for the number of full-time employees (FTE) as of 9/30/22 reported on the Year 3 CrossAct report. Further, we noted that the school reported $0 for ESSER II on the Year 3 report covering the period of July 1, 2022 through June 30, 2023, which did not agree to the underlying expenditure records ($248,418). The school also could not provide support for the number of full-time employees (FTE) as of 9/30/23 reported on the Year 4 CrossAct report. Identification as a repeat finding: Yes. See Finding 2022-007 in the prior period audit report. 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.
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, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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) during the audit period to meet federal reporting requirements. For both reports submitted, we noted there was no formal review of the reports prior to submission to IDOE. Additionally, we noted that the school reported an amount of $0 for ESSER I, II, and III on the annual data reports submitted for the period of July 1, 2021 through June 30, 2022, which did not agree to underlying expenditure records ($16,924, $402,123, and $620,907, respectively) for the same period. The school also could not provide support for the number of full-time employees (FTE) as of 9/30/22 reported on the Year 3 CrossAct report. Further, we noted that the school reported $0 for ESSER II on the Year 3 report covering the period of July 1, 2022 through June 30, 2023, which did not agree to the underlying expenditure records ($248,418). The school also could not provide support for the number of full-time employees (FTE) as of 9/30/23 reported on the Year 4 CrossAct report. Identification as a repeat finding: Yes. See Finding 2022-007 in the prior period audit report. 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 2024-002 Federal Program Information: COVID-19 Education Stabilization Fund - Higher Education Emergency Relief Fund (“HEERF”) (ALN: 84.425J), The National COVID-19 Resiliency Network (“NCRN”): Mitigating the Impact of COVID-19 on Vulnerable Populations (ALN: 93.137) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): L. Reporting – The School is required to comply with the requirements of Reporting associated with its federal awards. According to the Uniform Guidance, the School must timely and accurately post the required HEERF quarterly reports to School’s website and must submit an annual HEERF report covering calendar year expenditures. Amounts reported should agree to accounting records that support the audited financial statements and the Schedule of Expenditures of Federal Awards (CARES Act 18004(e); CRRSAA 314(e); 2 CFR 200.328; 2 CFR section 200.329; 34 CFR 75.720(b)). According to the NCRN grant agreement, the School must timely and accurately submit progress reports quarterly and must submit a final federal financial report (FFR) (SF-425/SF-425A) (OMB No. 0348-0061)). Amounts reported should agree to accounting records that support the audited financial statements and the Schedule of Expenditures of Federal Awards (2 CFR section 200.328). Condition: During our testing of required reports, we noted the following exceptions: • For 1 of 4 quarterly HEERF progress reports, the School did not submit the report within the required timeframe. • For 4 of the 4 quarterly HEERF reports, certain information submitted to the funding agency or posted to the School’s website was not accurately presented and did not reconcile to the School’s records. • For 1 of 1 NCRN final financial report, the School did not accurately report indirect cost totals that reconciled to the School’s records. • For 1 of 1 NCRN final financial report, the School did not submit the report within the required timeframe. Cause: Insufficient administrative oversight and internal controls with respect to reporting compliance requirements. Effect or Potential Effect: The School does not have policies and procedures in place to ensure that compliance is maintained with respect to the reporting compliance requirements and timely submission of reports. Questioned Costs: None. Context: We tested all 4 quarterly HEERF progress reports and the NCRN final financial report and found 5 exceptions as noted in the condition. This is a condition identified per review of the School’s compliance with specified requirements using a statistically valid sample. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as finding 2023-003 in the 2023 report. Recommendation: We recommend that the School enhance procedures and internal controls over the applicable reporting requirements to ensure compliance with federal regulations as well as the grant agreements. Views of Responsible Officials and Planned Corrective Actions: We concur. We will review our processes and ensure timely and accurate completion of reporting. We will complete the corrective action no later than June 30, 2025.
Finding 2024-002 Federal Program Information: COVID-19 Education Stabilization Fund - Higher Education Emergency Relief Fund (“HEERF”) (ALN: 84.425J), The National COVID-19 Resiliency Network (“NCRN”): Mitigating the Impact of COVID-19 on Vulnerable Populations (ALN: 93.137) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): L. Reporting – The School is required to comply with the requirements of Reporting associated with its federal awards. According to the Uniform Guidance, the School must timely and accurately post the required HEERF quarterly reports to School’s website and must submit an annual HEERF report covering calendar year expenditures. Amounts reported should agree to accounting records that support the audited financial statements and the Schedule of Expenditures of Federal Awards (CARES Act 18004(e); CRRSAA 314(e); 2 CFR 200.328; 2 CFR section 200.329; 34 CFR 75.720(b)). According to the NCRN grant agreement, the School must timely and accurately submit progress reports quarterly and must submit a final federal financial report (FFR) (SF-425/SF-425A) (OMB No. 0348-0061)). Amounts reported should agree to accounting records that support the audited financial statements and the Schedule of Expenditures of Federal Awards (2 CFR section 200.328). Condition: During our testing of required reports, we noted the following exceptions: • For 1 of 4 quarterly HEERF progress reports, the School did not submit the report within the required timeframe. • For 4 of the 4 quarterly HEERF reports, certain information submitted to the funding agency or posted to the School’s website was not accurately presented and did not reconcile to the School’s records. • For 1 of 1 NCRN final financial report, the School did not accurately report indirect cost totals that reconciled to the School’s records. • For 1 of 1 NCRN final financial report, the School did not submit the report within the required timeframe. Cause: Insufficient administrative oversight and internal controls with respect to reporting compliance requirements. Effect or Potential Effect: The School does not have policies and procedures in place to ensure that compliance is maintained with respect to the reporting compliance requirements and timely submission of reports. Questioned Costs: None. Context: We tested all 4 quarterly HEERF progress reports and the NCRN final financial report and found 5 exceptions as noted in the condition. This is a condition identified per review of the School’s compliance with specified requirements using a statistically valid sample. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as finding 2023-003 in the 2023 report. Recommendation: We recommend that the School enhance procedures and internal controls over the applicable reporting requirements to ensure compliance with federal regulations as well as the grant agreements. Views of Responsible Officials and Planned Corrective Actions: We concur. We will review our processes and ensure timely and accurate completion of reporting. We will complete the corrective action no later than June 30, 2025.
Information on the federal program: Subject: COVID-19 – Education Stabilization Fund – Reporting Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the ‘Internal Control Integrated Framework’, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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 implemented a review control over the annual data reports; however, it was not sufficient enough to detect and prevent errors in annual data reports submitted to the Indiana Department of Education. Effect: Annual data reports submitted during the audit period to the Indiana Department of Education contained material errors compared to underlying transaction detail for the period reported. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the following exceptions in data reporting submissions: ESSER I Year 4, ESSER II Year 3, and ESSER III Year 3 expenditures for the period of July 1, 2021 through June 30, 2022 ($0, $360,404, and $12,974, respectively) did not agree to underlying expenditure records ($60,937, $490,934, and $477,914, respectively). ESSER II Year 4 and ESSER III Year 4 expenditures for the period of July 1, 2022 through June 30, 2023 ($57,667 and $363,486, respectively) did not agree to underlying expenditure records ($361 and $400,473, respectively). Identification as a repeat finding: No. Recommendation: We recommend management review internal controls over the review of annual data reports to ensure the data to be submitted agrees to underlying transaction detail or other supporting documentation prior to the submission of the annual data report. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: COVID-19 – Education Stabilization Fund – Reporting Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the ‘Internal Control Integrated Framework’, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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 implemented a review control over the annual data reports; however, it was not sufficient enough to detect and prevent errors in annual data reports submitted to the Indiana Department of Education. Effect: Annual data reports submitted during the audit period to the Indiana Department of Education contained material errors compared to underlying transaction detail for the period reported. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the following exceptions in data reporting submissions: ESSER I Year 4, ESSER II Year 3, and ESSER III Year 3 expenditures for the period of July 1, 2021 through June 30, 2022 ($0, $360,404, and $12,974, respectively) did not agree to underlying expenditure records ($60,937, $490,934, and $477,914, respectively). ESSER II Year 4 and ESSER III Year 4 expenditures for the period of July 1, 2022 through June 30, 2023 ($57,667 and $363,486, respectively) did not agree to underlying expenditure records ($361 and $400,473, respectively). Identification as a repeat finding: No. Recommendation: We recommend management review internal controls over the review of annual data reports to ensure the data to be submitted agrees to underlying transaction detail or other supporting documentation prior to the submission of the annual data report. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: COVID-19 – Education Stabilization Fund – Reporting Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the ‘Internal Control Integrated Framework’, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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 implemented a review control over the annual data reports; however, it was not sufficient enough to detect and prevent errors in annual data reports submitted to the Indiana Department of Education. Effect: Annual data reports submitted during the audit period to the Indiana Department of Education contained material errors compared to underlying transaction detail for the period reported. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the following exceptions in data reporting submissions: ESSER I Year 4, ESSER II Year 3, and ESSER III Year 3 expenditures for the period of July 1, 2021 through June 30, 2022 ($0, $360,404, and $12,974, respectively) did not agree to underlying expenditure records ($60,937, $490,934, and $477,914, respectively). ESSER II Year 4 and ESSER III Year 4 expenditures for the period of July 1, 2022 through June 30, 2023 ($57,667 and $363,486, respectively) did not agree to underlying expenditure records ($361 and $400,473, respectively). Identification as a repeat finding: No. Recommendation: We recommend management review internal controls over the review of annual data reports to ensure the data to be submitted agrees to underlying transaction detail or other supporting documentation prior to the submission of the annual data report. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: COVID-19 – Education Stabilization Fund – Reporting Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the ‘Internal Control Integrated Framework’, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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 implemented a review control over the annual data reports; however, it was not sufficient enough to detect and prevent errors in annual data reports submitted to the Indiana Department of Education. Effect: Annual data reports submitted during the audit period to the Indiana Department of Education contained material errors compared to underlying transaction detail for the period reported. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the following exceptions in data reporting submissions: ESSER I Year 4, ESSER II Year 3, and ESSER III Year 3 expenditures for the period of July 1, 2021 through June 30, 2022 ($0, $360,404, and $12,974, respectively) did not agree to underlying expenditure records ($60,937, $490,934, and $477,914, respectively). ESSER II Year 4 and ESSER III Year 4 expenditures for the period of July 1, 2022 through June 30, 2023 ($57,667 and $363,486, respectively) did not agree to underlying expenditure records ($361 and $400,473, respectively). Identification as a repeat finding: No. Recommendation: We recommend management review internal controls over the review of annual data reports to ensure the data to be submitted agrees to underlying transaction detail or other supporting documentation prior to the submission of the annual data report. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Criteria: Per 2 CFR 200.328 and the Cooperative Agreement with the US Army, the Reporting Requirements state that (a) interim performance reports must be submitted in electronic form, (b) contain detail technical progress to date and report on all problems, technical issues, or major developments that arose during the reporting period, and (c) be submitted quarterly within 30 days after completion of the reporting period throughout the term of the agreement. Condition: During the process of performing our audit, we noted that the interim performance report for two of two quarters selected during the period July 1, 2023 – June 30, 2024 were not submitted within 30 days after completion of the reporting period. Questioned costs: None noted Effect: The auditor must report late submission of interim performance reports as audit findings in a schedule of findings and questioned costs. The Association is not in compliance with the interim performance reporting deadline. Cause: The interim performance reports were all completed on the same date and were submitted, via e-mail, in one batch for the entire period of July 1, 2023 – June 30, 2024, in October 2024 instead of the required reporting due dates for each quarter. Recommendation: We recommend that the Association monitor reporting compliance by understanding the reporting requirements and establishing controls and processes to complete the timely filing of the interim performance reporting package by the due date. Management’s Corrective Action Plan: Management has indicated that they have put certain procedures in place as detailed in the Corrective Action Plan located in Appendix A of the Schedule of Findings and Questioned Costs.
FINDING 2024-002 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, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER II and ESSER III amounts reported on the Year 2 report ($241,092 and $180,266, respectively) did not agree to the underlying expenditure records ($226,005 and $88,368, respectively, for the period of July 1, 2021 through June 30, 2022). We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($136,199 and $255,826, respectively) did not agree to the underlying expenditure records ($170,866 and $192,735, respectively, for the period of July 1, 2021 through June 30, 2022). Additionally, the number of employees reported on the Year 4CrossAct report was overstated by 4 employees. 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 2024-002 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, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 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) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER II and ESSER III amounts reported on the Year 2 report ($241,092 and $180,266, respectively) did not agree to the underlying expenditure records ($226,005 and $88,368, respectively, for the period of July 1, 2021 through June 30, 2022). We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($136,199 and $255,826, respectively) did not agree to the underlying expenditure records ($170,866 and $192,735, respectively, for the period of July 1, 2021 through June 30, 2022). Additionally, the number of employees reported on the Year 4CrossAct report was overstated by 4 employees. 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.
Geographic Programs - Great Lakes Restoration Initiative—Federal Financial Reporting Background: The DNR receives federal funding from the U.S. Environmental Protection Agency (EPA) for the GLRI program. The objective of the GLRI program is to advance protection and restoration of the Great Lakes Basin Ecosystem through the funding of various projects. Criteria: Under 2 CFR s. 200.328, and at least annually, DNR must submit the Federal Financial Report (FFR) to the EPA for each project of the GLRI program. DNR is required to submit annual FFRs no later than 90 calendar days after the project’s reporting period and final FFRs no later than 120 calendar days after the conclusion of the project’s period of performance. The EPA may grant extension of reporting due dates when requested and justified by the recipient. Condition: DNR did not submit FFRs in a timely manner for six of the nine annual FFR reports we tested for the GLRI program, and DNR did not request an extension of reporting due dates from the EPA. The six annual FFRs we tested were completed between 17 and 219 calendar days past the due date. For example, four FFRs we tested had a reporting period end date of March 31, 2024, and a report due date of June 29, 2024. DNR filed the annual FFRs on November 1, 2024, which was 125 days past the due date. For five of the six annual FFRs we tested that were late, we noted that DNR submitted the FFRs after our inquiry and request to review the FFRs. For each of the six FFRs, we found that DNR retained documentation to support the amounts included in the reports and the information in the FFRs was accurate. Context: During FY 2023-24, DNR expended $15.5 million under the GLRI program. We interviewed DNR staff to gain an understanding of its procedures for preparing FFRs for GLRI projects. During FY 2023-24, DNR was required to submit 20 annual FFRs and 2 final FFRs for GLRI projects to the EPA. We reviewed nine of the annual FFRs and the 2 final FFRs. We requested DNR’s documentation to support the information reported in the FFRs. Questioned Costs: None. Effect: The EPA did not have timely financial reports to assess DNR’s management of GLRI projects. Cause: DNR did not have sufficient procedures in place to track when annual FFRs were required to be submitted for GLRI projects. Although DNR’s procedures require the GLRI program’s grant accountant to monitor FFR due dates, that position was vacant during FY 2023-24 and filled in FY 2024-25. DNR indicated that other grant accountants completed some reporting for the GLRI program, but not all reporting was completed until after we made inquiries of DNR staff in October 2024. DNR staff indicated that they began to implement changes in October 2024 to more effectively track FFR due dates by having DNR’s Management and Grant Accounting Section Chief monitor the FFR reporting schedule. Recommendation: We recommend the Wisconsin Department of Natural Resources develop and implement policies and procedures for tracking and submitting timely federal financial reports for the Geographic Programs - Great Lakes Restoration Initiative program. Finding 2024-800: Geographic Programs - Great Lakes Restoration Initiative—Federal Financial Reporting Geographic Programs - Great Lakes Restoration Initiative (Assistance Listing number 66.469) Award Numbers Award Years 00E02393 2018 00E02456 2019 00E02487 2019 00E02824 2020 00E02979 2021 00E02975 2021 00E03010 2021 00E03068 2021 03E00712 2022 01E03010 2022 00E03149 2022 00E03187 2022 00E03188 2022 00E03250 2022 00E03252 2022 00E03589 2023 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Natural Resources: The Wisconsin Department of Natural Resources agrees with the audit finding and recommendation.
Geographic Programs - Great Lakes Restoration Initiative—Federal Financial Reporting Background: The DNR receives federal funding from the U.S. Environmental Protection Agency (EPA) for the GLRI program. The objective of the GLRI program is to advance protection and restoration of the Great Lakes Basin Ecosystem through the funding of various projects. Criteria: Under 2 CFR s. 200.328, and at least annually, DNR must submit the Federal Financial Report (FFR) to the EPA for each project of the GLRI program. DNR is required to submit annual FFRs no later than 90 calendar days after the project’s reporting period and final FFRs no later than 120 calendar days after the conclusion of the project’s period of performance. The EPA may grant extension of reporting due dates when requested and justified by the recipient. Condition: DNR did not submit FFRs in a timely manner for six of the nine annual FFR reports we tested for the GLRI program, and DNR did not request an extension of reporting due dates from the EPA. The six annual FFRs we tested were completed between 17 and 219 calendar days past the due date. For example, four FFRs we tested had a reporting period end date of March 31, 2024, and a report due date of June 29, 2024. DNR filed the annual FFRs on November 1, 2024, which was 125 days past the due date. For five of the six annual FFRs we tested that were late, we noted that DNR submitted the FFRs after our inquiry and request to review the FFRs. For each of the six FFRs, we found that DNR retained documentation to support the amounts included in the reports and the information in the FFRs was accurate. Context: During FY 2023-24, DNR expended $15.5 million under the GLRI program. We interviewed DNR staff to gain an understanding of its procedures for preparing FFRs for GLRI projects. During FY 2023-24, DNR was required to submit 20 annual FFRs and 2 final FFRs for GLRI projects to the EPA. We reviewed nine of the annual FFRs and the 2 final FFRs. We requested DNR’s documentation to support the information reported in the FFRs. Questioned Costs: None. Effect: The EPA did not have timely financial reports to assess DNR’s management of GLRI projects. Cause: DNR did not have sufficient procedures in place to track when annual FFRs were required to be submitted for GLRI projects. Although DNR’s procedures require the GLRI program’s grant accountant to monitor FFR due dates, that position was vacant during FY 2023-24 and filled in FY 2024-25. DNR indicated that other grant accountants completed some reporting for the GLRI program, but not all reporting was completed until after we made inquiries of DNR staff in October 2024. DNR staff indicated that they began to implement changes in October 2024 to more effectively track FFR due dates by having DNR’s Management and Grant Accounting Section Chief monitor the FFR reporting schedule. Recommendation: We recommend the Wisconsin Department of Natural Resources develop and implement policies and procedures for tracking and submitting timely federal financial reports for the Geographic Programs - Great Lakes Restoration Initiative program. Finding 2024-800: Geographic Programs - Great Lakes Restoration Initiative—Federal Financial Reporting Geographic Programs - Great Lakes Restoration Initiative (Assistance Listing number 66.469) Award Numbers Award Years 00E02393 2018 00E02456 2019 00E02487 2019 00E02824 2020 00E02979 2021 00E02975 2021 00E03010 2021 00E03068 2021 03E00712 2022 01E03010 2022 00E03149 2022 00E03187 2022 00E03188 2022 00E03250 2022 00E03252 2022 00E03589 2023 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Natural Resources: The Wisconsin Department of Natural Resources agrees with the audit finding and recommendation.
Internal Control over Compliance - Timing of Expenditures Reported in the Schedule of Expenditure of Federal Awards (SEFA) Requires Alignment with Federal Guidelines Federal Program Information: Federal Assistance Listing Number: 16.753 Federal Program Name: Byrne Discretionary Community Project Funding /Byrne Discretionary Grants Program Federal Agency: U.S. Department of Justice Pass-through Agency: State of California Bureau of Justice Assistance Federal Award Number: 15PBJA-22-GG-00264-BRND Federal Award Year: March 15, 2022 to September 30, 2023 Criteria: Per 2 CFR 200.510(b), Financial Statements: Schedule of Expenditures of Federal Awards (SEFA), the SEFA must include the total federal awards expended, as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended, and must align with the same reporting period as the auditee's financial statements. 2 CFR 200.502(a) specifies that the timing of when a federal award is expended is based on the occurrence of the activity related to the award. Additionally, 2 CFR 200.328, Financial Reporting, emphasizes the importance of submitting performance and financial reports that are complete, accurate, and consistent with the accounting records. Specifically: • Financial data must be derived from and consistent with the recipient's accounting records. • Reports must include all financial information in accordance with federal requirements. Condition: During our audit, we identified a discrepancy involving the federal expenditures for the Byrne Discretionary Community Project Funding/Byrne Discretionary Grants Program, totaling $1,000,000. These expenditures were incurred in FY 2023 but were reported in the SEFA for FY 2024. Additionally, we noted that the reports submitted to the federal agency lacked evident review controls to verify their completeness, accuracy, and consistency with accounting records. Cause and Effect: The City inadvertently excluded the federal expenditure for this grant from the FY2023 SEFA due to an unintentional oversight. This error was later identified and addressed by including the expenditure in the FY2024 SEFA. The oversight occurred because the equipment expenditure tied to this grant was recorded with an effective date of June 2023, while the corresponding grant funds were received and recorded in November 2023. This misalignment in timing created confusion regarding the proper fiscal year in which the expenditure should be reported. Additionally, this was a one-time funding and expenditure, and the City lacked prior experience in both receiving and reporting such grants. The absence of established procedures or review controls specific to this type of funding further contributed to the oversight. Collectively, these factors led to the omission of the expenditure from the FY 2023 SEFA, highlighting the need for improved processes to prevent similar issues in the future. Recommendation: We recommend that the City implement enhanced procedures for reviewing and reconciling grant-related expenditures and receipts to ensure accurate and timely reporting in the SEFA. Specifically, the City should: • Establish a process to track one-time or unique grants separately to ensure their proper inclusion in the correct fiscal year. • Conduct cross-departmental reviews to align the timing of expenditure recording with grant fund receipts. • Provide training to staff on federal reporting requirements, including the accurate preparation of the SEFA in compliance with 2 CFR 200.510(b) and 2 CFR 200.502(a). • Periodically audit SEFA preparation processes to identify and address any potential discrepancies promptly. • Implement thorough pre-submission reviews to ensure reports are accurate, complete, and consistent with accounting records, using checklists or tools if necessary. Views of Responsible Officials and Planned Corrective Action: The City internally identify improvement opportunities in managing grants. As a part of the City’s grant oversight improvement efforts, the City began implementing various processes and internal controls surrounding grant monitoring, which improves the SEFA drafting process and mitigates risks of future inaccuracies. These efforts began in early 2024 and include the following: • Creation of a grant policy that provides City staff with guidance, information, and expectations surrounding grants. • Creation of a master grants database that lists the general ledger fund, applicable project ledger references, status, grant type, start/end dates, granting agency, pass-through agency, grant name, assistance listing numbers, grant amounts, and the grant manager for each grant. This database is now used to verify the completeness and accuracy of the SEFA (beginning FY24). • Formal quarterly monitoring. Each quarter, the City will formally review the grants database with department contacts and grant managers to verify the completeness and accuracy of the database. The City is formalizing this process and plans to include department signoffs evidencing the review process. If any items are missing, the missing component will be identified and added to the database on a timely basis. The City will also utilize this quarterly process to review the grants policy to ensure grant managers are aware of the requirements related to their grants. • The City is in the process of formalizing the SEFA drafting process utilized during the FY24 SEFA preparation, which includes additional mitigating procedures such as reviewing all next FY federal receipts to ensure none of them relate to the SEFA year federal expenditures. Personnel Responsible for Implementation: Marvin Lopez Position of Responsible Personnel: Deputy Administrative Services Director (Fiscal Services) Expected Date of Implementation: June 30, 2025
Condition The required Annual Project and Expenditure (P & E) Report was submitted late. The report required for the year ended March 31, 2024, was due on April 30, 2024. Criteria 2 CFR 200.328 and 31 CFR section 35.4(c) required financial and performance reporting information. The information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting. Context We request the report submitted during the fiscal year to be audited and observed the report was submitted after the due date. Cause The Municipality failed in submission of the required report on time due to lack of knowledge of requisites and instructions about the completion of the report. Effect The Municipality cannot comply with federal regulations; the evaluation of the federal funds use cannot be observed and monitored by the Agency. The situation could affect the program outcomes. Questioned Costs Not determined Recommendation We recommend the Municipality maintain the schedule of the due date of required reports.
Condition The required Annual Project and Expenditure (P & E) Report was submitted late. The report required for the year ended March 31, 2024, was due on April 30, 2024. Criteria 2 CFR 200.328 and 31 CFR section 35.4(c) required financial and performance reporting information. The information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting. Context We request the report submitted during the fiscal year to be audited and observed the report was submitted after the due date. Cause The Municipality failed in submission of the required report on time due to lack of knowledge of requisites and instructions about the completion of the report. Effect The Municipality cannot comply with federal regulations; the evaluation of the federal funds use cannot be observed and monitored by the Agency. The situation could affect the program outcomes. Questioned Costs Not determined Recommendation We recommend the Municipality maintain the schedule of the due date of required reports.
Finding Reference 2024-003 Federal Agency: U.S. Department of Homeland Security Pass-through Agency: Central Office of Recovery, Reconstruction and Resiliency of Puerto Rico (COR3) Federal Emergency Management Agency (FEMA) Program: Disaster Grants – Public Assistance (Presidentially Declared Disaster (ALN 97.036) Compliance Requirement: Reporting (L) Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC) Statement of Condition: In our Reporting Test, we evaluated the Quarterly Progress Reports of a total of eight (8) projects for two quarters of fiscal year 2023-2024. During our audit procedures, we noted that the reports did not agree with the accounting and project records. Criteria: 2 CFR 200.302 (a) states that the states’ and other non-Federal entities’ financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Also, 2 CFR 200.302 (b) (2) states that the financial management system of each non-Federal entity must provide 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 of Condition: The Municipality’s accounting controls and procedures fail to ensure accurate, current and complete disclosure of the financial results of federal assisted activities. Effect of Condition: The expenses reported in the Quarterly Progress Reports do not agree with the accounting records. Recommendation: We recommend the Program Administrators reconcile the differences between the quarterly report and the accounting records before the submission to the pass-through entity. Questioned Cost: None. Prior Year Findings: Yes. This finding is similar to prior-year finding 2023-003. Views of Responsible Officials and Planned Corrective Actions: We concur with the finding. In the quarterly reports (QPR), accumulated expenses are reported up to the closing date of each quarter. These expenses are assigned to the quarter in which the contractor invoices the completed work. However, in some cases, the payment is made in the quarter following the one in which the invoice was issued. This discrepancy may cause the expenses to not be accurately reflected in the quarter they were reported during the audit process. This situation will be addressed prospectively, and expenses will be assigned to the quarter in which the payment is made. Implementation Date: Fiscal Year 2025-2026. Responsible Person: José A. Torres Otero Program Accountant
Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness 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 implemented a review control over the annual data reports, however, it was not sufficient enough to detect and prevent errors in annual data reports submitted to the Indiana Department of Education. Effect: Annual data reports submitted during the audit period to the Indiana Department of Education contained material errors compared to underlying transaction detail for the period reported. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER I amount reported on the Year 3 report ($266,367) did not agree to the underlying expenditure record ($96,019) for the period of July 1, 2021 through June 30, 2022. Additionally, the ESSER II and ESSER III amount reported on the Year 2 report ($1,433,207, and $643,771, respectively) did not agree to the underlying expenditure records ($1,400,698, and $630,465 respectively) for the period of July 1, 2021 through June 30, 2022. We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($4,291 and $1,522,378, respectively) did not agree to the underlying expenditure records ($4,590 and $1,774,722, respectively) for the period of July 1, 2022 through June 30, 2023. Additionally, the School Corporation was not able to provide any support for the 288 full-time equivalent (FTE) positions on September 30, 2022, reported on the Year 2 CrossAct report or the 338 full-time equivalent (FTE) positions on September 30, 2023, reported on the Year 3 CrossAct report. Crowe also noted that the School Corporation reported 0 full-time equivalent (FTE) positions paid by ESSER on September 2023, but there were ESSER positions reported in the ESSER applications. Identification as a repeat finding: No. Recommendation: We recommend management review internal controls over the review of annual data reports to ensure the data to be submitted agrees to underlying transaction detail or other supporting documentation prior to the submission of the annual data report. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness 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 implemented a review control over the annual data reports, however, it was not sufficient enough to detect and prevent errors in annual data reports submitted to the Indiana Department of Education. Effect: Annual data reports submitted during the audit period to the Indiana Department of Education contained material errors compared to underlying transaction detail for the period reported. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER I amount reported on the Year 3 report ($266,367) did not agree to the underlying expenditure record ($96,019) for the period of July 1, 2021 through June 30, 2022. Additionally, the ESSER II and ESSER III amount reported on the Year 2 report ($1,433,207, and $643,771, respectively) did not agree to the underlying expenditure records ($1,400,698, and $630,465 respectively) for the period of July 1, 2021 through June 30, 2022. We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($4,291 and $1,522,378, respectively) did not agree to the underlying expenditure records ($4,590 and $1,774,722, respectively) for the period of July 1, 2022 through June 30, 2023. Additionally, the School Corporation was not able to provide any support for the 288 full-time equivalent (FTE) positions on September 30, 2022, reported on the Year 2 CrossAct report or the 338 full-time equivalent (FTE) positions on September 30, 2023, reported on the Year 3 CrossAct report. Crowe also noted that the School Corporation reported 0 full-time equivalent (FTE) positions paid by ESSER on September 2023, but there were ESSER positions reported in the ESSER applications. Identification as a repeat finding: No. Recommendation: We recommend management review internal controls over the review of annual data reports to ensure the data to be submitted agrees to underlying transaction detail or other supporting documentation prior to the submission of the annual data report. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness 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 implemented a review control over the annual data reports, however, it was not sufficient enough to detect and prevent errors in annual data reports submitted to the Indiana Department of Education. Effect: Annual data reports submitted during the audit period to the Indiana Department of Education contained material errors compared to underlying transaction detail for the period reported. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER I amount reported on the Year 3 report ($266,367) did not agree to the underlying expenditure record ($96,019) for the period of July 1, 2021 through June 30, 2022. Additionally, the ESSER II and ESSER III amount reported on the Year 2 report ($1,433,207, and $643,771, respectively) did not agree to the underlying expenditure records ($1,400,698, and $630,465 respectively) for the period of July 1, 2021 through June 30, 2022. We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($4,291 and $1,522,378, respectively) did not agree to the underlying expenditure records ($4,590 and $1,774,722, respectively) for the period of July 1, 2022 through June 30, 2023. Additionally, the School Corporation was not able to provide any support for the 288 full-time equivalent (FTE) positions on September 30, 2022, reported on the Year 2 CrossAct report or the 338 full-time equivalent (FTE) positions on September 30, 2023, reported on the Year 3 CrossAct report. Crowe also noted that the School Corporation reported 0 full-time equivalent (FTE) positions paid by ESSER on September 2023, but there were ESSER positions reported in the ESSER applications. Identification as a repeat finding: No. Recommendation: We recommend management review internal controls over the review of annual data reports to ensure the data to be submitted agrees to underlying transaction detail or other supporting documentation prior to the submission of the annual data report. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-004 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 Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013 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. Management misinterpreted the instructions for the reporting requirements and believed that they did not need to fill in the expense information as an LEA. 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 one Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER II amount reported for the reports covering the FY23 time period ($4,934,473) did not agree to the underlying expenditure records ($4,801,053) for the period of July 1, 2022 through June 30, 2023. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2023-006. 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.
2024-032 - Inadequate Controls over and Noncompliance with Federal Financial Reporting State Entity: Louisiana Department of Health - Office of Public Health (OPH) Award Year: 2024 Award Number: NU90TP922016 Compliance Requirement: Reporting Repeat Finding: No See Schedule of Findings and Questioned Costs for chart/table. Condition: The Louisiana Department of Health - Office of Public Health (OPH) did not have adequate controls in place to ensure that federal financial reports were accurate, current, and complete prior to being submitted to the federal agency for the Public Health Emergency Preparedness federal program for the June 30, 2024 reporting period. OPH's annual report for the reporting period June 30, 2024 improperly included expenditures totaling $146,598 from the period July 2024 through September 2024. Criteria: 2 CFR 200.302(b)(2) states accurate, current, and complete disclosure of the financial results of each federal award or program in accordance with the reporting requirements set forth in 2 CFR 200.328 and 200.329 is required. In addition, the U.S. Centers for Disease Control and Prevention guidance indicates that the report must include only those funds authorized and expended during the timeframe of the report. 2 CFR 200.303(a) requires that non-federal entities receiving federal awards establish and maintain effective internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Cause: OPH did not have adequate controls in place to ensure the federal financial report only included expenditures for the period being reported prior to submission to the federal agency. Effect: Failure to establish adequate controls over financial reporting could result in inaccurate information being reported to the federal agency. Recommendation: OPH should design and implement controls to ensure all information contained in the financial reports submitted to federal agencies is accurate, current, and complete for the reporting period covered under the report. Management’s Response and Corrective Action Plan: Management did not concur with the finding stating that the amount in question is immaterial and does not misstate the federal financial report. To address the control weakness, management provided a corrective action plan (B-36).
2024-024 - Inadequate Controls over Reporting and Matching Federal Compliance Requirements for the Medicaid and Children's Health Insurance Programs State Entity: Louisiana Department of Health (LDH) Award Years: 2023, 2024 Award Numbers: 2305LA5021, 2305LA5MAP, 2405LA5021, 2405LA5MAP Compliance Requirement: Matching, Level of Effort, Earmarking; Reporting Repeat Finding: Yes (Prior Year Finding No. 2023-022) See Schedule of Findings and Questioned Costs for chart/table. Condition: For the second consecutive year, LDH did not have adequate controls in place to ensure compliance with reporting and matching requirements for the Medical Assistance Program (Medicaid) and the Children’s Health Insurance Program (CHIP) for all four quarters of fiscal year 2024. The following errors were noted throughout the Centers for Medicare and Medicaid Services (CMS) quarterly federal expenditure reports prepared by LDH: • For each quarter of fiscal year 2024, quarterly adjustment expenditures were either incorrectly recorded on the CMS quarterly federal expenditure reports and/or within the financial statements. • For both the March 31, 2024 and June 30, 2024 reports LDH incorrectly completed the Medicaid Drug Rebate Schedule 64.9R. For the March 31, 2024 report, an invoice amount of $0 was reported as the rebates invoiced in this quarter rather than the correct amount of $243,910,667. For the June 30, 2024 report, LDH incorrectly adjusted the schedule 64.9R resulting in numerous errors and a net understatement of $220,130,454 in an effort to correct the error from the March 31, 2024 report. • LDH incorrectly overstated federal fiscal year 2023 Disproportionate State Hospital (DSH) payments by $820,395 on schedule 64.9D for the September 30, 2023 report. Criteria: According to 2 CFR 200.302(b)(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 is required. The Medicaid and CHIP programs require quarterly reporting to CMS detailing expenditures by category of service for which states are entitled to federal reimbursement. The federal expenditures reported in the quarterly reports are used to reconcile the draws of federal funds. In addition, a good system of internal controls require that policies and procedures are established and followed to ensure compliance with federal requirements. Cause: LDH did not have adequate controls in place to ensure the reconciliation of the expenditures recorded in LDH’s financial statements to the expenditures reported to CMS. In addition, the quarterly adjustments were not properly reviewed to ensure that adjustments affecting the financial statements were properly recorded. Effect: As a result, LDH failed to detect multiple errors between the financial statements and CMS quarterly federal expenditure reports, as well as errors on various schedules in the quarterly reports. Uncorrected errors in the reports increase the risk that federal funds will be overdrawn or underdrawn and place LDH in noncompliance with federal regulations. Recommendation: LDH management should strengthen controls over preparation and review of the quarterly federal expenditure reports and quarterly adjustments to ensure federal expenditures are accurately reported. In addition, LDH management should incorporate a reconciliation of federal expenditures in the financial statements to federal expenditures reported to CMS. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-17).
2024-024 - Inadequate Controls over Reporting and Matching Federal Compliance Requirements for the Medicaid and Children's Health Insurance Programs State Entity: Louisiana Department of Health (LDH) Award Years: 2023, 2024 Award Numbers: 2305LA5021, 2305LA5MAP, 2405LA5021, 2405LA5MAP Compliance Requirement: Matching, Level of Effort, Earmarking; Reporting Repeat Finding: Yes (Prior Year Finding No. 2023-022) See Schedule of Findings and Questioned Costs for chart/table. Condition: For the second consecutive year, LDH did not have adequate controls in place to ensure compliance with reporting and matching requirements for the Medical Assistance Program (Medicaid) and the Children’s Health Insurance Program (CHIP) for all four quarters of fiscal year 2024. The following errors were noted throughout the Centers for Medicare and Medicaid Services (CMS) quarterly federal expenditure reports prepared by LDH: • For each quarter of fiscal year 2024, quarterly adjustment expenditures were either incorrectly recorded on the CMS quarterly federal expenditure reports and/or within the financial statements. • For both the March 31, 2024 and June 30, 2024 reports LDH incorrectly completed the Medicaid Drug Rebate Schedule 64.9R. For the March 31, 2024 report, an invoice amount of $0 was reported as the rebates invoiced in this quarter rather than the correct amount of $243,910,667. For the June 30, 2024 report, LDH incorrectly adjusted the schedule 64.9R resulting in numerous errors and a net understatement of $220,130,454 in an effort to correct the error from the March 31, 2024 report. • LDH incorrectly overstated federal fiscal year 2023 Disproportionate State Hospital (DSH) payments by $820,395 on schedule 64.9D for the September 30, 2023 report. Criteria: According to 2 CFR 200.302(b)(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 is required. The Medicaid and CHIP programs require quarterly reporting to CMS detailing expenditures by category of service for which states are entitled to federal reimbursement. The federal expenditures reported in the quarterly reports are used to reconcile the draws of federal funds. In addition, a good system of internal controls require that policies and procedures are established and followed to ensure compliance with federal requirements. Cause: LDH did not have adequate controls in place to ensure the reconciliation of the expenditures recorded in LDH’s financial statements to the expenditures reported to CMS. In addition, the quarterly adjustments were not properly reviewed to ensure that adjustments affecting the financial statements were properly recorded. Effect: As a result, LDH failed to detect multiple errors between the financial statements and CMS quarterly federal expenditure reports, as well as errors on various schedules in the quarterly reports. Uncorrected errors in the reports increase the risk that federal funds will be overdrawn or underdrawn and place LDH in noncompliance with federal regulations. Recommendation: LDH management should strengthen controls over preparation and review of the quarterly federal expenditure reports and quarterly adjustments to ensure federal expenditures are accurately reported. In addition, LDH management should incorporate a reconciliation of federal expenditures in the financial statements to federal expenditures reported to CMS. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-17).
2024-024 - Inadequate Controls over Reporting and Matching Federal Compliance Requirements for the Medicaid and Children's Health Insurance Programs State Entity: Louisiana Department of Health (LDH) Award Years: 2023, 2024 Award Numbers: 2305LA5021, 2305LA5MAP, 2405LA5021, 2405LA5MAP Compliance Requirement: Matching, Level of Effort, Earmarking; Reporting Repeat Finding: Yes (Prior Year Finding No. 2023-022) See Schedule of Findings and Questioned Costs for chart/table. Condition: For the second consecutive year, LDH did not have adequate controls in place to ensure compliance with reporting and matching requirements for the Medical Assistance Program (Medicaid) and the Children’s Health Insurance Program (CHIP) for all four quarters of fiscal year 2024. The following errors were noted throughout the Centers for Medicare and Medicaid Services (CMS) quarterly federal expenditure reports prepared by LDH: • For each quarter of fiscal year 2024, quarterly adjustment expenditures were either incorrectly recorded on the CMS quarterly federal expenditure reports and/or within the financial statements. • For both the March 31, 2024 and June 30, 2024 reports LDH incorrectly completed the Medicaid Drug Rebate Schedule 64.9R. For the March 31, 2024 report, an invoice amount of $0 was reported as the rebates invoiced in this quarter rather than the correct amount of $243,910,667. For the June 30, 2024 report, LDH incorrectly adjusted the schedule 64.9R resulting in numerous errors and a net understatement of $220,130,454 in an effort to correct the error from the March 31, 2024 report. • LDH incorrectly overstated federal fiscal year 2023 Disproportionate State Hospital (DSH) payments by $820,395 on schedule 64.9D for the September 30, 2023 report. Criteria: According to 2 CFR 200.302(b)(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 is required. The Medicaid and CHIP programs require quarterly reporting to CMS detailing expenditures by category of service for which states are entitled to federal reimbursement. The federal expenditures reported in the quarterly reports are used to reconcile the draws of federal funds. In addition, a good system of internal controls require that policies and procedures are established and followed to ensure compliance with federal requirements. Cause: LDH did not have adequate controls in place to ensure the reconciliation of the expenditures recorded in LDH’s financial statements to the expenditures reported to CMS. In addition, the quarterly adjustments were not properly reviewed to ensure that adjustments affecting the financial statements were properly recorded. Effect: As a result, LDH failed to detect multiple errors between the financial statements and CMS quarterly federal expenditure reports, as well as errors on various schedules in the quarterly reports. Uncorrected errors in the reports increase the risk that federal funds will be overdrawn or underdrawn and place LDH in noncompliance with federal regulations. Recommendation: LDH management should strengthen controls over preparation and review of the quarterly federal expenditure reports and quarterly adjustments to ensure federal expenditures are accurately reported. In addition, LDH management should incorporate a reconciliation of federal expenditures in the financial statements to federal expenditures reported to CMS. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-17).
Agency: Employment and Training Administration Office of Grants Management ALN: 17.289 Federal Award Identification Number: 23A60C9000032-01-00 Criteria: Under the Committee of Sponsoring Organization framework, control activities are established through policies and procedures that help ensure that management’s directives to mitigate risks to the achievement of objectives are carried out. Segregation of duties is typically built into the selection and development of control activities. According to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 200.327 and 200.328, recipients of federal awards are required to submit performance and financial reports by the due dates specified in the terms and conditions of the federal awards. Context and Condition: There was an overall lack of segregation of duties surrounding the preparation and submission of grant reimbursement requests as the VP of Finance performed this function himself with no review and approval. Cause: The Entity failed to establish a set of internal control procedures to ensure segregation of duties and an appropriate review and approval process. Effect: There was a lack of adequate review and oversight over grant reporting. Repeat Finding: No Recommendation: We recommend that the Entity establish internal control procedures that incorporate segregation of duties and add a level of review and approval for grant reporting. Views of Responsible Officials and Planned Corrective Action: See attached corrective action plan. Questioned Costs: None
2024–002: Reporting – Significant Deficiency Federal Agency: U.S. Department of Education Federal Program Name: Fund for the Improvement of Postsecondary Education Assistance Listing Number: 84.116Z Federal Award Identification Number and Year: N/A; 2023-2024 Award Period: July 1, 2023 – June 30, 2024 Pass-Through Agency: N/A Pass-Through Numbers: N/A Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: All recipients of a multi-year discretionary award must submit an annual Grant Performance Report (34 CFR § 75.118). The annual performance report shall provide the most current performance and financial expenditure information that is sufficient to meet the reporting requirements of 2 CFR § 200.328, 200.329, and 34 CFR § 75.720. Condition/Context: During testing it was noted that the College did not submit the required annual report. Questioned costs: None Cause: The College does not have a control in place to ensure reporting requirements are met. Effect: Non-compliance with reporting requirements. Repeat Finding: No Recommendation: We recommend the College should establish a policy that provides the guidance required to comply and address regulatory reporting requirements. Views of responsible officials: There is no disagreement with the audit finding.
FINDING 2024-006 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): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder and excel files. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted one ESSER I Annual Data Report, two ESSER II Annual Data Reports, and two ESSER III Annual Data Reports, for a total of five reports. There was no documented evidence provided for audit that supported an oversight or review process was in place to prevent, and detect and correct, errors on the five reports. Of the five reports tested, two contained the following errors: ESSER II, Year 3 Annual Data Report Key line items "Addressing Physical Health and Safety Uses: Personnel Services - Benefits" and "Addressing Physical Health and Safety Uses: Supplies" were understated by $19,243 and $664,540, respectively. INDIANA STATE BOARD OF ACCOUNTS 26 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $1,002,932; however, the ledger had total expenses for the award, for that period, of $817,390. ESSER III, Year 3 Annual Data Report Key line items "Mandatory Subgrant Funds - Exclusive of Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Salaries" and "Mandatory Subgrant Funds - Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Benefits" were overstated by $46,500 and $3,500, respectively. Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $2,072,695; however, the ledger had total expenses for the award, for that period, of $2,074,793. The lack in internal controls was systemic throughout the audit period. The noncompliance was isolated to fiscal year 2023-2024. 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 federallyfunded 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." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." INDIANA STATE BOARD OF ACCOUNTS 27 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Due to staffing changes, the documentation for an oversight and review process was not identified and presented for audit. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, errors on reports remained undetected and uncorrected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective 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 2024-006 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): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder and excel files. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted one ESSER I Annual Data Report, two ESSER II Annual Data Reports, and two ESSER III Annual Data Reports, for a total of five reports. There was no documented evidence provided for audit that supported an oversight or review process was in place to prevent, and detect and correct, errors on the five reports. Of the five reports tested, two contained the following errors: ESSER II, Year 3 Annual Data Report Key line items "Addressing Physical Health and Safety Uses: Personnel Services - Benefits" and "Addressing Physical Health and Safety Uses: Supplies" were understated by $19,243 and $664,540, respectively. INDIANA STATE BOARD OF ACCOUNTS 26 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $1,002,932; however, the ledger had total expenses for the award, for that period, of $817,390. ESSER III, Year 3 Annual Data Report Key line items "Mandatory Subgrant Funds - Exclusive of Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Salaries" and "Mandatory Subgrant Funds - Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Benefits" were overstated by $46,500 and $3,500, respectively. Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $2,072,695; however, the ledger had total expenses for the award, for that period, of $2,074,793. The lack in internal controls was systemic throughout the audit period. The noncompliance was isolated to fiscal year 2023-2024. 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 federallyfunded 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." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." INDIANA STATE BOARD OF ACCOUNTS 27 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Due to staffing changes, the documentation for an oversight and review process was not identified and presented for audit. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, errors on reports remained undetected and uncorrected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective 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 2024-006 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): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder and excel files. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted one ESSER I Annual Data Report, two ESSER II Annual Data Reports, and two ESSER III Annual Data Reports, for a total of five reports. There was no documented evidence provided for audit that supported an oversight or review process was in place to prevent, and detect and correct, errors on the five reports. Of the five reports tested, two contained the following errors: ESSER II, Year 3 Annual Data Report Key line items "Addressing Physical Health and Safety Uses: Personnel Services - Benefits" and "Addressing Physical Health and Safety Uses: Supplies" were understated by $19,243 and $664,540, respectively. INDIANA STATE BOARD OF ACCOUNTS 26 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $1,002,932; however, the ledger had total expenses for the award, for that period, of $817,390. ESSER III, Year 3 Annual Data Report Key line items "Mandatory Subgrant Funds - Exclusive of Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Salaries" and "Mandatory Subgrant Funds - Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Benefits" were overstated by $46,500 and $3,500, respectively. Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $2,072,695; however, the ledger had total expenses for the award, for that period, of $2,074,793. The lack in internal controls was systemic throughout the audit period. The noncompliance was isolated to fiscal year 2023-2024. 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 federallyfunded 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." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." INDIANA STATE BOARD OF ACCOUNTS 27 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Due to staffing changes, the documentation for an oversight and review process was not identified and presented for audit. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, errors on reports remained undetected and uncorrected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective 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 2024-006 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): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit annual data reports to the Indiana Department of Education (IDOE) via JotForm, a form/report builder and excel files. Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted one ESSER I Annual Data Report, two ESSER II Annual Data Reports, and two ESSER III Annual Data Reports, for a total of five reports. There was no documented evidence provided for audit that supported an oversight or review process was in place to prevent, and detect and correct, errors on the five reports. Of the five reports tested, two contained the following errors: ESSER II, Year 3 Annual Data Report Key line items "Addressing Physical Health and Safety Uses: Personnel Services - Benefits" and "Addressing Physical Health and Safety Uses: Supplies" were understated by $19,243 and $664,540, respectively. INDIANA STATE BOARD OF ACCOUNTS 26 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $1,002,932; however, the ledger had total expenses for the award, for that period, of $817,390. ESSER III, Year 3 Annual Data Report Key line items "Mandatory Subgrant Funds - Exclusive of Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Salaries" and "Mandatory Subgrant Funds - Learning Loss Set-Aside - Mental Health Supports for Students and Staff Uses: Personnel Services - Benefits" were overstated by $46,500 and $3,500, respectively. Expenses for the report, which covered the period of July 1, 2022 to June 30, 2023, totaled $2,072,695; however, the ledger had total expenses for the award, for that period, of $2,074,793. The lack in internal controls was systemic throughout the audit period. The noncompliance was isolated to fiscal year 2023-2024. 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 federallyfunded 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." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." INDIANA STATE BOARD OF ACCOUNTS 27 WEST NOBLE SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Due to staffing changes, the documentation for an oversight and review process was not identified and presented for audit. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, errors on reports remained undetected and uncorrected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish effective 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 2024-005 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 Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Internal controls were in place over reporting where two individuals were involved in submitting and reviewing the reports prior to submission. However, the internal controls were not effective in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Reporting. INDIANA STATE BOARD OF ACCOUNTS 24 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education. Data to be submitted includes, but is not limited to, current period expenditure, prior period expenditure, and expenditures per activity. During the audit period, the School Corporation submitted 2021-2022 expenditures for ESSER II - Year 3 and ESSER III - Year 3 instead of reporting 2022-2023 expenditures for ESSER II - Year 3 and ESSER III - Year 3. The lack of effective internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II - Year 3 and ESSER III - Year 3 reporting. 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 200.334 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 the Federal awards that are renewed quarterly or annual, from the date of 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) 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 The School Corporation had policies and procedures in place over proper reporting on its annual data report; however, officials indicated their understanding of the guidance provided as to which year's expenditures were to be reported was different than what was required. INDIANA STATE BOARD OF ACCOUNTS 25 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Expenditures reported on the annual data report for ESSER II and ESSER III year 3 were not accurate. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure expenditures on the annual data reporting for ESSER II and ESSER III are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 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 Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Internal controls were in place over reporting where two individuals were involved in submitting and reviewing the reports prior to submission. However, the internal controls were not effective in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Reporting. INDIANA STATE BOARD OF ACCOUNTS 24 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education. Data to be submitted includes, but is not limited to, current period expenditure, prior period expenditure, and expenditures per activity. During the audit period, the School Corporation submitted 2021-2022 expenditures for ESSER II - Year 3 and ESSER III - Year 3 instead of reporting 2022-2023 expenditures for ESSER II - Year 3 and ESSER III - Year 3. The lack of effective internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II - Year 3 and ESSER III - Year 3 reporting. 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 200.334 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 the Federal awards that are renewed quarterly or annual, from the date of 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) 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 The School Corporation had policies and procedures in place over proper reporting on its annual data report; however, officials indicated their understanding of the guidance provided as to which year's expenditures were to be reported was different than what was required. INDIANA STATE BOARD OF ACCOUNTS 25 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Expenditures reported on the annual data report for ESSER II and ESSER III year 3 were not accurate. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure expenditures on the annual data reporting for ESSER II and ESSER III are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 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 Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Internal controls were in place over reporting where two individuals were involved in submitting and reviewing the reports prior to submission. However, the internal controls were not effective in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Reporting. INDIANA STATE BOARD OF ACCOUNTS 24 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education. Data to be submitted includes, but is not limited to, current period expenditure, prior period expenditure, and expenditures per activity. During the audit period, the School Corporation submitted 2021-2022 expenditures for ESSER II - Year 3 and ESSER III - Year 3 instead of reporting 2022-2023 expenditures for ESSER II - Year 3 and ESSER III - Year 3. The lack of effective internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II - Year 3 and ESSER III - Year 3 reporting. 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 200.334 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 the Federal awards that are renewed quarterly or annual, from the date of 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) 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 The School Corporation had policies and procedures in place over proper reporting on its annual data report; however, officials indicated their understanding of the guidance provided as to which year's expenditures were to be reported was different than what was required. INDIANA STATE BOARD OF ACCOUNTS 25 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Expenditures reported on the annual data report for ESSER II and ESSER III year 3 were not accurate. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure expenditures on the annual data reporting for ESSER II and ESSER III are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 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 Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Internal controls were in place over reporting where two individuals were involved in submitting and reviewing the reports prior to submission. However, the internal controls were not effective in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Reporting. INDIANA STATE BOARD OF ACCOUNTS 24 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education. Data to be submitted includes, but is not limited to, current period expenditure, prior period expenditure, and expenditures per activity. During the audit period, the School Corporation submitted 2021-2022 expenditures for ESSER II - Year 3 and ESSER III - Year 3 instead of reporting 2022-2023 expenditures for ESSER II - Year 3 and ESSER III - Year 3. The lack of effective internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II - Year 3 and ESSER III - Year 3 reporting. 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 200.334 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 the Federal awards that are renewed quarterly or annual, from the date of 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) 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 The School Corporation had policies and procedures in place over proper reporting on its annual data report; however, officials indicated their understanding of the guidance provided as to which year's expenditures were to be reported was different than what was required. INDIANA STATE BOARD OF ACCOUNTS 25 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Expenditures reported on the annual data report for ESSER II and ESSER III year 3 were not accurate. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure expenditures on the annual data reporting for ESSER II and ESSER III are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 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 Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context Internal controls were in place over reporting where two individuals were involved in submitting and reviewing the reports prior to submission. However, the internal controls were not effective in order to ensure compliance with requirements related to the grant agreement and the following compliance requirement: Reporting. INDIANA STATE BOARD OF ACCOUNTS 24 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation was required to submit an annual data report to the Indiana Department of Education. Data to be submitted includes, but is not limited to, current period expenditure, prior period expenditure, and expenditures per activity. During the audit period, the School Corporation submitted 2021-2022 expenditures for ESSER II - Year 3 and ESSER III - Year 3 instead of reporting 2022-2023 expenditures for ESSER II - Year 3 and ESSER III - Year 3. The lack of effective internal controls was systemic throughout the audit period. The noncompliance was isolated to the ESSER II - Year 3 and ESSER III - Year 3 reporting. 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 200.334 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 the Federal awards that are renewed quarterly or annual, from the date of 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) 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 The School Corporation had policies and procedures in place over proper reporting on its annual data report; however, officials indicated their understanding of the guidance provided as to which year's expenditures were to be reported was different than what was required. INDIANA STATE BOARD OF ACCOUNTS 25 MT. VERNON COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Expenditures reported on the annual data report for ESSER II and ESSER III year 3 were not accurate. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure expenditures on the annual data reporting for ESSER II and ESSER III are accurate. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 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): 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 or 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 controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Due to the lack of effective internal controls, one of the four reports submitted during the audit period was not supported by the School Corporation's records. The following error was noted: For the ESSER III, Year 3 Report, which covered the period July 1, 2022 to June 30, 2023, total expenses reported for Property: Addressing Physical Health and Safety - Mandatory Subgrant funds was $236,023. Total expenses reported for Personnel Services: Meeting Student's Academic, Social, Emotional, and Other Needs was $66,387, for a total of $302,410. This was an overstatement of $271,004. The lack of internal controls was a systemic issue throughout the audit period. Noncompliance was isolated to the ESSER III, Year 3 Report. 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 200.334 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 the Federal awards that are renewed quarterly or annual, from the date of 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) 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 A proper system of internal controls was not designed by management of the School Corporation. Two employees collaborated on the preparation of the reports, but there was no documented review of the completed reports by someone other than the preparers to detect errors prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the ESSER III, Year 3 Report was not supported by the School Corporation's records. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that all reports are supported by the School Corporation's records. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 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): 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 or 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 controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Due to the lack of effective internal controls, one of the four reports submitted during the audit period was not supported by the School Corporation's records. The following error was noted: For the ESSER III, Year 3 Report, which covered the period July 1, 2022 to June 30, 2023, total expenses reported for Property: Addressing Physical Health and Safety - Mandatory Subgrant funds was $236,023. Total expenses reported for Personnel Services: Meeting Student's Academic, Social, Emotional, and Other Needs was $66,387, for a total of $302,410. This was an overstatement of $271,004. The lack of internal controls was a systemic issue throughout the audit period. Noncompliance was isolated to the ESSER III, Year 3 Report. 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 200.334 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 the Federal awards that are renewed quarterly or annual, from the date of 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) 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 A proper system of internal controls was not designed by management of the School Corporation. Two employees collaborated on the preparation of the reports, but there was no documented review of the completed reports by someone other than the preparers to detect errors prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the ESSER III, Year 3 Report was not supported by the School Corporation's records. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that all reports are supported by the School Corporation's records. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 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): 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 or 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 controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Due to the lack of effective internal controls, one of the four reports submitted during the audit period was not supported by the School Corporation's records. The following error was noted: For the ESSER III, Year 3 Report, which covered the period July 1, 2022 to June 30, 2023, total expenses reported for Property: Addressing Physical Health and Safety - Mandatory Subgrant funds was $236,023. Total expenses reported for Personnel Services: Meeting Student's Academic, Social, Emotional, and Other Needs was $66,387, for a total of $302,410. This was an overstatement of $271,004. The lack of internal controls was a systemic issue throughout the audit period. Noncompliance was isolated to the ESSER III, Year 3 Report. 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 200.334 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 the Federal awards that are renewed quarterly or annual, from the date of 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) 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 A proper system of internal controls was not designed by management of the School Corporation. Two employees collaborated on the preparation of the reports, but there was no documented review of the completed reports by someone other than the preparers to detect errors prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the ESSER III, Year 3 Report was not supported by the School Corporation's records. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that all reports are supported by the School Corporation's records. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 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): 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 or 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 controls to ensure that the annual Elementary and Secondary School Emergency Relief (ESSER) Data Collection reports (Reports) were complete and accurately submitted. The Reports were prepared and submitted by one employee without a documented oversight, review, or approval process in place to prevent, or detect and correct, errors. Due to the lack of effective internal controls, one of the four reports submitted during the audit period was not supported by the School Corporation's records. The following error was noted: For the ESSER III, Year 3 Report, which covered the period July 1, 2022 to June 30, 2023, total expenses reported for Property: Addressing Physical Health and Safety - Mandatory Subgrant funds was $236,023. Total expenses reported for Personnel Services: Meeting Student's Academic, Social, Emotional, and Other Needs was $66,387, for a total of $302,410. This was an overstatement of $271,004. The lack of internal controls was a systemic issue throughout the audit period. Noncompliance was isolated to the ESSER III, Year 3 Report. 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 200.334 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 the Federal awards that are renewed quarterly or annual, from the date of 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) 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 A proper system of internal controls was not designed by management of the School Corporation. Two employees collaborated on the preparation of the reports, but there was no documented review of the completed reports by someone other than the preparers to detect errors prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, the ESSER III, Year 3 Report was not supported by the School Corporation's records. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure that all reports are supported by the School Corporation's records. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(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. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(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. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(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. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(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. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(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. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
Finding 2024-003 – Fiscal Management (Material Weakness) CFDA Title and Number: 20.513 (5310) Enhanced Mobility of Seniors and Individuals with Disabilities. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management CFDA Title and Number: 20.509 (5311) Operating Assistance. Formula Grants for Rural. Name of Federal Agency: Department of Transportation Internal Control over Compliance: Cash Management Criteria: 2 CFR Part 200.302(b)(1) The financial management system of each non-federal entity must provide for the following: Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. 200.302(b)(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. Condition: During portions of the fiscal year, the District prepared reimbursement calculations relying on an internally developed spreadsheet tool, rather than using amounts solely obtained from the general ledger and supporting documentation. The reimbursement reports were prepared by management with limited review. Conflicts over review and other monitoring procedures occurred, and were not always resolved. Complete supporting documentation for the claimed costs were not always available. Claims and other financial reports due to ODOT were regularly submitted after the due dates. The late and/or unsubstantiated filings have resulted in lost claims for the District, and potential refunding of reimbursements received. Cause: Internal control procedures assuring timely and accurate preparation of reports and filing of the reimbursement requests were not designed or implemented adequately. Maintaining sufficient and accurate supporting documentation for each report was not possible because original data was not relied upon by management, to complete the reports and reimbursement requests. Effect or Potential Effect: The lack of effective internal control activities over cash management, including financial reporting, allowed for reporting and claims errors, from simple calculation errors to requests for reimbursements of unauthorized purposes. Improper financial reporting to the ODOT occurred regularly. Lack of timely filing of reimbursement requests for amounts claimed, resulted in lost revenues and claims that may be required to be returned. Questioned Cost: No Context: Delays in filing reimbursement claims, delays in filing financial reports to ODOT, and internal disputes regarding completion of grant reimbursement request procedures were evident. Weak or nonexistent controls over cash management, including fiscal management, may result in lost revenues and risks of creating unnecessary liabilities in the form of refunds due to ODOT. Repeat of a Prior-Year Finding: Yes Recommendation: The District should design and implement internal control policies and procedures for cash management, including fiscal management and financial reporting. Monitoring, information and communication control activities should also be designed and implemented as part of the effort the reduce the risk of continued matters of noncompliance related to cash management. District's Response: The District acknowledges the weaknesses and its intention of correcting weaknesses. Corrective Action Plan: The District’s General Manager resigned effective September 13, 2024. The Board has adopted a plan to procure qualified professional assistance to evaluate and restructure the organization and assist in daily management activities until a new General Manager can be hired and trained. Additional assistance for resolving these deficiencies has been offered by ODOT and accepted by the Board. Planned Implementation Date: September 30, 2024 Responsible Persons: District Board, Umpqua Public Transit District
Finding 2024-001 Reporting – Internal Control and Compliance over Reporting (Significant Deficiency) Information on the Federal Program: Assistance Listing Number: 14.218 Federal Program Name: CDBG‐Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number and Award Year: B-20-MW-06-0053 – FY20-21 B-21-MC-06-0053 – FY21-22 B-22-MC-06-0053 – FY22-23 B-23-MC-06-0053 – FY23-24 Criteria: Code of Federal Regulations, Title 2 – Federal Financial Assistance, Subtitle A – Office of Management and Budget Guidance for Federal Financial Assistance, Chapter II – Office of Management and Budget Guidance, Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements: Performance and Financial Monitoring and Reporting Section § 200.328 Financial reporting. (a) The Federal agency must require only OMB-approved government-wide data elements on recipient financial reports. At the time of publication, this consists of the Federal Financial Report (SF-425); however, this also applies to any future OMB-approved government-wide data elements available from the OMB-designated standards lead. (b) The Federal agency or pass-through entity must collect financial reports no less than annually. The Federal agency or pass-through entity may not collect financial reports more frequently than quarterly unless a specific condition has been implemented in accordance with § 200.208. To the extent practicable, the Federal agency or pass-through entity should collect financial reports in coordination with performance reports. (c) The recipient or subrecipient must submit financial reports as required by the Federal award. Reports submitted annually by the recipient or subrecipient must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. (d) The final financial report submitted by the recipient must be due no later than 120 calendar days after the conclusion of the period of performance. A subrecipient must submit a final financial report to a pass-through entity no later than 90 calendar days after the conclusion of the period of performance. See also § 200.344. The Federal agency or pass-through entity may extend the due date for any financial report with justification from the recipient or subrecipient. Section § 200.303 Internal Controls The recipient and subrecipient must: (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: For the Community Development Block Grants/Entitlement Grants Cluster, the City did not submit the reports within the required deadline: Report Type Award Number Period Date Due Date Submitted SF-425 Financial Program-wide reporting 7/1/2023 - 9/30/2023 10/30/2023 1/16/2024 SF-425 Financial Program-wide reporting 1/1/2024 - 3/31/2024 3/30/2024 7/24/2024 Four (4) quarterly financial reports were tested, and two (2) reports were not submitted by the required deadline. Cause: During the audit period, the City did not possess the operational processes/procedures necessary to guarantee timely submission of the SF-425 report. Effect: Failure to submit the SF-425 reports timely results in noncompliance with the reporting requirements in the grant agreement. Questioned Costs: None noted. Identification as a Repeat Finding, If Applicable: No. Recommendation: We recommend that the City strengthen their report submission process and procedures to ensure all required reports are properly reviewed and approved and submitted timely. When a report cannot be submitted by the due date, the City should request an extension from the funding agency and maintain a record of the approval. Management’s View and Corrective Action Plan: The City agrees with this finding. The City has already taken steps to improve its processes/procedures to insure timely submission of all required SF-425 reports.
Finding 2024-001 Reporting – Internal Control and Compliance over Reporting (Significant Deficiency) Information on the Federal Program: Assistance Listing Number: 14.218 Federal Program Name: CDBG‐Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number and Award Year: B-20-MW-06-0053 – FY20-21 B-21-MC-06-0053 – FY21-22 B-22-MC-06-0053 – FY22-23 B-23-MC-06-0053 – FY23-24 Criteria: Code of Federal Regulations, Title 2 – Federal Financial Assistance, Subtitle A – Office of Management and Budget Guidance for Federal Financial Assistance, Chapter II – Office of Management and Budget Guidance, Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements: Performance and Financial Monitoring and Reporting Section § 200.328 Financial reporting. (a) The Federal agency must require only OMB-approved government-wide data elements on recipient financial reports. At the time of publication, this consists of the Federal Financial Report (SF-425); however, this also applies to any future OMB-approved government-wide data elements available from the OMB-designated standards lead. (b) The Federal agency or pass-through entity must collect financial reports no less than annually. The Federal agency or pass-through entity may not collect financial reports more frequently than quarterly unless a specific condition has been implemented in accordance with § 200.208. To the extent practicable, the Federal agency or pass-through entity should collect financial reports in coordination with performance reports. (c) The recipient or subrecipient must submit financial reports as required by the Federal award. Reports submitted annually by the recipient or subrecipient must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. (d) The final financial report submitted by the recipient must be due no later than 120 calendar days after the conclusion of the period of performance. A subrecipient must submit a final financial report to a pass-through entity no later than 90 calendar days after the conclusion of the period of performance. See also § 200.344. The Federal agency or pass-through entity may extend the due date for any financial report with justification from the recipient or subrecipient. Section § 200.303 Internal Controls The recipient and subrecipient must: (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: For the Community Development Block Grants/Entitlement Grants Cluster, the City did not submit the reports within the required deadline: Report Type Award Number Period Date Due Date Submitted SF-425 Financial Program-wide reporting 7/1/2023 - 9/30/2023 10/30/2023 1/16/2024 SF-425 Financial Program-wide reporting 1/1/2024 - 3/31/2024 3/30/2024 7/24/2024 Four (4) quarterly financial reports were tested, and two (2) reports were not submitted by the required deadline. Cause: During the audit period, the City did not possess the operational processes/procedures necessary to guarantee timely submission of the SF-425 report. Effect: Failure to submit the SF-425 reports timely results in noncompliance with the reporting requirements in the grant agreement. Questioned Costs: None noted. Identification as a Repeat Finding, If Applicable: No. Recommendation: We recommend that the City strengthen their report submission process and procedures to ensure all required reports are properly reviewed and approved and submitted timely. When a report cannot be submitted by the due date, the City should request an extension from the funding agency and maintain a record of the approval. Management’s View and Corrective Action Plan: The City agrees with this finding. The City has already taken steps to improve its processes/procedures to insure timely submission of all required SF-425 reports.
Finding 2024-001 Reporting – Internal Control and Compliance over Reporting (Significant Deficiency) Information on the Federal Program: Assistance Listing Number: 14.218 Federal Program Name: CDBG‐Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number and Award Year: B-20-MW-06-0053 – FY20-21 B-21-MC-06-0053 – FY21-22 B-22-MC-06-0053 – FY22-23 B-23-MC-06-0053 – FY23-24 Criteria: Code of Federal Regulations, Title 2 – Federal Financial Assistance, Subtitle A – Office of Management and Budget Guidance for Federal Financial Assistance, Chapter II – Office of Management and Budget Guidance, Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements: Performance and Financial Monitoring and Reporting Section § 200.328 Financial reporting. (a) The Federal agency must require only OMB-approved government-wide data elements on recipient financial reports. At the time of publication, this consists of the Federal Financial Report (SF-425); however, this also applies to any future OMB-approved government-wide data elements available from the OMB-designated standards lead. (b) The Federal agency or pass-through entity must collect financial reports no less than annually. The Federal agency or pass-through entity may not collect financial reports more frequently than quarterly unless a specific condition has been implemented in accordance with § 200.208. To the extent practicable, the Federal agency or pass-through entity should collect financial reports in coordination with performance reports. (c) The recipient or subrecipient must submit financial reports as required by the Federal award. Reports submitted annually by the recipient or subrecipient must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. (d) The final financial report submitted by the recipient must be due no later than 120 calendar days after the conclusion of the period of performance. A subrecipient must submit a final financial report to a pass-through entity no later than 90 calendar days after the conclusion of the period of performance. See also § 200.344. The Federal agency or pass-through entity may extend the due date for any financial report with justification from the recipient or subrecipient. Section § 200.303 Internal Controls The recipient and subrecipient must: (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: For the Community Development Block Grants/Entitlement Grants Cluster, the City did not submit the reports within the required deadline: Report Type Award Number Period Date Due Date Submitted SF-425 Financial Program-wide reporting 7/1/2023 - 9/30/2023 10/30/2023 1/16/2024 SF-425 Financial Program-wide reporting 1/1/2024 - 3/31/2024 3/30/2024 7/24/2024 Four (4) quarterly financial reports were tested, and two (2) reports were not submitted by the required deadline. Cause: During the audit period, the City did not possess the operational processes/procedures necessary to guarantee timely submission of the SF-425 report. Effect: Failure to submit the SF-425 reports timely results in noncompliance with the reporting requirements in the grant agreement. Questioned Costs: None noted. Identification as a Repeat Finding, If Applicable: No. Recommendation: We recommend that the City strengthen their report submission process and procedures to ensure all required reports are properly reviewed and approved and submitted timely. When a report cannot be submitted by the due date, the City should request an extension from the funding agency and maintain a record of the approval. Management’s View and Corrective Action Plan: The City agrees with this finding. The City has already taken steps to improve its processes/procedures to insure timely submission of all required SF-425 reports.
Finding 2024-001 Reporting – Internal Control and Compliance over Reporting (Significant Deficiency) Information on the Federal Program: Assistance Listing Number: 14.218 Federal Program Name: CDBG‐Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number and Award Year: B-20-MW-06-0053 – FY20-21 B-21-MC-06-0053 – FY21-22 B-22-MC-06-0053 – FY22-23 B-23-MC-06-0053 – FY23-24 Criteria: Code of Federal Regulations, Title 2 – Federal Financial Assistance, Subtitle A – Office of Management and Budget Guidance for Federal Financial Assistance, Chapter II – Office of Management and Budget Guidance, Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements: Performance and Financial Monitoring and Reporting Section § 200.328 Financial reporting. (a) The Federal agency must require only OMB-approved government-wide data elements on recipient financial reports. At the time of publication, this consists of the Federal Financial Report (SF-425); however, this also applies to any future OMB-approved government-wide data elements available from the OMB-designated standards lead. (b) The Federal agency or pass-through entity must collect financial reports no less than annually. The Federal agency or pass-through entity may not collect financial reports more frequently than quarterly unless a specific condition has been implemented in accordance with § 200.208. To the extent practicable, the Federal agency or pass-through entity should collect financial reports in coordination with performance reports. (c) The recipient or subrecipient must submit financial reports as required by the Federal award. Reports submitted annually by the recipient or subrecipient must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. (d) The final financial report submitted by the recipient must be due no later than 120 calendar days after the conclusion of the period of performance. A subrecipient must submit a final financial report to a pass-through entity no later than 90 calendar days after the conclusion of the period of performance. See also § 200.344. The Federal agency or pass-through entity may extend the due date for any financial report with justification from the recipient or subrecipient. Section § 200.303 Internal Controls The recipient and subrecipient must: (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: For the Community Development Block Grants/Entitlement Grants Cluster, the City did not submit the reports within the required deadline: Report Type Award Number Period Date Due Date Submitted SF-425 Financial Program-wide reporting 7/1/2023 - 9/30/2023 10/30/2023 1/16/2024 SF-425 Financial Program-wide reporting 1/1/2024 - 3/31/2024 3/30/2024 7/24/2024 Four (4) quarterly financial reports were tested, and two (2) reports were not submitted by the required deadline. Cause: During the audit period, the City did not possess the operational processes/procedures necessary to guarantee timely submission of the SF-425 report. Effect: Failure to submit the SF-425 reports timely results in noncompliance with the reporting requirements in the grant agreement. Questioned Costs: None noted. Identification as a Repeat Finding, If Applicable: No. Recommendation: We recommend that the City strengthen their report submission process and procedures to ensure all required reports are properly reviewed and approved and submitted timely. When a report cannot be submitted by the due date, the City should request an extension from the funding agency and maintain a record of the approval. Management’s View and Corrective Action Plan: The City agrees with this finding. The City has already taken steps to improve its processes/procedures to insure timely submission of all required SF-425 reports.