FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund Federal Award Number: S425D200012 (Year: 2020) Questioned Costs: $129,375 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it relates to the Elementary and Secondary School Emergency Relief Fund program. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $16,263,786.14 were expended and reported on the Whitfield County Board of Education?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant 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 200.303 ? Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 ? Factors Affecting Allowability of Costs state that ?costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity? (g) Be adequately documented?? In addition, provisions included in the Uniform Guidance, Section 200.404 ? Reasonable Costs state that ?a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm?s-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award? (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award?s cost.? Furthermore, provisions included in the Uniform Guidance, Section 200.318 ? General Procurement Standards state that ?the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations? for the acquisition of property or services required under a Federal award or subaward?? Condition: Auditors performed a review of expenditure activity associated with the ESSER program to determine if appropriate internal controls were implemented and applicable compliance requirements were met. This testing revealed that a payment was made to the staffing company utilized by the School District to provide ?retention? bonuses to both transportation and school nutrition contractors who were not employees of the School District. These individuals were assigned to work within the School District by the private staffing company. Per review of the contract in place during the fiscal year under review, it was noted that these bonuses represented amounts in excess of the agreed upon price. Furthermore, the School District does not have the authority or ability to retain these individuals as they were not employees of the School District and contract provisions requiring the individuals to remain employed by the private staffing company and in the service of the School District for a stated period of time was not reflected within the associated contract. Therefore, expenditures totaling $129,375 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $129,375 were identified for expenditures that were not incurred for a necessary and reasonable purpose and did not follow the School District?s policies and procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: Per discussion with management, the School District believed that the expenditures were allowable as the expenditures were approved by GaDOE through the Consolidated Application process; however, they were not aware that contract amendments should be initiated prior to the expenditure of funds in this manner. Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are in line with provisions reflected within the associated contract and/or contract amendments. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District?s purchasing policies and procedures. Views of Responsible Officials: We do not concur with this finding. The Whitfield County School District followed standard operating procedures for all federal programs? budget approval and disbursement requests with the Georgia Department of Education (GaDOE). The finding was issued after GaDOE approved and paid our requested expenses. Auditor?s Concluding Remarks: School District personnel state that the School District ?followed standard operating procedures for all federal programs? budget approval and disbursement requests with the Georgia Department of Education (GaDOE).? Though GaDOE approved a budget that included the bonuses, the School District was still expected and required to comply with federal regulations associated with the federal program. When each federal program budget is submitted to GaDOE, School District management signs assurances certifying that ?each program will be administered in accordance with all applicable statutes, regulations, program plans, and applications? and that the School District will ?maintain adequate internal controls in the procurement process for goods and services in accordance with Georgia?s Financial Management for Georgia LUAS Manual.? As noted previously, the School District did not follow appropriate procurement policies and procedures and paid amounts beyond those allowed per the contract in place during the fiscal year under review. Additionally, auditors contacted ED?s ESSER program management to discuss the allowability of these bonus payments as ED is the grantor of the funds and the cognizant agency charged with administering the ESSER program. Officials at ED advised auditors that bonuses may be allowable if such bonuses are reflected within the contract; however, as noted previously, no such contract provisions were present. Moreover, ED emphasized that published guidance associated with the issuance of bonuses or premium pay from ESSER funds pertained to school personnel, not contractors. We reaffirm our finding and will review the status of the finding during our next audit.
FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund Federal Award Number: S425D200012 (Year: 2020) Questioned Costs: $129,375 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it relates to the Elementary and Secondary School Emergency Relief Fund program. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $16,263,786.14 were expended and reported on the Whitfield County Board of Education?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant 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 200.303 ? Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 ? Factors Affecting Allowability of Costs state that ?costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity? (g) Be adequately documented?? In addition, provisions included in the Uniform Guidance, Section 200.404 ? Reasonable Costs state that ?a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm?s-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award? (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award?s cost.? Furthermore, provisions included in the Uniform Guidance, Section 200.318 ? General Procurement Standards state that ?the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations? for the acquisition of property or services required under a Federal award or subaward?? Condition: Auditors performed a review of expenditure activity associated with the ESSER program to determine if appropriate internal controls were implemented and applicable compliance requirements were met. This testing revealed that a payment was made to the staffing company utilized by the School District to provide ?retention? bonuses to both transportation and school nutrition contractors who were not employees of the School District. These individuals were assigned to work within the School District by the private staffing company. Per review of the contract in place during the fiscal year under review, it was noted that these bonuses represented amounts in excess of the agreed upon price. Furthermore, the School District does not have the authority or ability to retain these individuals as they were not employees of the School District and contract provisions requiring the individuals to remain employed by the private staffing company and in the service of the School District for a stated period of time was not reflected within the associated contract. Therefore, expenditures totaling $129,375 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $129,375 were identified for expenditures that were not incurred for a necessary and reasonable purpose and did not follow the School District?s policies and procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: Per discussion with management, the School District believed that the expenditures were allowable as the expenditures were approved by GaDOE through the Consolidated Application process; however, they were not aware that contract amendments should be initiated prior to the expenditure of funds in this manner. Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are in line with provisions reflected within the associated contract and/or contract amendments. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District?s purchasing policies and procedures. Views of Responsible Officials: We do not concur with this finding. The Whitfield County School District followed standard operating procedures for all federal programs? budget approval and disbursement requests with the Georgia Department of Education (GaDOE). The finding was issued after GaDOE approved and paid our requested expenses. Auditor?s Concluding Remarks: School District personnel state that the School District ?followed standard operating procedures for all federal programs? budget approval and disbursement requests with the Georgia Department of Education (GaDOE).? Though GaDOE approved a budget that included the bonuses, the School District was still expected and required to comply with federal regulations associated with the federal program. When each federal program budget is submitted to GaDOE, School District management signs assurances certifying that ?each program will be administered in accordance with all applicable statutes, regulations, program plans, and applications? and that the School District will ?maintain adequate internal controls in the procurement process for goods and services in accordance with Georgia?s Financial Management for Georgia LUAS Manual.? As noted previously, the School District did not follow appropriate procurement policies and procedures and paid amounts beyond those allowed per the contract in place during the fiscal year under review. Additionally, auditors contacted ED?s ESSER program management to discuss the allowability of these bonus payments as ED is the grantor of the funds and the cognizant agency charged with administering the ESSER program. Officials at ED advised auditors that bonuses may be allowable if such bonuses are reflected within the contract; however, as noted previously, no such contract provisions were present. Moreover, ED emphasized that published guidance associated with the issuance of bonuses or premium pay from ESSER funds pertained to school personnel, not contractors. We reaffirm our finding and will review the status of the finding during our next audit.
FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund Federal Award Number: S425D200012 (Year: 2020) Questioned Costs: $129,375 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it relates to the Elementary and Secondary School Emergency Relief Fund program. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $16,263,786.14 were expended and reported on the Whitfield County Board of Education?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant 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 200.303 ? Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 ? Factors Affecting Allowability of Costs state that ?costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity? (g) Be adequately documented?? In addition, provisions included in the Uniform Guidance, Section 200.404 ? Reasonable Costs state that ?a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm?s-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award? (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award?s cost.? Furthermore, provisions included in the Uniform Guidance, Section 200.318 ? General Procurement Standards state that ?the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations? for the acquisition of property or services required under a Federal award or subaward?? Condition: Auditors performed a review of expenditure activity associated with the ESSER program to determine if appropriate internal controls were implemented and applicable compliance requirements were met. This testing revealed that a payment was made to the staffing company utilized by the School District to provide ?retention? bonuses to both transportation and school nutrition contractors who were not employees of the School District. These individuals were assigned to work within the School District by the private staffing company. Per review of the contract in place during the fiscal year under review, it was noted that these bonuses represented amounts in excess of the agreed upon price. Furthermore, the School District does not have the authority or ability to retain these individuals as they were not employees of the School District and contract provisions requiring the individuals to remain employed by the private staffing company and in the service of the School District for a stated period of time was not reflected within the associated contract. Therefore, expenditures totaling $129,375 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $129,375 were identified for expenditures that were not incurred for a necessary and reasonable purpose and did not follow the School District?s policies and procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: Per discussion with management, the School District believed that the expenditures were allowable as the expenditures were approved by GaDOE through the Consolidated Application process; however, they were not aware that contract amendments should be initiated prior to the expenditure of funds in this manner. Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are in line with provisions reflected within the associated contract and/or contract amendments. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District?s purchasing policies and procedures. Views of Responsible Officials: We do not concur with this finding. The Whitfield County School District followed standard operating procedures for all federal programs? budget approval and disbursement requests with the Georgia Department of Education (GaDOE). The finding was issued after GaDOE approved and paid our requested expenses. Auditor?s Concluding Remarks: School District personnel state that the School District ?followed standard operating procedures for all federal programs? budget approval and disbursement requests with the Georgia Department of Education (GaDOE).? Though GaDOE approved a budget that included the bonuses, the School District was still expected and required to comply with federal regulations associated with the federal program. When each federal program budget is submitted to GaDOE, School District management signs assurances certifying that ?each program will be administered in accordance with all applicable statutes, regulations, program plans, and applications? and that the School District will ?maintain adequate internal controls in the procurement process for goods and services in accordance with Georgia?s Financial Management for Georgia LUAS Manual.? As noted previously, the School District did not follow appropriate procurement policies and procedures and paid amounts beyond those allowed per the contract in place during the fiscal year under review. Additionally, auditors contacted ED?s ESSER program management to discuss the allowability of these bonus payments as ED is the grantor of the funds and the cognizant agency charged with administering the ESSER program. Officials at ED advised auditors that bonuses may be allowable if such bonuses are reflected within the contract; however, as noted previously, no such contract provisions were present. Moreover, ED emphasized that published guidance associated with the issuance of bonuses or premium pay from ESSER funds pertained to school personnel, not contractors. We reaffirm our finding and will review the status of the finding during our next audit.
Criteria: In accordance with 2 CFR 200 Subpart E 200.403(b), costs allowed under Federal awards must conform to any limitation or exclusions set forth in the Federal award as to types or amount of cost items. The grant application from KDHE specifically states that all transportation equipment must be leased or rented and no capital purchases are allowed. Condition: Included on the District's expense reports submitted to the Kansas Department of Health and Environment for grant reimbursement was a yearly lease payment for two vehicles to be used for grant purposes. However, the District actually purchased both of these vehicles in full prior to reimbursement from the State of Kansas. A portion of the vehicle purchase was charged to the grant and reimbursed for the 2021-2022 year, with the remaining cost to be submitted and reimbursed in future years, and represented as annual lease payments. Cause: The Superintendent was solely responsible for purchasing these vehicles and instructed the Business Manager to report them as leases on the expense reports submitted to KDHE. The Board did not approve the purchase of these vehicles. Effect: Grant reimbursements were received by the District for unallowable costs. Known Questioned Cost: $18,409. This was the amount reported to the State as the first year lease payment and for which the District received reimbursement for the June 30, 2022 fiscal year. Future reimbursements planned by the District are $16,649 each for the June 30, 2023 and June 30, 2024 fiscal years. Recommendation: The District should fully follow grant requirements to ensure only allowable costs are charged to the grant.
FINDING 2022-002 Subject: Special Education Cluster - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Number and Year (or Other Identifying Numbers): 19611-042-PN01, 20611-042-PN01, 21611-042-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Earmarking Audit Finding: Significant Deficiency Criteria: 2 CFR 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 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: ? (g) Be adequately documented.... " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." Condition: The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). The School Corporation did not have adequate internal controls in place to ensure that the Cooperative complied with the earmarking requirements. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect: The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its members. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for 19611-042-PN01 and 20611-042-PN01 grant awards could not be verified for the individual schools to verify the minimum amount per the grant awards was expended and properly reported to IDOE as required. The School Corporation?s minimum earmarking requirements for the 19611-042-PN01 and 20611-042-PN01 grant awards were $1,095 and $1,791, respectively. The lack of internal controls and noncompliance were isolated to the 19611-042-PN01 and 20611-042-PN01, grant awards. Identification of repeat finding: No Recommendation: We recommended that the School Corporation's management establish a system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-002 Subject: Special Education Cluster - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Number and Year (or Other Identifying Numbers): 19611-042-PN01, 20611-042-PN01, 21611-042-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Earmarking Audit Finding: Significant Deficiency Criteria: 2 CFR 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 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: ? (g) Be adequately documented.... " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." Condition: The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). The School Corporation did not have adequate internal controls in place to ensure that the Cooperative complied with the earmarking requirements. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect: The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its members. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for 19611-042-PN01 and 20611-042-PN01 grant awards could not be verified for the individual schools to verify the minimum amount per the grant awards was expended and properly reported to IDOE as required. The School Corporation?s minimum earmarking requirements for the 19611-042-PN01 and 20611-042-PN01 grant awards were $1,095 and $1,791, respectively. The lack of internal controls and noncompliance were isolated to the 19611-042-PN01 and 20611-042-PN01, grant awards. Identification of repeat finding: No Recommendation: We recommended that the School Corporation's management establish a system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-002 Subject: Special Education Cluster - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Number and Year (or Other Identifying Numbers): 19611-042-PN01, 20611-042-PN01, 21611-042-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Earmarking Audit Finding: Significant Deficiency Criteria: 2 CFR 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 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: ? (g) Be adequately documented.... " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." Condition: The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). The School Corporation did not have adequate internal controls in place to ensure that the Cooperative complied with the earmarking requirements. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect: The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its members. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for 19611-042-PN01 and 20611-042-PN01 grant awards could not be verified for the individual schools to verify the minimum amount per the grant awards was expended and properly reported to IDOE as required. The School Corporation?s minimum earmarking requirements for the 19611-042-PN01 and 20611-042-PN01 grant awards were $1,095 and $1,791, respectively. The lack of internal controls and noncompliance were isolated to the 19611-042-PN01 and 20611-042-PN01, grant awards. Identification of repeat finding: No Recommendation: We recommended that the School Corporation's management establish a system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-002 Subject: Special Education Cluster - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Number and Year (or Other Identifying Numbers): 19611-042-PN01, 20611-042-PN01, 21611-042-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Earmarking Audit Finding: Significant Deficiency Criteria: 2 CFR 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 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: ? (g) Be adequately documented.... " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." Condition: The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). The School Corporation did not have adequate internal controls in place to ensure that the Cooperative complied with the earmarking requirements. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect: The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its members. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for 19611-042-PN01 and 20611-042-PN01 grant awards could not be verified for the individual schools to verify the minimum amount per the grant awards was expended and properly reported to IDOE as required. The School Corporation?s minimum earmarking requirements for the 19611-042-PN01 and 20611-042-PN01 grant awards were $1,095 and $1,791, respectively. The lack of internal controls and noncompliance were isolated to the 19611-042-PN01 and 20611-042-PN01, grant awards. Identification of repeat finding: No Recommendation: We recommended that the School Corporation's management establish a system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on Federal Program(s) - U.S. Department of Agriculture Passed through Florida Department of Health CFDA Number: 10.558 CFDA Name: Child and Adult Care Food Program Criteria ? The Code of Federal Regulations (CFR) Section 200.403(g) states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. Additionally, CFR Section 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed and are supported by a system of internal control which provides reasonable assurance that the charges are accurate and allowable. Condition ? During our testing of payroll disbursements, we noted that one of the 25 payroll expenditures selected for testing did not have a properly approved personnel action form documenting the employee?s pay rate. Cause - Policies and procedures were not appropriately adhered to in this instance to ensure a properly approved personnel action form was maintained to evidence this cost was allowable and that an appropriate level of review and approval was completed prior to charging this cost to a federal program. Effect or Potential Effect - We were unable to confirm the accuracy or completeness of the expense claimed as a federal expenditure. Questioned Costs - There are no questioned costs as the disbursement amount is under the threshold. Context ? We tested a sample of 25 payroll expense items and found one exception. The expense consisted of $262 in gross employee wages charged to the federal program for which properly approved supporting documentation for the employee?s pay rate was not available. Total expense charged to the federal program for this employee was $5,948. This is a condition identified per review of the Organization?s controls over compliance with specified requirements using a statistically valid sample. Recommendation - We recommend that the Organization review its controls over payroll disbursements to ensure that all employees have a personnel action form to document approved pay rates. Views of Responsible Officials ? Management was aware of the Organization?s manual process to approve and store physical copies of pay rate approval, which placed the Organization at risk of losing proper documentation especially when Management experienced high turnover in Human Resource Department. Beginning in September 2022, the Organization has modified this process to allow managers to virtually approve and store digital copies of pay rate documentation.
Information on Federal Program(s) - U.S. Department of Agriculture Passed through Florida Department of Health CFDA Number: 10.558 CFDA Name: Child and Adult Care Food Program Criteria ? The Code of Federal Regulations (CFR) Section 200.403(g) states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. Additionally, CFR Section 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed and are supported by a system of internal control which provides reasonable assurance that the charges are accurate and allowable. Condition ? During our testing of payroll disbursements, we noted that one of the 25 payroll expenditures selected for testing did not have a properly approved personnel action form documenting the employee?s pay rate. Cause - Policies and procedures were not appropriately adhered to in this instance to ensure a properly approved personnel action form was maintained to evidence this cost was allowable and that an appropriate level of review and approval was completed prior to charging this cost to a federal program. Effect or Potential Effect - We were unable to confirm the accuracy or completeness of the expense claimed as a federal expenditure. Questioned Costs - There are no questioned costs as the disbursement amount is under the threshold. Context ? We tested a sample of 25 payroll expense items and found one exception. The expense consisted of $262 in gross employee wages charged to the federal program for which properly approved supporting documentation for the employee?s pay rate was not available. Total expense charged to the federal program for this employee was $5,948. This is a condition identified per review of the Organization?s controls over compliance with specified requirements using a statistically valid sample. Recommendation - We recommend that the Organization review its controls over payroll disbursements to ensure that all employees have a personnel action form to document approved pay rates. Views of Responsible Officials ? Management was aware of the Organization?s manual process to approve and store physical copies of pay rate approval, which placed the Organization at risk of losing proper documentation especially when Management experienced high turnover in Human Resource Department. Beginning in September 2022, the Organization has modified this process to allow managers to virtually approve and store digital copies of pay rate documentation.
FINDING 2022-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summery Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21/22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. A total of 25 food service program disbursements were selected for testing. Across 6 contracted vendors, 9 disbursements had items purchased that were not charged in accordance with contracted prices. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 18 METROPOLITAN SCHOOL DISTRICT OF WARREN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. . . . (g) Be adequately documented. . . ." Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure compliance and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summery Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21/22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. A total of 25 food service program disbursements were selected for testing. Across 6 contracted vendors, 9 disbursements had items purchased that were not charged in accordance with contracted prices. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 18 METROPOLITAN SCHOOL DISTRICT OF WARREN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. . . . (g) Be adequately documented. . . ." Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure compliance and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summery Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21/22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. A total of 25 food service program disbursements were selected for testing. Across 6 contracted vendors, 9 disbursements had items purchased that were not charged in accordance with contracted prices. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 18 METROPOLITAN SCHOOL DISTRICT OF WARREN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. . . . (g) Be adequately documented. . . ." Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure compliance and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summery Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21/22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. A total of 25 food service program disbursements were selected for testing. Across 6 contracted vendors, 9 disbursements had items purchased that were not charged in accordance with contracted prices. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 18 METROPOLITAN SCHOOL DISTRICT OF WARREN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. . . . (g) Be adequately documented. . . ." Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure compliance and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summery Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21/22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. A total of 25 food service program disbursements were selected for testing. Across 6 contracted vendors, 9 disbursements had items purchased that were not charged in accordance with contracted prices. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 18 METROPOLITAN SCHOOL DISTRICT OF WARREN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. . . . (g) Be adequately documented. . . ." Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure compliance and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summery Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21/22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. A total of 25 food service program disbursements were selected for testing. Across 6 contracted vendors, 9 disbursements had items purchased that were not charged in accordance with contracted prices. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 18 METROPOLITAN SCHOOL DISTRICT OF WARREN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. . . . (g) Be adequately documented. . . ." Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure compliance and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summery Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21/22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. A total of 25 food service program disbursements were selected for testing. Across 6 contracted vendors, 9 disbursements had items purchased that were not charged in accordance with contracted prices. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 18 METROPOLITAN SCHOOL DISTRICT OF WARREN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. . . . (g) Be adequately documented. . . ." Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure compliance and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summery Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21/22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. A total of 25 food service program disbursements were selected for testing. Across 6 contracted vendors, 9 disbursements had items purchased that were not charged in accordance with contracted prices. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 18 METROPOLITAN SCHOOL DISTRICT OF WARREN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. . . . (g) Be adequately documented. . . ." Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure compliance and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-005 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425D Federal Award Number and Year (or Other Identifying Number): S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Internal controls over vendor related disbursements were not effective at ensuring expenditures related to the Nurse's office and Administration building renovation construction projects were adequately documented prior to payment. Forty accounts payable vouchers (APV) were selected for testing. Three APV's for one vendor did not include itemized invoices for payments related to the construction projects. The School Corporation obtained a combined quote for the two construction projects, in the amount of $185,000, which was signed by both parties. The School Corporation did not advertise for bids, obtain sealed bids, or enter into a contract for the construction projects. In addition, while the quote was for a total cost of $185,000, total payments made to the vendor from ESSER II funds were $275,170. Due to the lack of supporting documentation, we were unable to determine if the $275,170 paid to the vendor was for the construction projects, or if other expenses had been paid. The total $275,170 was considered questioned costs. The lack of internal controls and noncompliance were isolated to the vendor and the renovation projects noted above. INDIANA STATE BOARD OF ACCOUNTS 24 METROPOLITAN SCHOOL DISTRICT OF WARREN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. . . . (g) Be adequately documented. . . ." Indiana Code 36-1-12-2 states: "As used in this chapter, 'public work' means the construction, reconstruction, alteration, or renovation of a public building, airport facility, or other structure that is paid for out of a public fund or out of a special assessment. The term includes the construction, alteration, or repair of a highway, street, alley, bridge, sewer, drain, or other improvement that is paid for out of a public fund or out of a special assessment. The term also includes any public work leased by a political subdivision under a lease containing an option to purchase." Indiana Code 36-1-12-4 states in part: "(a) This section applies whenever the cost of a public work project will be at least one hundred and fifty thousand dollars ($150,000). (b) The board must comply with the following procedure: (1) The board shall prepare general plans and specifications describing the kind of public work required, but shall avoid specifications which might unduly limit competition. . . . INDIANA STATE BOARD OF ACCOUNTS 25 METROPOLITAN SCHOOL DISTRICT OF WARREN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (3) Upon the filing of the plans and specifications, the board shall publish notice in accordance with IC 5-3-1 calling for sealed proposals for the public work needed. If the board receives electronic bids as set forth in subsection (d), the board shall also provide electronic access to the notice of the bid solicitation through the computer gateway administered under IC 4-13.1-2-2(a)(6) by the office of technology. . . . (8) Except as provided in subsection (c), the board shall: (A) award the contract for public work or improvements to the lowest responsible and responsive bidder; or (B) reject all bids submitted. . . ." Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. The failure to maintain adequate documentation prevented the determination of the School Corporation's compliance with the Allowable Costs/Cost Principles compliance requirement. Questioned Costs Questioned costs of $275,170 were identified as noted in the Condition and Context. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure compliance and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-005 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425D Federal Award Number and Year (or Other Identifying Number): S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Internal controls over vendor related disbursements were not effective at ensuring expenditures related to the Nurse's office and Administration building renovation construction projects were adequately documented prior to payment. Forty accounts payable vouchers (APV) were selected for testing. Three APV's for one vendor did not include itemized invoices for payments related to the construction projects. The School Corporation obtained a combined quote for the two construction projects, in the amount of $185,000, which was signed by both parties. The School Corporation did not advertise for bids, obtain sealed bids, or enter into a contract for the construction projects. In addition, while the quote was for a total cost of $185,000, total payments made to the vendor from ESSER II funds were $275,170. Due to the lack of supporting documentation, we were unable to determine if the $275,170 paid to the vendor was for the construction projects, or if other expenses had been paid. The total $275,170 was considered questioned costs. The lack of internal controls and noncompliance were isolated to the vendor and the renovation projects noted above. INDIANA STATE BOARD OF ACCOUNTS 24 METROPOLITAN SCHOOL DISTRICT OF WARREN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. . . . (g) Be adequately documented. . . ." Indiana Code 36-1-12-2 states: "As used in this chapter, 'public work' means the construction, reconstruction, alteration, or renovation of a public building, airport facility, or other structure that is paid for out of a public fund or out of a special assessment. The term includes the construction, alteration, or repair of a highway, street, alley, bridge, sewer, drain, or other improvement that is paid for out of a public fund or out of a special assessment. The term also includes any public work leased by a political subdivision under a lease containing an option to purchase." Indiana Code 36-1-12-4 states in part: "(a) This section applies whenever the cost of a public work project will be at least one hundred and fifty thousand dollars ($150,000). (b) The board must comply with the following procedure: (1) The board shall prepare general plans and specifications describing the kind of public work required, but shall avoid specifications which might unduly limit competition. . . . INDIANA STATE BOARD OF ACCOUNTS 25 METROPOLITAN SCHOOL DISTRICT OF WARREN COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (3) Upon the filing of the plans and specifications, the board shall publish notice in accordance with IC 5-3-1 calling for sealed proposals for the public work needed. If the board receives electronic bids as set forth in subsection (d), the board shall also provide electronic access to the notice of the bid solicitation through the computer gateway administered under IC 4-13.1-2-2(a)(6) by the office of technology. . . . (8) Except as provided in subsection (c), the board shall: (A) award the contract for public work or improvements to the lowest responsible and responsive bidder; or (B) reject all bids submitted. . . ." Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective internal control system enabled noncompliance to go undetected. The failure to maintain adequate documentation prevented the determination of the School Corporation's compliance with the Allowable Costs/Cost Principles compliance requirement. Questioned Costs Questioned costs of $275,170 were identified as noted in the Condition and Context. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure compliance and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
U.S. Department of Labor Federal Financial Assistance Listing 17.258/17.259/17.278 WIOA Cluster Activities Allowed or Unallowed Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria ? 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. 2 CFR 200.403 outlines factors affecting the allowability of costs including that these costs ?be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles? and ?be adequately documented?. Condition ? A portion of the County?s expenditures identified as eligible and claimed under the WIOA Cluster program were disallowed by the United States Department of Labor due the lack of appropriate documentation justifying specific costs charged to the program related to one vendor ? Garcia Professional Services, LLC. Also, the local board?s contract entered into with Garcia Professional Solutions, LLC. did not adequately address the required contract terms as follows: 1. Total dollar value of the contract to justify procurement method utilized. 2. Terms for payment to ensure payments are only made for verified services received and adequately documented. 3. Contract provisions stipulated in Appendix II to Part 200 of the Uniform Guidance, including Equal Employment Opportunity, Rights to Inventions Made Under a Contract or Agreement, Debarment and Suspension, and Byrd Anti-Lobbying Amendment. Cause ? The County made payments based on the local board?s contract and did not have an internal control process in place to ensure allowable activities or unallowed requirements were met. Effect ? Ineligible expenditures were reported under the program. Questioned Costs ? The total amount reported that should have been excluded was $84,000. Context/Sampling ? An initial nonstatistical sample of 7 expenditures were selected for testing, which accounted for $384,133 of $1,239,983 program expenditures. There was one error identified for expenditures without adequate documentation related to Garcia Professional Solutions, LLC. It was determined that there were 12 payments to Garcia Professional Solutions, LLC. in the amount of $84,000 that were charged to the program. Repeat Finding from Prior Years ? No. Recommendation ? We recommend the County implement a control process which includes the applicable activities allowable or unallowed requirements. View of Responsible Officials ? Johnson County disagrees with the underlying premises of this finding. The expenditures referred to above were expenditures of the East Central Iowa Workforce Development Board (ECIWDB) and not direct expenses of the County. The ECIWDB contracted with Johnson County to provide fiscal agent services. The ECIWDB then entered into a contract with Garcia Professional Solutions, LLC (?GPS?) to provide administrative support services for the Board. Iowa Workforce Development did not provide adequate guidance to ECIWDB as to the DOL-required terms and the terms of that services contract between ECIWDB and GPS did not contain any standards of documentation which DOL later claimed applied to said contract. The County had no input into the contract between the ECIWDB and GPS, nor was the County a party to said contract. Any alleged deficiencies within that contract between the ECIWDB and GPS are solely the responsibility of the ECIWDB Board and/or Iowa Workforce Development. In our fiscal agent role, the County was obliged to honor payment requests submitted to the Board; in that regard we had to make payments to GPS provided those payment requests were invoiced to ECIWDB consistent with the ECIWDB-GPS contract, which they were.
U.S. Department of Labor Federal Financial Assistance Listing 17.258/17.259/17.278 WIOA Cluster Activities Allowed or Unallowed Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria ? 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. 2 CFR 200.403 outlines factors affecting the allowability of costs including that these costs ?be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles? and ?be adequately documented?. Condition ? A portion of the County?s expenditures identified as eligible and claimed under the WIOA Cluster program were disallowed by the United States Department of Labor due the lack of appropriate documentation justifying specific costs charged to the program related to one vendor ? Garcia Professional Services, LLC. Also, the local board?s contract entered into with Garcia Professional Solutions, LLC. did not adequately address the required contract terms as follows: 1. Total dollar value of the contract to justify procurement method utilized. 2. Terms for payment to ensure payments are only made for verified services received and adequately documented. 3. Contract provisions stipulated in Appendix II to Part 200 of the Uniform Guidance, including Equal Employment Opportunity, Rights to Inventions Made Under a Contract or Agreement, Debarment and Suspension, and Byrd Anti-Lobbying Amendment. Cause ? The County made payments based on the local board?s contract and did not have an internal control process in place to ensure allowable activities or unallowed requirements were met. Effect ? Ineligible expenditures were reported under the program. Questioned Costs ? The total amount reported that should have been excluded was $84,000. Context/Sampling ? An initial nonstatistical sample of 7 expenditures were selected for testing, which accounted for $384,133 of $1,239,983 program expenditures. There was one error identified for expenditures without adequate documentation related to Garcia Professional Solutions, LLC. It was determined that there were 12 payments to Garcia Professional Solutions, LLC. in the amount of $84,000 that were charged to the program. Repeat Finding from Prior Years ? No. Recommendation ? We recommend the County implement a control process which includes the applicable activities allowable or unallowed requirements. View of Responsible Officials ? Johnson County disagrees with the underlying premises of this finding. The expenditures referred to above were expenditures of the East Central Iowa Workforce Development Board (ECIWDB) and not direct expenses of the County. The ECIWDB contracted with Johnson County to provide fiscal agent services. The ECIWDB then entered into a contract with Garcia Professional Solutions, LLC (?GPS?) to provide administrative support services for the Board. Iowa Workforce Development did not provide adequate guidance to ECIWDB as to the DOL-required terms and the terms of that services contract between ECIWDB and GPS did not contain any standards of documentation which DOL later claimed applied to said contract. The County had no input into the contract between the ECIWDB and GPS, nor was the County a party to said contract. Any alleged deficiencies within that contract between the ECIWDB and GPS are solely the responsibility of the ECIWDB Board and/or Iowa Workforce Development. In our fiscal agent role, the County was obliged to honor payment requests submitted to the Board; in that regard we had to make payments to GPS provided those payment requests were invoiced to ECIWDB consistent with the ECIWDB-GPS contract, which they were.
U.S. Department of Labor Federal Financial Assistance Listing 17.258/17.259/17.278 WIOA Cluster Activities Allowed or Unallowed Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria ? 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. 2 CFR 200.403 outlines factors affecting the allowability of costs including that these costs ?be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles? and ?be adequately documented?. Condition ? A portion of the County?s expenditures identified as eligible and claimed under the WIOA Cluster program were disallowed by the United States Department of Labor due the lack of appropriate documentation justifying specific costs charged to the program related to one vendor ? Garcia Professional Services, LLC. Also, the local board?s contract entered into with Garcia Professional Solutions, LLC. did not adequately address the required contract terms as follows: 1. Total dollar value of the contract to justify procurement method utilized. 2. Terms for payment to ensure payments are only made for verified services received and adequately documented. 3. Contract provisions stipulated in Appendix II to Part 200 of the Uniform Guidance, including Equal Employment Opportunity, Rights to Inventions Made Under a Contract or Agreement, Debarment and Suspension, and Byrd Anti-Lobbying Amendment. Cause ? The County made payments based on the local board?s contract and did not have an internal control process in place to ensure allowable activities or unallowed requirements were met. Effect ? Ineligible expenditures were reported under the program. Questioned Costs ? The total amount reported that should have been excluded was $84,000. Context/Sampling ? An initial nonstatistical sample of 7 expenditures were selected for testing, which accounted for $384,133 of $1,239,983 program expenditures. There was one error identified for expenditures without adequate documentation related to Garcia Professional Solutions, LLC. It was determined that there were 12 payments to Garcia Professional Solutions, LLC. in the amount of $84,000 that were charged to the program. Repeat Finding from Prior Years ? No. Recommendation ? We recommend the County implement a control process which includes the applicable activities allowable or unallowed requirements. View of Responsible Officials ? Johnson County disagrees with the underlying premises of this finding. The expenditures referred to above were expenditures of the East Central Iowa Workforce Development Board (ECIWDB) and not direct expenses of the County. The ECIWDB contracted with Johnson County to provide fiscal agent services. The ECIWDB then entered into a contract with Garcia Professional Solutions, LLC (?GPS?) to provide administrative support services for the Board. Iowa Workforce Development did not provide adequate guidance to ECIWDB as to the DOL-required terms and the terms of that services contract between ECIWDB and GPS did not contain any standards of documentation which DOL later claimed applied to said contract. The County had no input into the contract between the ECIWDB and GPS, nor was the County a party to said contract. Any alleged deficiencies within that contract between the ECIWDB and GPS are solely the responsibility of the ECIWDB Board and/or Iowa Workforce Development. In our fiscal agent role, the County was obliged to honor payment requests submitted to the Board; in that regard we had to make payments to GPS provided those payment requests were invoiced to ECIWDB consistent with the ECIWDB-GPS contract, which they were.
U.S. Department of Labor Federal Financial Assistance Listing 17.258/17.259/17.278 WIOA Cluster Activities Allowed or Unallowed Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria ? 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. 2 CFR 200.403 outlines factors affecting the allowability of costs including that these costs ?be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles? and ?be adequately documented?. Condition ? A portion of the County?s expenditures identified as eligible and claimed under the WIOA Cluster program were disallowed by the United States Department of Labor due the lack of appropriate documentation justifying specific costs charged to the program related to one vendor ? Garcia Professional Services, LLC. Also, the local board?s contract entered into with Garcia Professional Solutions, LLC. did not adequately address the required contract terms as follows: 1. Total dollar value of the contract to justify procurement method utilized. 2. Terms for payment to ensure payments are only made for verified services received and adequately documented. 3. Contract provisions stipulated in Appendix II to Part 200 of the Uniform Guidance, including Equal Employment Opportunity, Rights to Inventions Made Under a Contract or Agreement, Debarment and Suspension, and Byrd Anti-Lobbying Amendment. Cause ? The County made payments based on the local board?s contract and did not have an internal control process in place to ensure allowable activities or unallowed requirements were met. Effect ? Ineligible expenditures were reported under the program. Questioned Costs ? The total amount reported that should have been excluded was $84,000. Context/Sampling ? An initial nonstatistical sample of 7 expenditures were selected for testing, which accounted for $384,133 of $1,239,983 program expenditures. There was one error identified for expenditures without adequate documentation related to Garcia Professional Solutions, LLC. It was determined that there were 12 payments to Garcia Professional Solutions, LLC. in the amount of $84,000 that were charged to the program. Repeat Finding from Prior Years ? No. Recommendation ? We recommend the County implement a control process which includes the applicable activities allowable or unallowed requirements. View of Responsible Officials ? Johnson County disagrees with the underlying premises of this finding. The expenditures referred to above were expenditures of the East Central Iowa Workforce Development Board (ECIWDB) and not direct expenses of the County. The ECIWDB contracted with Johnson County to provide fiscal agent services. The ECIWDB then entered into a contract with Garcia Professional Solutions, LLC (?GPS?) to provide administrative support services for the Board. Iowa Workforce Development did not provide adequate guidance to ECIWDB as to the DOL-required terms and the terms of that services contract between ECIWDB and GPS did not contain any standards of documentation which DOL later claimed applied to said contract. The County had no input into the contract between the ECIWDB and GPS, nor was the County a party to said contract. Any alleged deficiencies within that contract between the ECIWDB and GPS are solely the responsibility of the ECIWDB Board and/or Iowa Workforce Development. In our fiscal agent role, the County was obliged to honor payment requests submitted to the Board; in that regard we had to make payments to GPS provided those payment requests were invoiced to ECIWDB consistent with the ECIWDB-GPS contract, which they were.
FINDING 2022-003 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 20611-042-PN01, 20619-042-PN01, 21611-042-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 19 CENTRAL NOBLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its members. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for 20611-042-PN01, 20619-042-PN01, and 21611-042-PN01 grant awards could not be verified for the individual schools to verify if the minimum amount per the grant awards was expended and properly reported to the IDOE as required. The lack of internal controls and noncompliance were isolated to the 19611-042-PN01, 19619-042-PN01, 20611-042-PN01, 20619-042-PN01, and 21611-042-PN01 grant awards. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented. . . . " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." INDIANA STATE BOARD OF ACCOUNTS 20 CENTRAL NOBLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 20611-042-PN01, 20619-042-PN01, 21611-042-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 19 CENTRAL NOBLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its members. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for 20611-042-PN01, 20619-042-PN01, and 21611-042-PN01 grant awards could not be verified for the individual schools to verify if the minimum amount per the grant awards was expended and properly reported to the IDOE as required. The lack of internal controls and noncompliance were isolated to the 19611-042-PN01, 19619-042-PN01, 20611-042-PN01, 20619-042-PN01, and 21611-042-PN01 grant awards. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented. . . . " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." INDIANA STATE BOARD OF ACCOUNTS 20 CENTRAL NOBLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 20611-042-PN01, 20619-042-PN01, 21611-042-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 19 CENTRAL NOBLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its members. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for 20611-042-PN01, 20619-042-PN01, and 21611-042-PN01 grant awards could not be verified for the individual schools to verify if the minimum amount per the grant awards was expended and properly reported to the IDOE as required. The lack of internal controls and noncompliance were isolated to the 19611-042-PN01, 19619-042-PN01, 20611-042-PN01, 20619-042-PN01, and 21611-042-PN01 grant awards. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented. . . . " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." INDIANA STATE BOARD OF ACCOUNTS 20 CENTRAL NOBLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 20611-042-PN01, 21611-042-PN01, 21619-042-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness; Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 19 DEKALB COUNTY CENTRAL UNITED SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its members. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for 20611-042-PN01, 21611-042-PN01, and 21619-042-PN01 grant awards could not be verified for the individual schools to verify the minimum amount per the grant awards was expended and properly reported to the IDOE as required. The lack of internal controls and noncompliance were isolated to the 20611-042-PN01, 21611-042-PN01, and 21619-042-PN01 grant awards. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." INDIANA STATE BOARD OF ACCOUNTS 20 DEKALB COUNTY CENTRAL UNITED SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. Auditor's Response Our responsibility is to express an opinion on the School Corporation's compliance. The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative, which would include the Matching, Level of Effort, Earmarking compliance requirement.
FINDING 2022-004 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 20611-042-PN01, 21611-042-PN01, 21619-042-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness; Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 19 DEKALB COUNTY CENTRAL UNITED SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its members. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for 20611-042-PN01, 21611-042-PN01, and 21619-042-PN01 grant awards could not be verified for the individual schools to verify the minimum amount per the grant awards was expended and properly reported to the IDOE as required. The lack of internal controls and noncompliance were isolated to the 20611-042-PN01, 21611-042-PN01, and 21619-042-PN01 grant awards. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." INDIANA STATE BOARD OF ACCOUNTS 20 DEKALB COUNTY CENTRAL UNITED SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. Auditor's Response Our responsibility is to express an opinion on the School Corporation's compliance. The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative, which would include the Matching, Level of Effort, Earmarking compliance requirement.
FINDING 2022-004 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 20611-042-PN01, 21611-042-PN01, 21619-042-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness; Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 19 DEKALB COUNTY CENTRAL UNITED SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its members. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for 20611-042-PN01, 21611-042-PN01, and 21619-042-PN01 grant awards could not be verified for the individual schools to verify the minimum amount per the grant awards was expended and properly reported to the IDOE as required. The lack of internal controls and noncompliance were isolated to the 20611-042-PN01, 21611-042-PN01, and 21619-042-PN01 grant awards. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." INDIANA STATE BOARD OF ACCOUNTS 20 DEKALB COUNTY CENTRAL UNITED SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. Auditor's Response Our responsibility is to express an opinion on the School Corporation's compliance. The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative, which would include the Matching, Level of Effort, Earmarking compliance requirement.
(2022-022) Title: Internal control over P-EBT Food Benefits needs improvement Prior Year Findings: None State Department: Health and Human Services State Bureau: Office for Family Independence Federal Agency: U.S. Department of Agriculture Assistance Listing Title: Pandemic EBT Food Benefits (P-EBT) (COVID-19) Assistance Listing Number: 10.542 Federal Award Identification Number: P-EBT Benefits, Maine Compliance Area: Activities allowed or unallowed Allowable costs/cost principles Eligibility Type of Finding: Material weakness Material noncompliance Questioned costs Known Questioned Costs: $61,507,558 Likely Questioned Costs: $61,507,558. The full amount of P-EBT Food Benefits issued during fiscal year 2022 are reported as known questioned costs. Criteria: 2 CFR 200.303; 2 CFR 200.403; 7 CFR 274.5; Families First Coronavirus Response Act (FFCRA) (Public Law 116-127), Section 1101; State Plan for Pandemic EBT: Children in School, School Year 2020-2021; State Plan for Pandemic EBT: Children in School and Child Care, Summer 2021; State Plan for Pandemic EBT: Children in School/Child Care 2021-2022 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Costs must be adequately documented. The State?s financial management systems, including records documenting compliance with the terms and conditions of the Federal award, must be sufficient to determine that such funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. The State is required to maintain Electronic Benefit Transfer (EBT) issuance, inventory, reconciliation, and other accountability records for a period of three years. The State agency shall control all issuance documents which establish household eligibility while the documents are transferred and processed within the State. The State agency shall use numbers, batching, inventory control logs, or similar controls from the point of initial receipt through the issuance and reconciliation process. The Department must carry out the Pandemic EBT (P-EBT) program, authorized by the FFCRA, in accordance with their State agency plan approved by the U.S. Department of Agriculture (USDA). The State was required to submit plans to the USDA as a precondition for participation in the P-EBT Food Benefits program. The plans outline the proposed framework for operating the program including details on how benefits will be issued, estimates for the total amount of P-EBT benefits and the number of children participating, tentative issuance schedules, and how the State will identify eligible school children and children in child care. Three separate plans were approved by the USDA for P-EBT benefit issuances during fiscal year 2022: School Year 2020- 2021, Summer 2021, and School Year 2021-2022. Condition: The FFCRA authorized the establishment of the P-EBT Food Benefits program in response to the COVID-19 public health emergency. The P-EBT program is administered by the Office for Family Independence (OFI) and provides nutrition assistance for school-age children who would have received free or reduced-price school meals under the National School Lunch Program and School Breakfast Program, and children in child care whose child-care facility was closed or had reduced attendance/hours due to the COVID-19 public health emergency. As outlined in the State?s USDA-approved plans, OFI established an agreement with the Maine Department of Education (MDOE) to provide information required for issuance of P-EBT benefits to eligible children. MDOE provided data on children participating in the Free and Reduced School Lunch Program as the starting point for eligibility determinations under the P-EBT program. OFI utilized this information to apply additional eligibility criteria and build issuance files for P-EBT benefit processing. The agreement between OFI and MDOE established OFI as the responsible party for the maintenance of data used for determining client eligibility and distributing benefits. Federal guidance over the P-EBT program outlines that audit procedures provide assurance that the Department has established and implemented processes to properly determine program eligibility and benefit levels. This includes testing a sample of clients who were issued P-EBT benefits during the fiscal year to verify consistency with the State?s USDA-approved plans and compliance with Federal program requirements. The Office of the State Auditor (OSA) requested original data files containing client and benefit issuance information utilized by OFI during the fiscal year for all P-EBT issuances that occurred. OFI could not provide OSA with these files. Without a population of the original client and benefit information transmitted for P-EBT issuance, OSA is unable to verify compliance with Federal program eligibility and allowability requirements. As a result, all P-EBT benefits issued during fiscal year 2022 totaling $61,507,558 are considered questioned costs. Context: In fiscal year 2022, the State provided approximately 115,000 P-EBT clients with $61.5 million in Federal benefits. Cause: ? Lack of supervisory oversight ? Lack of adequate procedures Effect: ? Known questioned costs ? Potential future questioned costs and disallowances ? Noncompliance with Federal regulations Recommendation: We recommend that the Department establish procedures to ensure that documentation in support of P-EBT eligibility determinations and allowability of resulting benefit issuances can be provided to corroborate Federal award program expenditures and demonstrate compliance with Federal regulations. Corrective Action Plan: See F-11 Management?s Response: The Department disagrees with this finding. The Department provided the Office of the State Auditor (OSA) with all material used to determine P-EBT benefits. While we acknowledge that due to restrictions imposed on us through a Memorandum of Understanding we have with Maine?s Department of Education (MDOE), which called for the destruction of MDOE's original records, we did provide OSA with the modified records used to determine eligibility benefits. This modification (such as removal of duplicates and address correction) was necessary for ingestion of these records into our Automated Client Eligibility System (ACES), the files were based on an exact replica of MDOE's original data files. These files, the output (client payments) and supporting information necessary for OSA to conduct testing and verify compliance with federal program requirements has been and continues to be available. We believe that the costs are allowable and supported by adequate documentation as required by the Uniform Guidance. Without performing audit testing on the population of payments in question, there is no basis for questioning compliance with eligibility requirements for this population and no basis for questioned costs. It should not be assumed that the entire population is considered ineligible without actually performing audit testing. Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104 Auditor?s Concluding Remarks: The Department has not provided OSA with all requested documentation used to determine P-EBT benefits as outlined below: 1. Files received from MDOE were not provided: The files containing raw student data provided to OFI from MDOE were destroyed after transfer. OFI contends that this was done in accordance with the MOU in place between OFI and MDOE; however, the MOU further states that OFI should maintain the data used for determining client eligibility and distribution of benefits. In addition, while MDOE could recreate the student data, the files would not be adequate because benefit allotments and client identification information applied by OFI prior to P-EBT benefit issuance would not be included. Auditor's Concluding Remarks are continued on the following page. 2. Modified files based on MDOE data were provided: As noted in Management?s Response, modifications were made to MDOE raw student data files so that the files could be imported into OFI?s database. These modified files were used by OFI to generate benefit issuance files; however, the files contained student data from MDOE but did not provide client identification information or benefit allotment applied to each client. While OFI asserts that the files are based on an exact replica of MDOE?s original data files, OSA is unable to verify that the data presented in the modified files is an exact replica, that the data is accurate, or that all P-EBT eligible clients are included in the modified files. 3. Benefit Issuance files were not provided: OFI could not provide these files to OSA as they were not maintained in accordance with Federal regulations. Issuance files represent the information provided for the establishment and processing of benefits and contain the P- EBT benefit amounts allotted and related eligibility criteria used to issue Federal benefits to each child/client during the fiscal year. These benefit issuance files would have provided OSA an accurate population in order to test Federal compliance requirements for P-EBT eligibility and resulting benefit payment allowability. 4. Paid Benefit files were provided: OFI provided OSA with files containing information on paid benefit issuances during fiscal year 2022, referenced as the output (client payments) files in Management?s Response. While the data fields may be similar to the benefit issuance files used to process eligible clients and related benefit allotments, OSA does not have assurance that the output (client payments) file is accurate, complete, and aligns with the intended P-EBT recipients as established by the benefit issuance files. OFI did not provide OSA with all material used to determine P-EBT benefits. As outlined above, OFI provided modified records rather than original records because OFI did not maintain original issuance files utilized to provide client P-EBT benefits. Federal requirement 7 CFR 274.5 requires that States maintain issuance records for a period of three years. OFI failed to do so, resulting in noncompliance with Federal regulations. Because of OFI?s failure to provide issuance files, OSA was unable to test compliance with P-EBT eligibility and allowability. In accordance with 2 CFR 200.403, costs must be adequately documented. OFI could not provide documentation to support compliance with the terms and conditions of the Federal award to determine that such funds have been used in accordance with Federal program regulations. Therefore, OSA questions all costs for the program. The finding remains as stated. (State Number: 22-1108-05)
(2022-027) Title: Internal control over EBT reconciliation procedures needs improvement Prior Year Findings: See Schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Office for Family Independence Federal Agency: U.S. Department of Agriculture Assistance Listing Title: SNAP Cluster (COVID-19) Pandemic EBT Food Benefits (P-EBT) (COVID-19) Assistance Listing Number: 10.551, 10.561; 10.542 Federal Award Identification Number: SNAP Benefits, Maine; P-EBT Benefits, Maine Compliance Area: Allowable costs/cost principles Special tests and provisions Type of Finding: Significant deficiency Questioned costs Known Questioned Costs: $80,555 under ALN 10.542, P-EBT Food Benefits Likely Questioned Costs: $80,555 under ALN 10.542, P-EBT Food Benefits Criteria: 2 CFR 200.303; 2 CFR 200.403; 7 CFR 274.4 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. To be allowable under Federal awards, costs must be necessary and reasonable for the performance of the Federal award and be adequately documented. The Department shall account for all Electronic Benefit Transfer (EBT) issuances through a reconciliation of total funds entered into, exiting from, and remaining in the EBT system each day. Condition: The Supplemental Nutrition Assistance Program (SNAP) provides monthly benefits to eligible households to purchase nutritious foods. The Pandemic EBT (P-EBT) Food Benefits program provides temporary emergency nutrition benefits to eligible school children. Both programs utilize EBT cards as the mechanism to provide benefits. Benefit information is transmitted by the Department to the Electronic Payment Processing and Information Control (EPPIC) system for processing. As EBT purchases are made by SNAP and P-EBT clients, EPPIC automatically draws Federal funds using the Automated Standard Application for Payments (ASAP) system in order to pay retailers. The Department is required by Federal program regulations to reconcile EBT activity between the systems every day. The Department did not perform daily reconciliations from July 2021 through April 2022. The Department retrospectively performed these daily reconciliations in April 2022. This retrospective reconciliation process identified an error in July 2021 SNAP benefit issuances. Benefits totaling $80,555 were incorrectly issued out of the Federal P-EBT Food Benefits program instead of the Federal/State SNAP program due to an EPPIC processing error. The error has not been corrected as of February 2023. Context: In fiscal year 2022, the State provided approximately: ? 119,000 SNAP clients with $466 million in Federal benefits, and ? 115,000 P-EBT clients with $61.5 million in Federal benefits. Cause: ? Lack of adequate policies and procedures ? Lack of supervisory oversight to ensure required reconciliations are completed ? The staff member responsible for performing this Federal requirement did not have access to the ASAP system for nine months of the fiscal year, which is needed to perform the daily reconciliation. Access to the ASAP system was granted in April 2022. Effect: ? SNAP program expenditures are understated and P-EBT Food Benefits program expenditures are overstated by $80,555 as reported to the Federal government. ? Known questioned costs ? Potential future questioned costs and disallowances ? Noncompliance with Federal regulations Recommendation: We recommend that the Department maintain policies and procedures to ensure compliance with Federal program regulations and that require: ? completion of EBT reconciliations on a daily basis, and ? timely correction of issuance errors. Corrective Action Plan: See F-13 Management?s Response: The Department partially agrees with this finding. The Department agrees that reconciliations were not completed as required until April of 2022, but that they were done retrospectively. The Department disagrees that there are questioned costs in the amount of $80,555. This debt was not caused by a failure to perform reconciliations. Rather, it was discovered by the retroactive reconciliations performed by the Department. Contact: Anthony Pelotte, Director, Office for Family Independence, DHHS, 207-624-4104 Auditor?s Concluding Remarks: In accordance with 7 CFR 274.4, the Department is required to perform daily reconciliations of the EBT system. The Department?s failure to perform these daily reconciliations resulted in noncompliance with Federal regulations. Furthermore, if the daily reconciliations had been performed as required, the issuance error would have been detected and corrected in a timely manner, preventing reoccurrence throughout the month of July 2021. In accordance with 2 CFR 200.403, for a cost to be allowable under a Federal award, the costs must be reasonable and necessary for the performance of the Federal award. Issuing benefits out of the wrong Federal program is not a necessary cost for the performance of the Federal award; therefore, the Office of the State Auditor questions the allowability of these costs. The finding remains as stated. (State Number: 22-1108-03)
FINDING 2022-003 Subject: Title I Grants to Local Educational Agencies - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A190014, S010A200014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles 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 Allowable Costs/Cost Principles compliance requirement. Of 25 employees tested, 2 did not have supporting documentation or personnel reports, such as time and effort logs, to support the time charged to the grant. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; INDIANA STATE BOARD OF ACCOUNTS 18 CONCORD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause Management had not established a system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: Title I Grants to Local Educational Agencies - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A190014, S010A200014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles 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 Allowable Costs/Cost Principles compliance requirement. Of 25 employees tested, 2 did not have supporting documentation or personnel reports, such as time and effort logs, to support the time charged to the grant. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; INDIANA STATE BOARD OF ACCOUNTS 18 CONCORD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause Management had not established a system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2022-024 Improve Controls over Period of Performance Compliance Requirement: Period of Performance Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.667 ? Social Services Block Grant 93.958 ? Block Grants for Community Mental Health Federal Award Number: 2201GASOSR (Year: 2022), B09SM082594 (Year: 2020) Questioned Costs: $167,480.00 Description: The Georgia Department of Behavioral Health and Developmental Disabilities should improve internal controls to ensure that program costs are obligated within the period of performance and liquidated within the allowed time period. Background Information: The Social Services Block Grant (SSBG) is a flexible funding source that allows states and territories to tailor social service programming to their population?s needs. Through the SSBG, states provide essential social services that help achieve a myriad of goals to reduce dependency and promote self-sufficiency; protect children and adults from neglect, abuse, and exploitation; and help individuals who are unable to take care of themselves to stay in their homes or to find the best institutional arrangements. The Community Mental Health Services Block Grant (MHBG) program was created to provide funds to states and territories to enable them to carry out their respective plans for providing comprehensive community-based mental health services for adults with serious mental illness and children with serious emotional disturbances. MHBG program funds are allocated to individual states based upon a formula. This funding may be distributed to cities, counties, or service providers within each state to carry out activities associated with the state plan. Funds associated with the SSBG and MHBG programs are administered by the Department of Behavioral Health and Developmental Disabilities (DBHDD). The DBHDD is responsible for becoming familiar with the performance period during which recipients must obligate and liquidate costs for each of these programs. These periods typically align with the federal fiscal year of October 1 through September 30, and payments for costs incurred before a grant award?s beginning date or after the liquidation period are not allowed without the grantor?s prior approval. Criteria: As a recipient of federal awards, the DBHDD is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant 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 200.303 ? Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 ? Factors Affecting Allowability of Costs state that ?costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity? (g) Be adequately documented, (h) Cost must be incurred during the approved budget period?? Additionally, provisions included in the Uniform Guidance, Section 200.77 state, ?Period of performance means the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award.? Further, the DBHDD?s policies 17-202 ? Federal Fund Source and Parent Project Code Assignments and 17-203 ? Federal Financial Report Preparation, Reconciliation, and Submission prescribe actions that must be taken by staff to ensure that costs are obligated, incurred, and liquidated within the appropriate period as specified in each grant award?s terms and conditions. Condition: Our audit of the SSBG program included a review of expenditures with performance period beginning dates during the audit period to ensure that costs were not incurred before the allowable time period. A sample of two expenditures was randomly selected for testing using a non-statistical sampling approach. Additionally, three individually significant expenditure transactions were selected for testing. Upon performing this testing, it was noted that the three individually significant expenditures reviewed were incurred before the period of performance. In addition, our audit of the MHBG program included a review of expenditures with performance period ending dates during the audit period to ensure that the amounts were obligated and liquidated within the appropriate time period. A sample of four expenditures was randomly selected for testing using a non-statistical sampling approach. Additionally, seven individually significant expenditure transactions were selected for testing. It was noted that five of these individually significant expenditures were not liquidated within 90 days of the end of the period of performance as required. Additionally, these expenditures were not identified by the DBHDD and reclassified to an appropriate, subsequent award number as is reflected within the DBHDD?s internal policy. Questioned Costs: Known questioned costs of $61,630 related to the SSGB program were identified for expenditures that were incurred before the period of performance and $105,850 related to the MHBG program were identified for expenditures that were paid outside of the allowable liquidation period. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: While the DBHDD had established procedures in place to comply with the period of performance requirements for federal awards, human error and a lack of appropriate oversight contributed to the errors identify by auditors. Also, the DBHDD policy governing period of performance does not address the correction of errors in a timely manner as the policy only recommends that corrections be completed during the close-out process for the grant award. Effect: The deficiencies noted in the period of performance process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal period of performance requirements, the DBHDD is at a higher risk of making improper payments and performing inaccurate financial reporting. Recommendation: We recommend that the DBHDD: ? Update policy, processes, and procedures associated with period of performance requirements to recommend corrections be made in a timely manner; ? Follow currently established grant close-out processes and procedures associated with period of performance requirements; and ? Incorporate additional oversight, training, and/or staff to aid in the identification of the period of performance to ensure costs are associated with the correct fund source. Views of Responsible Officials: The Department concurs with the audit finding.
2022-024 Improve Controls over Period of Performance Compliance Requirement: Period of Performance Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.667 ? Social Services Block Grant 93.958 ? Block Grants for Community Mental Health Federal Award Number: 2201GASOSR (Year: 2022), B09SM082594 (Year: 2020) Questioned Costs: $167,480.00 Description: The Georgia Department of Behavioral Health and Developmental Disabilities should improve internal controls to ensure that program costs are obligated within the period of performance and liquidated within the allowed time period. Background Information: The Social Services Block Grant (SSBG) is a flexible funding source that allows states and territories to tailor social service programming to their population?s needs. Through the SSBG, states provide essential social services that help achieve a myriad of goals to reduce dependency and promote self-sufficiency; protect children and adults from neglect, abuse, and exploitation; and help individuals who are unable to take care of themselves to stay in their homes or to find the best institutional arrangements. The Community Mental Health Services Block Grant (MHBG) program was created to provide funds to states and territories to enable them to carry out their respective plans for providing comprehensive community-based mental health services for adults with serious mental illness and children with serious emotional disturbances. MHBG program funds are allocated to individual states based upon a formula. This funding may be distributed to cities, counties, or service providers within each state to carry out activities associated with the state plan. Funds associated with the SSBG and MHBG programs are administered by the Department of Behavioral Health and Developmental Disabilities (DBHDD). The DBHDD is responsible for becoming familiar with the performance period during which recipients must obligate and liquidate costs for each of these programs. These periods typically align with the federal fiscal year of October 1 through September 30, and payments for costs incurred before a grant award?s beginning date or after the liquidation period are not allowed without the grantor?s prior approval. Criteria: As a recipient of federal awards, the DBHDD is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant 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 200.303 ? Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 ? Factors Affecting Allowability of Costs state that ?costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity? (g) Be adequately documented, (h) Cost must be incurred during the approved budget period?? Additionally, provisions included in the Uniform Guidance, Section 200.77 state, ?Period of performance means the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award.? Further, the DBHDD?s policies 17-202 ? Federal Fund Source and Parent Project Code Assignments and 17-203 ? Federal Financial Report Preparation, Reconciliation, and Submission prescribe actions that must be taken by staff to ensure that costs are obligated, incurred, and liquidated within the appropriate period as specified in each grant award?s terms and conditions. Condition: Our audit of the SSBG program included a review of expenditures with performance period beginning dates during the audit period to ensure that costs were not incurred before the allowable time period. A sample of two expenditures was randomly selected for testing using a non-statistical sampling approach. Additionally, three individually significant expenditure transactions were selected for testing. Upon performing this testing, it was noted that the three individually significant expenditures reviewed were incurred before the period of performance. In addition, our audit of the MHBG program included a review of expenditures with performance period ending dates during the audit period to ensure that the amounts were obligated and liquidated within the appropriate time period. A sample of four expenditures was randomly selected for testing using a non-statistical sampling approach. Additionally, seven individually significant expenditure transactions were selected for testing. It was noted that five of these individually significant expenditures were not liquidated within 90 days of the end of the period of performance as required. Additionally, these expenditures were not identified by the DBHDD and reclassified to an appropriate, subsequent award number as is reflected within the DBHDD?s internal policy. Questioned Costs: Known questioned costs of $61,630 related to the SSGB program were identified for expenditures that were incurred before the period of performance and $105,850 related to the MHBG program were identified for expenditures that were paid outside of the allowable liquidation period. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: While the DBHDD had established procedures in place to comply with the period of performance requirements for federal awards, human error and a lack of appropriate oversight contributed to the errors identify by auditors. Also, the DBHDD policy governing period of performance does not address the correction of errors in a timely manner as the policy only recommends that corrections be completed during the close-out process for the grant award. Effect: The deficiencies noted in the period of performance process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal period of performance requirements, the DBHDD is at a higher risk of making improper payments and performing inaccurate financial reporting. Recommendation: We recommend that the DBHDD: ? Update policy, processes, and procedures associated with period of performance requirements to recommend corrections be made in a timely manner; ? Follow currently established grant close-out processes and procedures associated with period of performance requirements; and ? Incorporate additional oversight, training, and/or staff to aid in the identification of the period of performance to ensure costs are associated with the correct fund source. Views of Responsible Officials: The Department concurs with the audit finding.
2022-002: Internal Control Over Compliance and Compliance with Allowable Costs/Cost Principles Program: U.S. Department of State AL Number: 19.016 AL Name: Iraq Assistance Program Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SLMAQM19GR2288 September 29, 2019 through June 30,2022 Program: U.S. Department of State AL Number: 19.518 AL Name: Overseas Refugee Assistance Program for Western Hemisphere Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO20CA0209 September 20, 2020 through September 29, 2021 N/A September 20, 2021 through September 29, 2022 Criteria ? Code of Federal Regulation (CFR) ?200.303, Internal Controls, Section (a) states the Organization must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the federal award. Management is responsible for establishing and maintaining a system of internal control that should include controls over its activities allowed or unallowed, allowable cost/cost principle process. CFR 200.403(g) states that for costs to be allowed under federal awards, they must be adequately documented. Condition ? During our testing of period of performance, we noted exceptions in the ability of management to support expenditures incurred and charged to federal programs. Cause ? Policies and procedures were not appropriately adhered to in certain instances to ensure that supporting documentation was maintained to evidence that costs were allowable and that an appropriate level of review and approval was completed prior to charging costs to a federal program. Questioned Costs ? $28,787 Context: Assistance Listing Number: 19.016 During our testing of the period of performance compliance requirement for grant award periods that ended during the fiscal year, we sampled 12 expenditures, totaling $292,901, for the Iraq Assistance Program and noted one item amounting to $28,766 did not have adequate supporting documentation for the subrecipient expenditures charged to the program. Assistance Listing Number: 19.518 During our testing of the period of performance compliance requirement for grant award periods that started and ended during the fiscal year, we sampled 80 expenditures, totaling $15,252, for the Overseas Refugee Assistance Program for Western Hemisphere and noted two items, totaling $21, did not have adequate supporting documentation for the subrecipient expenditures charged to the program. Effect ? An ineffective control system related to review of transactions to ensure that only allowable costs are charged to federal programs can lead to noncompliance with federal statutes, regulations, and the provisions of grant agreements that could ultimately lead to disallowed costs for the major programs. Repeat Finding ? This is not a repeat finding. Recommendation - We recommend that the Organization ensure its policies and procedures ensure that documentation of expenditure payment is maintained and that these policies and procedures are followed on a consistent basis. Views of Responsible Officials ? Management agrees with the finding and takes responsibility to comply with allowed and allowable requirements. Management through the local offices has already developed a policy to ensure that the period of performance is adhered to.
2022-003: Internal Control Over Compliance and Compliance with Allowable Costs/Cost Principles Program: U.S. Department of State AL Number: 19.016 AL Name: Iraq Assistance Program Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SLMAQM19GR2288 September 29, 2019 through June 30,2022 Program: U.S. Department of State AL Number: 19.518 AL Name: Overseas Refugee Assistance Program for Western Hemisphere Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO20CA0209 September 20, 2020 through September 29, 2021 N/A September 20, 2021 through September 29, 2022 Criteria ? CFR ?200.303, Internal Controls, Section (a) states the Organization must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the federal award. Management is responsible for establishing and maintaining a system of internal control that should include controls over its activities allowed or unallowed, allowable cost/cost principle process. CFR 200.403(g) states that for costs to be allowed under federal awards, they must be adequately documented. Condition ? During our testing of allowable costs and testing of period of performance for expenditures incurred throughout the year, we noted exceptions in the ability of management to support allocations of payroll and nonpayroll expenditures incurred in federal programs. Cause ? Policies and procedures were not appropriately adhered to in certain instances to ensure that supporting documentation was maintained to evidence that costs allocated to the program were allowable and that an appropriate level of review and approval was completed prior to charging costs to a federal program. Effect ? An ineffective control system related to review of transactions to ensure that only allowable costs are allocated to federal programs can lead to noncompliance with federal statutes, regulations, and the provisions of grant agreements that could ultimately lead to disallowed costs for the major programs. Questioned Costs ? $1,201 Context AL Number: 19.016 We sampled 25 payroll expenditures, totaling $9,560, for Iraq Assistance Programs and noted that two items, totaling $461, did not have proper documentation for allocation basis for the payroll expenditure charged to the program. Additionally, during our testing of the period of performance compliance requirement for grant costs incurred throughout the year, we sampled 40 expenditures, totaling $11,811, for Iraq Assistance Programs and noted that an additional two items, totaling $211, did not have proper documentation for allocation basis for payroll expenditures charged to the program. AL Number: 19.518 We sampled 25 payroll expenditures, totaling $9,068, for the Overseas Refugee Assistance Program for Western Hemisphere and noted that one item, amounting to $529, did not have proper documentation for allocation basis for the payroll expenditure charged to the program. Repeat Finding ? This is not a repeat finding. Recommendation - We recommend that the Organization ensure its policies and procedures ensure that documentation of expenditure payment and allocation is maintained and that these policies and procedures are followed on a consistent basis. Views of Responsible Officials - Management agrees with the finding and takes responsibility to comply with allowed and allowable requirements requirements. Management has developed a policy in the Iraq local office to aid in time and effort allocation.
2022-005: Internal Control Over Compliance and Compliance with Period of Performance Program: U.S. Department of State AL Number: 19.016 AL Name: Iraq Assistance Program Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SLMAQM19GR2288 September 29, 2019 through June 30,2022 Program: U.S. Department of State AL Number: 19.518 AL Name: Overseas Refugee Assistance Program for Western Hemisphere Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO20CA0209 September 20, 2020 through September 29, 2021 N/A September 20, 2021 through September 29, 2022 Criteria - CFR ?200.303, Internal Controls, Section (a) states the Organization must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the federal award. Management is responsible for establishing and maintaining a system of internal control that should include controls over its grants? period of performance process. In accordance with CFR Section 200.403(h), cost must be incurred during the approved budget period. The federal awarding agency is authorized at its discretion to waive prior written approvals to carry forward unobligated balances to subsequent budget period pursuant to ?200.308(e)(3). In accordance with CFR Section 200.458, pre-award costs are those incurred prior to the effective date of the federal award or subaward directly pursuant to the negotiation and in anticipation of the federal award where such costs are necessary for efficient and timely performance of the scope of the work. Such costs are allowable only to the extent they would have been allowable if incurred after the date of the federal award and only with the written approval of the federal awarding agency. In accordance with CFR Section 200.344, the federal awarding agency or pass-through entity will close out the federal award when it determines that all applicable administrative actions and all required work of the federal award have been completed by the nonfederal entity. Per CFR Section 200.344(b), unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all obligations incurred under the federal award not later than 120 calendar days after the end date of the period of performance. Condition ? During our testing of period of performance, we noted exceptions in the ability of management to support expenditures were incurred and charged to federal programs within the period of performance. Cause ? Policies and procedures were not appropriately adhered to in certain instances to ensure that supporting documentation was maintained to evidence that costs were incurred during the period of performance and that an appropriate level of review and approval was completed prior to charging costs to a federal program. Effect - The lack of adherence to the established internal control procedures around the period of performance of the award can lead to noncompliance with laws, regulations, and the provisions of grant agreements, which could ultimately lead to expenditures not being charged to the major programs in the correct period. Questioned Costs ? $29,459 Context: Assistance Listing Number: 19.016 During our testing of the period of performance compliance requirement for grant award periods that ended during the fiscal year, we sampled 12 expenditures, totaling $292,901, for the Iraq Assistance Program and noted one item amounting to $28,766 did not have adequate supporting documentation for the subrecipient expenditures charged to the program. Additionally, during our testing of the period of performance compliance requirement for grant costs incurred throughout the year, we sampled 40 expenditures, totaling $11,811, for the Iraq Assistance Programs and noted that four items, totaling $672, did not have proper documentation for the allocation of the expenditure. Assistance Listing Number: 19.518 During our testing of the period of performance compliance requirement for grant award periods that started and ended during the fiscal year, we sampled 81 expenditures, totaling $15,252, for the Overseas Refugee Assistance Program for Western Hemisphere and noted two items, totaling $21, did not have adequate supporting documentation for the subrecipient expenditures charged to the program. Repeat Finding - This finding is not a repeat finding. Recommendation - We recommend that the Organization ensure its policies and procedures ensure that documentation of when the expenditure was incurred and liquidated is maintained and that these policies and procedures are followed on a consistent basis. Views of Responsible Officials - Management agrees with the finding and takes responsibility to comply with the period of performance compliance requirements. Management through the local offices has already developed a policy to ensure that the period of performance is adhered to.
2022-006: Internal Control Over Compliance and Compliance with Period of Performance Program: U.S. Department of State AL Number: 19.518 AL Name: Overseas Refugee Assistance Program for Western Hemisphere Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO20CA0209 September 20, 2020 through September 29, 2021 N/A September 20, 2021 through September 29, 2022 Criteria ? CFR ?200.303, Internal Controls, Section (a) states the Organization must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the federal award. Management is responsible for establishing and maintaining a system of internal control that should include controls over its grants? period of performance process. In accordance with CFR Section 200.403(h), cost must be incurred during the approved budget period. The federal awarding agency is authorized at its discretion to waive prior written approvals to carry forward unobligated balances to subsequent budget period pursuant to ?200.308(e)(3). In accordance with CFR Section 200.458, pre-award costs are those incurred prior to the effective date of the federal award or subaward directly pursuant to the negotiation and in anticipation of the federal award where such costs are necessary for efficient and timely performance of the scope of the work. Such costs are allowable only to the extent they would have been allowable if incurred after the date of the federal award and only with the written approval of the federal awarding agency. In accordance with CFR Section 200.344, the federal awarding agency or pass-through entity will close out the federal award when it determines that all applicable administrative actions and all required work of the federal award have been completed by the nonfederal entity. Per CFR Section 200.344(b), unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all obligations incurred under the federal award not later than 120 calendar days after the end date of the period of performance. Condition ? During our testing of period of performance, we noted exceptions where expenditures were incurred outside of the grant?s performance period. Cause ? Policies and procedures were not appropriately adhered to in certain instances to ensure that supporting documentation was maintained to evidence that costs were incurred during the period of performance and that an appropriate level of review and approval was completed prior to charging costs to a federal program. Effect - The lack of adherence to the established internal control procedures around the period of performance of the award can lead to noncompliance with law and regulations and possible loss of funding for the related program. Questioned Costs ? $125 Context: During our testing of the allowable costs/cost principles compliance requirements, we sampled 25 nonpayroll expenditures, totaling $6,365, for the Overseas Refugee Assistance Program for Western Hemisphere and noted that four items, totaling $125, were incurred and paid outside of the grant award period. Repeat Finding - This finding is a repeat finding from prior year. This finding was reported as finding 2021-001 in the 2021 reporting package. Recommendation - We recommend management revisits and considers revising its internal procedures around detecting expenditures incurred outside of the period of performance of the awards. Views of Responsible Officials - Management agrees with the finding and takes responsibility to comply with the period of performance compliance requirements. Management is emphasizing prompt period closing to ensure that no items are recorded in the wrong period.
Reference Number: 2022-016 Prior Year Finding: No Federal Agency: Department of Labor State Agency: Vermont Department of Labor (Department) Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340892055A50 (10/1/2019 ? 12/31/2022) UI356792155A50 (10/1/2020 ? 12/31/2023) UI372542255A50 (10/1/2021 ? 12/31/2024) Compliance Requirement: Allowable Costs/Cost Principles Type of Finding Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Compliance: 2 CFR section 200.403 states, in part, except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. (g) Be adequately documented. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Labor (Department) charged costs to the program that were issued without documentation of supervisory review and approval. Questioned costs: None noted. The costs were determined to be allowable. Context: For five of forty general disbursement transactions selected for testing, the Department was unable to provide documentation of supervisory review and approval prior to issuance of payment to the vendor. Cause: The Department?s procedures were not sufficient to ensure that payments were reviewed and approved prior to issuance of payment. Internal controls did not prevent or detect the errors. Effect: Unallowable costs could be charged to the program if disbursements are not reviewed by a supervisor who is knowledgeable of program regulations regarding allowable costs. Recommendation: We recommend the Department reviews and enhances its procedures and controls regarding payment processing to ensure that, prior to charging costs to the program, they are reviewed by a supervisor who is knowledgeable of the regulations regarding allowable program costs and that documentation of the review is maintained. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-017 Prior Year Finding: No Federal Agency: Department of Labor State Agency: Vermont Department of Labor (Department) Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372542255A50 (10/1/2021 ? 12/31/2024) Compliance Requirement: Period of Performance Type of Finding Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award?s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Costs were incurred and charged to the federal grant prior to the allowable start of the period of performance. Questioned costs: Below the reportable limit. Context: One of forty transactions was charged to the award before the allowable period of performance. The grant award start date was 10/1/2021 but a transaction dated 8/31/2021 in the amount of $7,421 was charged to the award. Cause: The Department of Labor?s (Department?s) procedures were not sufficient to ensure that expenditures charged to the program were incurred within the award?s period of performance. Internal controls did not prevent or detect the error. Effect: Costs could be deemed unallowable by the awarding agency if funds are expended outside of the allowable period of performance. Recommendation: The Department should review and enhance its procedures and internal controls to ensure that it charges expenditures to the program that are incurred within an award?s allowable period of performance. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-016 Prior Year Finding: No Federal Agency: Department of Labor State Agency: Vermont Department of Labor (Department) Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340892055A50 (10/1/2019 ? 12/31/2022) UI356792155A50 (10/1/2020 ? 12/31/2023) UI372542255A50 (10/1/2021 ? 12/31/2024) Compliance Requirement: Allowable Costs/Cost Principles Type of Finding Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Compliance: 2 CFR section 200.403 states, in part, except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. (g) Be adequately documented. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Labor (Department) charged costs to the program that were issued without documentation of supervisory review and approval. Questioned costs: None noted. The costs were determined to be allowable. Context: For five of forty general disbursement transactions selected for testing, the Department was unable to provide documentation of supervisory review and approval prior to issuance of payment to the vendor. Cause: The Department?s procedures were not sufficient to ensure that payments were reviewed and approved prior to issuance of payment. Internal controls did not prevent or detect the errors. Effect: Unallowable costs could be charged to the program if disbursements are not reviewed by a supervisor who is knowledgeable of program regulations regarding allowable costs. Recommendation: We recommend the Department reviews and enhances its procedures and controls regarding payment processing to ensure that, prior to charging costs to the program, they are reviewed by a supervisor who is knowledgeable of the regulations regarding allowable program costs and that documentation of the review is maintained. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-017 Prior Year Finding: No Federal Agency: Department of Labor State Agency: Vermont Department of Labor (Department) Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372542255A50 (10/1/2021 ? 12/31/2024) Compliance Requirement: Period of Performance Type of Finding Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award?s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Costs were incurred and charged to the federal grant prior to the allowable start of the period of performance. Questioned costs: Below the reportable limit. Context: One of forty transactions was charged to the award before the allowable period of performance. The grant award start date was 10/1/2021 but a transaction dated 8/31/2021 in the amount of $7,421 was charged to the award. Cause: The Department of Labor?s (Department?s) procedures were not sufficient to ensure that expenditures charged to the program were incurred within the award?s period of performance. Internal controls did not prevent or detect the error. Effect: Costs could be deemed unallowable by the awarding agency if funds are expended outside of the allowable period of performance. Recommendation: The Department should review and enhance its procedures and internal controls to ensure that it charges expenditures to the program that are incurred within an award?s allowable period of performance. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-030 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services (Agency) Federal Program: Immunization Cooperative Agreements, COVID-19 - Immunization Cooperative Agreements Assistance Listing Number: 93.268 Award Number and Year: 19NH23IP922615 (7/1/2020 ? 6/30/2024) Compliance Requirement: Allowable Costs Type of Finding Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR section 200.403(a), except where otherwise authorized by statute, in order for a cost to be allowable under Federal awards it must be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. Per 2 CFR section 200.405, a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received. This standard is met if the cost: (1) Is incurred specifically for the Federal award; (2) Benefits both the Federal award and other work of the non-Federal entity and can be distributed in proportions that may be approximated using reasonable methods; and (3) Is necessary to the overall operation of the non-Federal entity and is assignable in part to the Federal award in accordance with the principles in this subpart. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency included an unallowable cost in an administrative cost pool which was allocated to the program. Context: The Agency?s Department of Health (Department) charged a settlement payment of $3,891.30 related to a Superfund site lawsuit to an administrative cost pool, and a portion of this payment was allocated to the program. The allocated cost was not necessary or reasonable for the performance of the Federal award nor was it assignable in part to the Federal award as a cost necessary to the overall operation of the Department. Cause: The Agency?s internal controls were not operating sufficiently to ensure that costs charged to an administrative cost pool were allowable and allocable per the requirements of 2 CFR sections 200.403 and 200.405. Effect: Unallowable costs were allocated to the program. Questioned costs: Undetermined, due to the distribution of costs through the Department?s approved cost allocation plan. Recommendation: We recommend the Agency review and enhance internal controls and procedures to ensure that costs charged to administrative cost pools are allowable and allocable per 2 CFR sections 200.403 and 200.405. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-030 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Agency of Human Services (Agency) Federal Program: Immunization Cooperative Agreements, COVID-19 - Immunization Cooperative Agreements Assistance Listing Number: 93.268 Award Number and Year: 19NH23IP922615 (7/1/2020 ? 6/30/2024) Compliance Requirement: Allowable Costs Type of Finding Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR section 200.403(a), except where otherwise authorized by statute, in order for a cost to be allowable under Federal awards it must be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. Per 2 CFR section 200.405, a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received. This standard is met if the cost: (1) Is incurred specifically for the Federal award; (2) Benefits both the Federal award and other work of the non-Federal entity and can be distributed in proportions that may be approximated using reasonable methods; and (3) Is necessary to the overall operation of the non-Federal entity and is assignable in part to the Federal award in accordance with the principles in this subpart. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Agency included an unallowable cost in an administrative cost pool which was allocated to the program. Context: The Agency?s Department of Health (Department) charged a settlement payment of $3,891.30 related to a Superfund site lawsuit to an administrative cost pool, and a portion of this payment was allocated to the program. The allocated cost was not necessary or reasonable for the performance of the Federal award nor was it assignable in part to the Federal award as a cost necessary to the overall operation of the Department. Cause: The Agency?s internal controls were not operating sufficiently to ensure that costs charged to an administrative cost pool were allowable and allocable per the requirements of 2 CFR sections 200.403 and 200.405. Effect: Unallowable costs were allocated to the program. Questioned costs: Undetermined, due to the distribution of costs through the Department?s approved cost allocation plan. Recommendation: We recommend the Agency review and enhance internal controls and procedures to ensure that costs charged to administrative cost pools are allowable and allocable per 2 CFR sections 200.403 and 200.405. Views of responsible officials: Management agrees with the finding.
REFERENCE: 2022-101 CFDA NUMBER 84.425D ? COVID 19 ? EDUCATION STABILIZATION FUND CFDA NUMBER 84.425U ? COVID 19 ? EDUCATION STABILIZATION FUND U.S. DEPARTMENT OF EDUCATION ? 2021 PASSED THROUGH ARIZONA STATE DEPARTMENT OF EDUCATION GRANT NUMBER: S425D210038 & S425U210038 QUESTIONED COSTS N/A CONDITION The following errors were noted during testing of allowable costs, activities and procurement: ? For 1 of 3 vendors tested for procurement, only 1 quote was available for review. ? Vendors were not evaluated for suspension or debarment prior to purchases being made. ? For 3 of 12 disbursements tested, although the purchases are allowable under the grants, the purchases were not included in the grant budgets submitted to the Arizona Department of Education. Amended budgets were submitted on August 31, 2022. CRITERIA In accordance with 2 CFR 200.320 Methods of Procurement to be Followed, The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. In accordance with 2 CFR 200.214 Suspension and debarment, Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. In accordance with 2CFR 200.403 Factors Affecting Allowability of Costs, except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: a. Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b. Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c. Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d. Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e. Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f. Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also ? 200.306(b). g. Be adequately documented. See also ?? 200.300 through 200.309 of this part. h. Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to ? 200.308(e)(3). In accordance with OMB Compliance Supplement, Part 6 ? Internal Control, non-Federal entities receiving Federal awards establish and maintain internal control over the Federal awards 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 awards. EFFECT Program requirements were not complied with. The School may not have received the best pricing for goods or services. CAUSE Procurement procedures were not established to ensure compliance with federal regulations, including retention of quotes from an adequate number of vendors and suspension and debarment requirements. Additionally, internal controls were not designed appropriately to ensure that expenditures charged to the grant were periodically compared to the grant budgets to determine if budget amendments should be submitted. RECOMMENDATION AND BENEFIT A control system should be developed and implemented to monitor when federal expenditures require procurement, that all documentation is obtained and retained and vendors are reviewed for suspension and debarment. Additionally, internal controls should be modified to periodically compare actual expenditures under the grant with submitted budgets. This will help ensure that program requirements are complied with, the School only uses vendors that have not been suspended or debarred and budget amendments are submitted timely. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
REFERENCE: 2022-101 CFDA NUMBER 84.425D ? COVID 19 ? EDUCATION STABILIZATION FUND CFDA NUMBER 84.425U ? COVID 19 ? EDUCATION STABILIZATION FUND U.S. DEPARTMENT OF EDUCATION ? 2021 PASSED THROUGH ARIZONA STATE DEPARTMENT OF EDUCATION GRANT NUMBER: S425D210038 & S425U210038 QUESTIONED COSTS N/A CONDITION The following errors were noted during testing of allowable costs, activities and procurement: ? For 1 of 3 vendors tested for procurement, only 1 quote was available for review. ? Vendors were not evaluated for suspension or debarment prior to purchases being made. ? For 3 of 12 disbursements tested, although the purchases are allowable under the grants, the purchases were not included in the grant budgets submitted to the Arizona Department of Education. Amended budgets were submitted on August 31, 2022. CRITERIA In accordance with 2 CFR 200.320 Methods of Procurement to be Followed, The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. In accordance with 2 CFR 200.214 Suspension and debarment, Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. In accordance with 2CFR 200.403 Factors Affecting Allowability of Costs, except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: a. Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b. Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c. Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d. Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e. Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f. Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also ? 200.306(b). g. Be adequately documented. See also ?? 200.300 through 200.309 of this part. h. Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to ? 200.308(e)(3). In accordance with OMB Compliance Supplement, Part 6 ? Internal Control, non-Federal entities receiving Federal awards establish and maintain internal control over the Federal awards 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 awards. EFFECT Program requirements were not complied with. The School may not have received the best pricing for goods or services. CAUSE Procurement procedures were not established to ensure compliance with federal regulations, including retention of quotes from an adequate number of vendors and suspension and debarment requirements. Additionally, internal controls were not designed appropriately to ensure that expenditures charged to the grant were periodically compared to the grant budgets to determine if budget amendments should be submitted. RECOMMENDATION AND BENEFIT A control system should be developed and implemented to monitor when federal expenditures require procurement, that all documentation is obtained and retained and vendors are reviewed for suspension and debarment. Additionally, internal controls should be modified to periodically compare actual expenditures under the grant with submitted budgets. This will help ensure that program requirements are complied with, the School only uses vendors that have not been suspended or debarred and budget amendments are submitted timely. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
2022-002 Finding ? Federal Awards Federal Agency: U.S. Department of Treasury Federal Program: Coronavirus State and Local Recovery Funds AL Number: 21.027 Statement of Condition: Noncompliance and Significant Deficiency in Internal Control Over Compliance related to Allowable Costs. Criteria: Two expenses charged to the program were not properly supported in accordance with regulations. According to section 2 CFR 200.403, charges to Federal awards must be adequately documented. The Organization should have internal controls in place to comply with requirements of the award and federal requirements to ensure amounts charged to Federal awards are allowable, accurate and properly allocated. Context and Cause: The Organization was unable to locate two receipts of 25 expenditures tested under AL #21.027. Effect of Condition: The two expenditures tested were not adequately documented. Known Questioned Costs: $334 ? resulted in likely questioned costs greater than $25,000. Recommendation: The Organization should follow the Uniform Grant Guidance for Allowable Costs and their internal policy for retaining documentation related to federal expenditures. View of responsible officials: We concur with the finding and are implementing corrective action.
2022-002 Finding ? Federal Awards Federal Agency: U.S. Department of Treasury Federal Program: Coronavirus State and Local Recovery Funds AL Number: 21.027 Statement of Condition: Noncompliance and Significant Deficiency in Internal Control Over Compliance related to Allowable Costs. Criteria: Two expenses charged to the program were not properly supported in accordance with regulations. According to section 2 CFR 200.403, charges to Federal awards must be adequately documented. The Organization should have internal controls in place to comply with requirements of the award and federal requirements to ensure amounts charged to Federal awards are allowable, accurate and properly allocated. Context and Cause: The Organization was unable to locate two receipts of 25 expenditures tested under AL #21.027. Effect of Condition: The two expenditures tested were not adequately documented. Known Questioned Costs: $334 ? resulted in likely questioned costs greater than $25,000. Recommendation: The Organization should follow the Uniform Grant Guidance for Allowable Costs and their internal policy for retaining documentation related to federal expenditures. View of responsible officials: We concur with the finding and are implementing corrective action.