FINDING 2022-003 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, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Number and Year (or Other Identifying Number): SY 20-21 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls 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. Payroll disbursements for 3 of 11 employees tested, were not supported by the School Corporation's records. The hourly rate for 2 employees tested did not agree to the rate stated in the Board approved salary schedule. The School Corporation could not provide documentation or other justification to support their rate of pay. Additionally, the School Corporation did not retain time records for audit for the Food Service Director after leave of employment. The lack of internal controls and noncompliance were isolated to fiscal year 2020-2021. INDIANA STATE BOARD OF ACCOUNTS 16 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (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 developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 17 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective system of internal controls, as well as adequately document costs, enabled 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 that documentation will be maintained 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: 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, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Number and Year (or Other Identifying Number): SY 20-21 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls 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. Payroll disbursements for 3 of 11 employees tested, were not supported by the School Corporation's records. The hourly rate for 2 employees tested did not agree to the rate stated in the Board approved salary schedule. The School Corporation could not provide documentation or other justification to support their rate of pay. Additionally, the School Corporation did not retain time records for audit for the Food Service Director after leave of employment. The lack of internal controls and noncompliance were isolated to fiscal year 2020-2021. INDIANA STATE BOARD OF ACCOUNTS 16 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (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 developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 17 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective system of internal controls, as well as adequately document costs, enabled 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 that documentation will be maintained 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: 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, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Number and Year (or Other Identifying Number): SY 20-21 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls 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. Payroll disbursements for 3 of 11 employees tested, were not supported by the School Corporation's records. The hourly rate for 2 employees tested did not agree to the rate stated in the Board approved salary schedule. The School Corporation could not provide documentation or other justification to support their rate of pay. Additionally, the School Corporation did not retain time records for audit for the Food Service Director after leave of employment. The lack of internal controls and noncompliance were isolated to fiscal year 2020-2021. INDIANA STATE BOARD OF ACCOUNTS 16 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (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 developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 17 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective system of internal controls, as well as adequately document costs, enabled 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 that documentation will be maintained 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: 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, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Number and Year (or Other Identifying Number): SY 20-21 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls 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. Payroll disbursements for 3 of 11 employees tested, were not supported by the School Corporation's records. The hourly rate for 2 employees tested did not agree to the rate stated in the Board approved salary schedule. The School Corporation could not provide documentation or other justification to support their rate of pay. Additionally, the School Corporation did not retain time records for audit for the Food Service Director after leave of employment. The lack of internal controls and noncompliance were isolated to fiscal year 2020-2021. INDIANA STATE BOARD OF ACCOUNTS 16 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (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 developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 17 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective system of internal controls, as well as adequately document costs, enabled 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 that documentation will be maintained 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: 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, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Number and Year (or Other Identifying Number): SY 20-21 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls 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. Payroll disbursements for 3 of 11 employees tested, were not supported by the School Corporation's records. The hourly rate for 2 employees tested did not agree to the rate stated in the Board approved salary schedule. The School Corporation could not provide documentation or other justification to support their rate of pay. Additionally, the School Corporation did not retain time records for audit for the Food Service Director after leave of employment. The lack of internal controls and noncompliance were isolated to fiscal year 2020-2021. INDIANA STATE BOARD OF ACCOUNTS 16 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (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 developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 17 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective system of internal controls, as well as adequately document costs, enabled 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 that documentation will be maintained 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 2022-004 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles 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): 19611-112-PN01, 20611-112-PN01, 21611-112-PN01, 19619-112-PN01, 20619-112-PN01 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 in order to ensure compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Payroll disbursements for three of six employees tested were not supported by the School Corporation's records. The hourly rate for one employee tested did not agree to the rate stated in the School Board approved salary schedule. The rate paid was more than the amount stated in the School Board approved salary schedule. In addition, the School Corporation could not provide a contract for two of the employees tested. The total amount paid in unsupported salaries, $86,043, was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 18 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "(1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (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 developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 19 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective system of internal controls, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the Allowable Costs/Cost Principles compliance requirement. Questioned Costs Known questioned costs of $86,043 were identified as noted in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls, as well as to appropriately maintain documentation supporting costs, to ensure compliance 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 2022-004 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles 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): 19611-112-PN01, 20611-112-PN01, 21611-112-PN01, 19619-112-PN01, 20619-112-PN01 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 in order to ensure compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Payroll disbursements for three of six employees tested were not supported by the School Corporation's records. The hourly rate for one employee tested did not agree to the rate stated in the School Board approved salary schedule. The rate paid was more than the amount stated in the School Board approved salary schedule. In addition, the School Corporation could not provide a contract for two of the employees tested. The total amount paid in unsupported salaries, $86,043, was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 18 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "(1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (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 developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 19 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective system of internal controls, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the Allowable Costs/Cost Principles compliance requirement. Questioned Costs Known questioned costs of $86,043 were identified as noted in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls, as well as to appropriately maintain documentation supporting costs, to ensure compliance 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 2022-004 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles 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): 19611-112-PN01, 20611-112-PN01, 21611-112-PN01, 19619-112-PN01, 20619-112-PN01 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 in order to ensure compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Payroll disbursements for three of six employees tested were not supported by the School Corporation's records. The hourly rate for one employee tested did not agree to the rate stated in the School Board approved salary schedule. The rate paid was more than the amount stated in the School Board approved salary schedule. In addition, the School Corporation could not provide a contract for two of the employees tested. The total amount paid in unsupported salaries, $86,043, was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 18 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "(1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (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 developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 19 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective system of internal controls, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the Allowable Costs/Cost Principles compliance requirement. Questioned Costs Known questioned costs of $86,043 were identified as noted in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls, as well as to appropriately maintain documentation supporting costs, to ensure compliance 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 2022-004 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles 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): 19611-112-PN01, 20611-112-PN01, 21611-112-PN01, 19619-112-PN01, 20619-112-PN01 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 in order to ensure compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Payroll disbursements for three of six employees tested were not supported by the School Corporation's records. The hourly rate for one employee tested did not agree to the rate stated in the School Board approved salary schedule. The rate paid was more than the amount stated in the School Board approved salary schedule. In addition, the School Corporation could not provide a contract for two of the employees tested. The total amount paid in unsupported salaries, $86,043, was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 18 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "(1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (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 developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 19 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective system of internal controls, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the Allowable Costs/Cost Principles compliance requirement. Questioned Costs Known questioned costs of $86,043 were identified as noted in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls, as well as to appropriately maintain documentation supporting costs, to ensure compliance 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.
Criteria: According to 2 CFR Part 200.403, to be allowable under federal awards, costs must be adequately documented, be necessary and reasonable for the performance of the federal award, and be allocable thereto under the principles in 2 CFR Part 200, Subpart E. Additionally, according to 2 CFR Part 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and comply with established accounting policies and practices of the entity. Condition: Accurate and complete records to support disbursements were not maintained for the program. We specifically noted the following: ? SFRC is currently allocating payroll costs to the program based on budget estimates. There is not a process in place to compare the budget estimates to actual time and effort to ensure that budget estimates are accurate. ? For two of 16 payroll disbursements tested, the wages paid to the employee (used as the basis for the amount allocated to the program) did not agree with the payroll register for the selected pay period. ? For three of three non-payroll disbursements tested, the amount allocated to the program did not agree to the amount paid to the vendor. Context: 16 of 16 payroll transactions tested were allocated to the program based on budget estimates. Two of 16 payroll disbursements and three of three non-payroll disbursements did not agree with source documentation. Questioned Costs: $505 Cause: SFRC has not developed a process to compare the budget estimates to actual time and effort to ensure that budget estimates are accurate. Additionally, there was not adequate review of reimbursement requests to ensure that payroll and non-payroll disbursements agree with source documentation Effect: SFRC may not be able to demonstrate that costs charged to federal programs are allowable. Auditor?s Recommendation: SFRC should implement a process of comparing actual time and effort of employees to SFRC?s budget estimates at least bi-annually. Alternatively, SFRC could require employees to report their actual daily time on federal awards to ensure amounts charged are accurate and properly allocated. Additionally, SFRC should implement a review process of reimbursement requests to ensure that disbursements agree with source documentation. Management?s Response: Management is implementing a job/cost time and labor system as part of the current Paylocity system currently in place. This new time tracking system will allow individuals working directly on contracts to record time spent on grants on their individual weekly timecards. This system will allow management to report time spent by person by contract within our current payroll and financial system. This enhancement will not be in place until January 2023. In the meantime, management has formalized a quarterly manual review process to document actual time spent per employee per contract along with any needed adjustments to allocation percentages.
FINDING 2022-001 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, COVID-19 - School Breakfast Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 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 40 food service program disbursements were selected for testing. Across four contracted vendors, there were 12 disbursements that had items purchased that were not charged in accordance with contracted prices. An additional 9 disbursements, from a single vendor, did not have supporting documentation to determine if the amount charged per the invoices agreed to the initial bid pricing documentation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, cost 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 control 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 have resulted in the loss of 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 control 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 2022-001 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, COVID-19 - School Breakfast Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 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 40 food service program disbursements were selected for testing. Across four contracted vendors, there were 12 disbursements that had items purchased that were not charged in accordance with contracted prices. An additional 9 disbursements, from a single vendor, did not have supporting documentation to determine if the amount charged per the invoices agreed to the initial bid pricing documentation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, cost 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 control 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 have resulted in the loss of 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 control 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 2022-001 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, COVID-19 - School Breakfast Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 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 40 food service program disbursements were selected for testing. Across four contracted vendors, there were 12 disbursements that had items purchased that were not charged in accordance with contracted prices. An additional 9 disbursements, from a single vendor, did not have supporting documentation to determine if the amount charged per the invoices agreed to the initial bid pricing documentation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, cost 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 control 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 have resulted in the loss of 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 control 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 2022-001 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, COVID-19 - School Breakfast Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 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 40 food service program disbursements were selected for testing. Across four contracted vendors, there were 12 disbursements that had items purchased that were not charged in accordance with contracted prices. An additional 9 disbursements, from a single vendor, did not have supporting documentation to determine if the amount charged per the invoices agreed to the initial bid pricing documentation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, cost 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 control 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 have resulted in the loss of 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 control 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 2022-001 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, COVID-19 - School Breakfast Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 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 40 food service program disbursements were selected for testing. Across four contracted vendors, there were 12 disbursements that had items purchased that were not charged in accordance with contracted prices. An additional 9 disbursements, from a single vendor, did not have supporting documentation to determine if the amount charged per the invoices agreed to the initial bid pricing documentation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, cost 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 control 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 have resulted in the loss of 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 control 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 2022-001 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, COVID-19 - School Breakfast Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 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 40 food service program disbursements were selected for testing. Across four contracted vendors, there were 12 disbursements that had items purchased that were not charged in accordance with contracted prices. An additional 9 disbursements, from a single vendor, did not have supporting documentation to determine if the amount charged per the invoices agreed to the initial bid pricing documentation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, cost 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 control 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 have resulted in the loss of 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 control 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 2022-001 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, COVID-19 - School Breakfast Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 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 40 food service program disbursements were selected for testing. Across four contracted vendors, there were 12 disbursements that had items purchased that were not charged in accordance with contracted prices. An additional 9 disbursements, from a single vendor, did not have supporting documentation to determine if the amount charged per the invoices agreed to the initial bid pricing documentation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, cost 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 control 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 have resulted in the loss of 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 control 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 2022-001 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, COVID-19 - School Breakfast Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 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 40 food service program disbursements were selected for testing. Across four contracted vendors, there were 12 disbursements that had items purchased that were not charged in accordance with contracted prices. An additional 9 disbursements, from a single vendor, did not have supporting documentation to determine if the amount charged per the invoices agreed to the initial bid pricing documentation. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, cost 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 control 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 have resulted in the loss of 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 control 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: 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): 19611-127-PN01, 20611-127-PN01, 19619-127-PN01, 20619-127-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit. The prior audit finding number was 2020-010. 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 Matching, Level of Effort, Earmarking compliance requirement. Proportionate share is an amount of funds that must be expended on special education/related services for parentally-placed private school and homeschooled students. The amount to be spent is automatically calculated within each grant application. The School Corporation had not designed, nor implemented policies and procedures to ensure that the required level of expenditures for non-public students was met for each grant. The School Corporation failed to maintain records of actual time spent providing services to the participating nonpublic schools for Non-Public Proportionate Share expenditures for the 19611-127-PN01, 19619-127-PN01, 20611-127-PN01, and 20619-127-PN01 grant awards. The salaries reported as expended for the nonpublic school expenditures were based on an estimate of time instead of actual time spent. As such, we could not verify that the minimum amount per grant award was expended. The lack of internal controls and noncompliance were isolated to the 19611-127-PN01, 19619-127-PN01, 20611-127-PN01, and 20619-127-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 awards. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." Cause Management had not developed a system of internal control that would have ensured compliance with the grant agreement and 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 internal controls, as well as appropriately document and identify federal award expenditures, to ensure compliance with the grant agreement and 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 2022-005 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): 19611-127-PN01, 20611-127-PN01, 19619-127-PN01, 20619-127-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit. The prior audit finding number was 2020-010. 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 Matching, Level of Effort, Earmarking compliance requirement. Proportionate share is an amount of funds that must be expended on special education/related services for parentally-placed private school and homeschooled students. The amount to be spent is automatically calculated within each grant application. The School Corporation had not designed, nor implemented policies and procedures to ensure that the required level of expenditures for non-public students was met for each grant. The School Corporation failed to maintain records of actual time spent providing services to the participating nonpublic schools for Non-Public Proportionate Share expenditures for the 19611-127-PN01, 19619-127-PN01, 20611-127-PN01, and 20619-127-PN01 grant awards. The salaries reported as expended for the nonpublic school expenditures were based on an estimate of time instead of actual time spent. As such, we could not verify that the minimum amount per grant award was expended. The lack of internal controls and noncompliance were isolated to the 19611-127-PN01, 19619-127-PN01, 20611-127-PN01, and 20619-127-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 awards. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." Cause Management had not developed a system of internal control that would have ensured compliance with the grant agreement and 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 internal controls, as well as appropriately document and identify federal award expenditures, to ensure compliance with the grant agreement and 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 2022-005 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): 19611-127-PN01, 20611-127-PN01, 19619-127-PN01, 20619-127-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit. The prior audit finding number was 2020-010. 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 Matching, Level of Effort, Earmarking compliance requirement. Proportionate share is an amount of funds that must be expended on special education/related services for parentally-placed private school and homeschooled students. The amount to be spent is automatically calculated within each grant application. The School Corporation had not designed, nor implemented policies and procedures to ensure that the required level of expenditures for non-public students was met for each grant. The School Corporation failed to maintain records of actual time spent providing services to the participating nonpublic schools for Non-Public Proportionate Share expenditures for the 19611-127-PN01, 19619-127-PN01, 20611-127-PN01, and 20619-127-PN01 grant awards. The salaries reported as expended for the nonpublic school expenditures were based on an estimate of time instead of actual time spent. As such, we could not verify that the minimum amount per grant award was expended. The lack of internal controls and noncompliance were isolated to the 19611-127-PN01, 19619-127-PN01, 20611-127-PN01, and 20619-127-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 awards. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." Cause Management had not developed a system of internal control that would have ensured compliance with the grant agreement and 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 internal controls, as well as appropriately document and identify federal award expenditures, to ensure compliance with the grant agreement and 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 2022-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles, Special Tests & Provisions ? Non-Profit School Food Service Accounts 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 Assistance Listing Numbers: 10.533, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): SY 2020/2021, SY 2021/2022 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Allowable Cost/Cost Principles, Special Tests & Provisions ? Non-Profit School Food Service Accounts Audit Findings: Material Weakness, Other Matters 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 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: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . (g) Be adequately documented. . . . " 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; FINDING 2022-002 (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (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. . . ." 34 CFR 76.730 states: "A State and a subgrantee shall keep records that fully show: (a) The amount of funds under the grant or subgrant; (b) How the State or subgrantee uses the funds; (c) The total cost of the project; (d) The share of that cost provided from other sources; and (e) Other records to facilitate an effective audit." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." 7 CFR 220.7(e) states in part: ?. . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) . . . . (ii) . . .use all revenues received by such food service only for the operation or improvement of that food service. . . ? 7 CFR 210.14(a) states: ?Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under ?210.19(a) of this part. . . . ? Condition: 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 and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements. Cause: Management had not developed a system of internal controls that would have ensured compliance with the Allowable Costs/Cost Principles and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements. Context: The School Corporation did not have effective controls in place to ensure that only applicable employees were paid from program funds. Six of the 24 employees? time charged to the program, did not have adequate documentation to support their wage allocations. The School Corporation paid a portion of the wages for three Elementary School Teachers, two Elementary Instructional Assistants, and one Library Aide from the School Lunch Fund based on fixed percentages. There was no supporting documentation to indicate how the percentages were determined. Wages and benefits charged to the program for the above noted employees totaled $19,073. This amount was considered questions costs. Effect: The failure to establish an effective internal control system by the School Corporation enabled noncompliance with the grant agreement and the Allowable Costs/Cost Principles and Special Tests & Provisions - School Food Service Accounts compliance requirements. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements could result in the loss of federal funds to the School Corporation. Questioned Costs: $19,073. Identification as a repeat finding, if applicable: No Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and the Allowable Costs/Cost Principles and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles, Special Tests & Provisions ? Non-Profit School Food Service Accounts 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 Assistance Listing Numbers: 10.533, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): SY 2020/2021, SY 2021/2022 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Allowable Cost/Cost Principles, Special Tests & Provisions ? Non-Profit School Food Service Accounts Audit Findings: Material Weakness, Other Matters 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 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: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . (g) Be adequately documented. . . . " 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; FINDING 2022-002 (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (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. . . ." 34 CFR 76.730 states: "A State and a subgrantee shall keep records that fully show: (a) The amount of funds under the grant or subgrant; (b) How the State or subgrantee uses the funds; (c) The total cost of the project; (d) The share of that cost provided from other sources; and (e) Other records to facilitate an effective audit." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." 7 CFR 220.7(e) states in part: ?. . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) . . . . (ii) . . .use all revenues received by such food service only for the operation or improvement of that food service. . . ? 7 CFR 210.14(a) states: ?Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under ?210.19(a) of this part. . . . ? Condition: 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 and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements. Cause: Management had not developed a system of internal controls that would have ensured compliance with the Allowable Costs/Cost Principles and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements. Context: The School Corporation did not have effective controls in place to ensure that only applicable employees were paid from program funds. Six of the 24 employees? time charged to the program, did not have adequate documentation to support their wage allocations. The School Corporation paid a portion of the wages for three Elementary School Teachers, two Elementary Instructional Assistants, and one Library Aide from the School Lunch Fund based on fixed percentages. There was no supporting documentation to indicate how the percentages were determined. Wages and benefits charged to the program for the above noted employees totaled $19,073. This amount was considered questions costs. Effect: The failure to establish an effective internal control system by the School Corporation enabled noncompliance with the grant agreement and the Allowable Costs/Cost Principles and Special Tests & Provisions - School Food Service Accounts compliance requirements. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements could result in the loss of federal funds to the School Corporation. Questioned Costs: $19,073. Identification as a repeat finding, if applicable: No Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and the Allowable Costs/Cost Principles and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles, Special Tests & Provisions ? Non-Profit School Food Service Accounts 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 Assistance Listing Numbers: 10.533, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): SY 2020/2021, SY 2021/2022 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Allowable Cost/Cost Principles, Special Tests & Provisions ? Non-Profit School Food Service Accounts Audit Findings: Material Weakness, Other Matters 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 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: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . (g) Be adequately documented. . . . " 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; FINDING 2022-002 (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (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. . . ." 34 CFR 76.730 states: "A State and a subgrantee shall keep records that fully show: (a) The amount of funds under the grant or subgrant; (b) How the State or subgrantee uses the funds; (c) The total cost of the project; (d) The share of that cost provided from other sources; and (e) Other records to facilitate an effective audit." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." 7 CFR 220.7(e) states in part: ?. . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) . . . . (ii) . . .use all revenues received by such food service only for the operation or improvement of that food service. . . ? 7 CFR 210.14(a) states: ?Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under ?210.19(a) of this part. . . . ? Condition: 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 and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements. Cause: Management had not developed a system of internal controls that would have ensured compliance with the Allowable Costs/Cost Principles and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements. Context: The School Corporation did not have effective controls in place to ensure that only applicable employees were paid from program funds. Six of the 24 employees? time charged to the program, did not have adequate documentation to support their wage allocations. The School Corporation paid a portion of the wages for three Elementary School Teachers, two Elementary Instructional Assistants, and one Library Aide from the School Lunch Fund based on fixed percentages. There was no supporting documentation to indicate how the percentages were determined. Wages and benefits charged to the program for the above noted employees totaled $19,073. This amount was considered questions costs. Effect: The failure to establish an effective internal control system by the School Corporation enabled noncompliance with the grant agreement and the Allowable Costs/Cost Principles and Special Tests & Provisions - School Food Service Accounts compliance requirements. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements could result in the loss of federal funds to the School Corporation. Questioned Costs: $19,073. Identification as a repeat finding, if applicable: No Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and the Allowable Costs/Cost Principles and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2022-004 Information on the federal program: Subject: Special Education Cluster ? Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listing Number: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 19611-007-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, 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 and Context: The School Corporation is a member of the Daviess-Martin Special Education Cooperative (Cooperative). During fiscal year 2020-2021, the Cooperative operated the special education programs and spent the federal money on behalf of all its member schools. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, 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 school 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 the 19611-007-PN01 grant award could not be verified for the individual member schools. Total grant expenditures were posted as expended. The nonpublic proportionate share expenditures were then determined by applying the budgeted percentage for non-public school expenditures to the total expenditures. These were the amounts reported to IDOE. As such, we were unable to identify if the minimum amount per the grant awards was expended and properly reported to IDOE as required. The lack of internal controls and noncompliance was isolated to the 19611-007-PN01 grant award. Questioned Costs: There were no questioned costs identified. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreements and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. 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. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management establish an effective 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 2022-004 Information on the federal program: Subject: Special Education Cluster ? Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listing Number: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 19611-007-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, 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 and Context: The School Corporation is a member of the Daviess-Martin Special Education Cooperative (Cooperative). During fiscal year 2020-2021, the Cooperative operated the special education programs and spent the federal money on behalf of all its member schools. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, 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 school 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 the 19611-007-PN01 grant award could not be verified for the individual member schools. Total grant expenditures were posted as expended. The nonpublic proportionate share expenditures were then determined by applying the budgeted percentage for non-public school expenditures to the total expenditures. These were the amounts reported to IDOE. As such, we were unable to identify if the minimum amount per the grant awards was expended and properly reported to IDOE as required. The lack of internal controls and noncompliance was isolated to the 19611-007-PN01 grant award. Questioned Costs: There were no questioned costs identified. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreements and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. 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. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management establish an effective 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 2022-004 Information on the federal program: Subject: Special Education Cluster ? Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listing Number: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 19611-007-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, 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 and Context: The School Corporation is a member of the Daviess-Martin Special Education Cooperative (Cooperative). During fiscal year 2020-2021, the Cooperative operated the special education programs and spent the federal money on behalf of all its member schools. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, 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 school 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 the 19611-007-PN01 grant award could not be verified for the individual member schools. Total grant expenditures were posted as expended. The nonpublic proportionate share expenditures were then determined by applying the budgeted percentage for non-public school expenditures to the total expenditures. These were the amounts reported to IDOE. As such, we were unable to identify if the minimum amount per the grant awards was expended and properly reported to IDOE as required. The lack of internal controls and noncompliance was isolated to the 19611-007-PN01 grant award. Questioned Costs: There were no questioned costs identified. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreements and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. 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. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management establish an effective 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 2022-004 Information on the federal program: Subject: Special Education Cluster ? Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listing Number: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 19611-007-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, 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 and Context: The School Corporation is a member of the Daviess-Martin Special Education Cooperative (Cooperative). During fiscal year 2020-2021, the Cooperative operated the special education programs and spent the federal money on behalf of all its member schools. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, 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 school 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 the 19611-007-PN01 grant award could not be verified for the individual member schools. Total grant expenditures were posted as expended. The nonpublic proportionate share expenditures were then determined by applying the budgeted percentage for non-public school expenditures to the total expenditures. These were the amounts reported to IDOE. As such, we were unable to identify if the minimum amount per the grant awards was expended and properly reported to IDOE as required. The lack of internal controls and noncompliance was isolated to the 19611-007-PN01 grant award. Questioned Costs: There were no questioned costs identified. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreements and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. 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. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management establish an effective 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 2022-004 Information on the federal program: Subject: Special Education Cluster ? Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listing Number: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 19611-007-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, 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 and Context: The School Corporation is a member of the Daviess-Martin Special Education Cooperative (Cooperative). During fiscal year 2020-2021, the Cooperative operated the special education programs and spent the federal money on behalf of all its member schools. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, 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 school 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 the 19611-007-PN01 grant award could not be verified for the individual member schools. Total grant expenditures were posted as expended. The nonpublic proportionate share expenditures were then determined by applying the budgeted percentage for non-public school expenditures to the total expenditures. These were the amounts reported to IDOE. As such, we were unable to identify if the minimum amount per the grant awards was expended and properly reported to IDOE as required. The lack of internal controls and noncompliance was isolated to the 19611-007-PN01 grant award. Questioned Costs: There were no questioned costs identified. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreements and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. 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. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management establish an effective 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 2022-004 Information on the federal program: Subject: Special Education Cluster ? Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listing Number: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 19611-007-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, 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 and Context: The School Corporation is a member of the Daviess-Martin Special Education Cooperative (Cooperative). During fiscal year 2020-2021, the Cooperative operated the special education programs and spent the federal money on behalf of all its member schools. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, 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 school 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 the 19611-007-PN01 grant award could not be verified for the individual member schools. Total grant expenditures were posted as expended. The nonpublic proportionate share expenditures were then determined by applying the budgeted percentage for non-public school expenditures to the total expenditures. These were the amounts reported to IDOE. As such, we were unable to identify if the minimum amount per the grant awards was expended and properly reported to IDOE as required. The lack of internal controls and noncompliance was isolated to the 19611-007-PN01 grant award. Questioned Costs: There were no questioned costs identified. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreements and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. 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. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management establish an effective 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 2022-004 Subject: Child Nutrition Cluster ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, After School Snack Program, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness 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. . . . (g) Be adequately documented. . . . 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE?s definition of IBS); . . . . (iv) 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 a non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which allocated using different allocation bases; or an unallowable activity and a direct or indirect costs activity. . . .? Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with the requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Cause: The School Corporation's management had not designed or implemented internal controls which would have ensured compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system could enable material noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirements listed above could have resulted in the loss of funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had not designed or implemented adequate internal controls to ensure that payroll disbursements were only for food service-related services. Payroll disbursements comprise approximately 45% of the program costs charged to the Child Nutrition Cluster. One employee was responsible for processing payroll. Payroll reports were submitted to the School Board and Treasurer for review and approval; however, the reports only provided a total gross amount paid from each fund. The reports did not list the employees who were paid from the fund. In March 2021, the Treasurer implemented a review of the payroll distribution report, which is broken out by fund and individual employee. The lack of controls related to payroll disbursements was isolated to the 2020-21 year. Additionally, payroll disbursements for custodial employees were allocated to the Child Nutrition Cluster based on a percentage of the custodial employees? salaries. However, there were no time and effort logs or other documentation maintained to support the percentage of the custodial salaries allocated to the Child Nutrition Cluster. The custodial salaries make up approximately 3% of the total payroll disbursements charged to the Child Nutrition Cluster. This was an issue throughout the audit period. Identification as a repeat finding, if applicable: Yes, see Finding 2020-004 Recommendation: We recommended that management continue to document controls surrounding payroll disbursement through review of the payroll distribution report each pay period. Additionally, we recommended that the School maintain written documentation supporting the portion of salaries paid from the School Lunch fund for custodial personnel. Views of Responsible Officials: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-004 Subject: Child Nutrition Cluster ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, After School Snack Program, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness 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. . . . (g) Be adequately documented. . . . 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE?s definition of IBS); . . . . (iv) 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 a non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which allocated using different allocation bases; or an unallowable activity and a direct or indirect costs activity. . . .? Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with the requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Cause: The School Corporation's management had not designed or implemented internal controls which would have ensured compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system could enable material noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirements listed above could have resulted in the loss of funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had not designed or implemented adequate internal controls to ensure that payroll disbursements were only for food service-related services. Payroll disbursements comprise approximately 45% of the program costs charged to the Child Nutrition Cluster. One employee was responsible for processing payroll. Payroll reports were submitted to the School Board and Treasurer for review and approval; however, the reports only provided a total gross amount paid from each fund. The reports did not list the employees who were paid from the fund. In March 2021, the Treasurer implemented a review of the payroll distribution report, which is broken out by fund and individual employee. The lack of controls related to payroll disbursements was isolated to the 2020-21 year. Additionally, payroll disbursements for custodial employees were allocated to the Child Nutrition Cluster based on a percentage of the custodial employees? salaries. However, there were no time and effort logs or other documentation maintained to support the percentage of the custodial salaries allocated to the Child Nutrition Cluster. The custodial salaries make up approximately 3% of the total payroll disbursements charged to the Child Nutrition Cluster. This was an issue throughout the audit period. Identification as a repeat finding, if applicable: Yes, see Finding 2020-004 Recommendation: We recommended that management continue to document controls surrounding payroll disbursement through review of the payroll distribution report each pay period. Additionally, we recommended that the School maintain written documentation supporting the portion of salaries paid from the School Lunch fund for custodial personnel. Views of Responsible Officials: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-004 Subject: Child Nutrition Cluster ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, After School Snack Program, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness 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. . . . (g) Be adequately documented. . . . 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE?s definition of IBS); . . . . (iv) 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 a non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which allocated using different allocation bases; or an unallowable activity and a direct or indirect costs activity. . . .? Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with the requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Cause: The School Corporation's management had not designed or implemented internal controls which would have ensured compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system could enable material noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirements listed above could have resulted in the loss of funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had not designed or implemented adequate internal controls to ensure that payroll disbursements were only for food service-related services. Payroll disbursements comprise approximately 45% of the program costs charged to the Child Nutrition Cluster. One employee was responsible for processing payroll. Payroll reports were submitted to the School Board and Treasurer for review and approval; however, the reports only provided a total gross amount paid from each fund. The reports did not list the employees who were paid from the fund. In March 2021, the Treasurer implemented a review of the payroll distribution report, which is broken out by fund and individual employee. The lack of controls related to payroll disbursements was isolated to the 2020-21 year. Additionally, payroll disbursements for custodial employees were allocated to the Child Nutrition Cluster based on a percentage of the custodial employees? salaries. However, there were no time and effort logs or other documentation maintained to support the percentage of the custodial salaries allocated to the Child Nutrition Cluster. The custodial salaries make up approximately 3% of the total payroll disbursements charged to the Child Nutrition Cluster. This was an issue throughout the audit period. Identification as a repeat finding, if applicable: Yes, see Finding 2020-004 Recommendation: We recommended that management continue to document controls surrounding payroll disbursement through review of the payroll distribution report each pay period. Additionally, we recommended that the School maintain written documentation supporting the portion of salaries paid from the School Lunch fund for custodial personnel. Views of Responsible Officials: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-004 Subject: Child Nutrition Cluster ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, After School Snack Program, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness 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. . . . (g) Be adequately documented. . . . 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE?s definition of IBS); . . . . (iv) 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 a non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which allocated using different allocation bases; or an unallowable activity and a direct or indirect costs activity. . . .? Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with the requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Cause: The School Corporation's management had not designed or implemented internal controls which would have ensured compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system could enable material noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirements listed above could have resulted in the loss of funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had not designed or implemented adequate internal controls to ensure that payroll disbursements were only for food service-related services. Payroll disbursements comprise approximately 45% of the program costs charged to the Child Nutrition Cluster. One employee was responsible for processing payroll. Payroll reports were submitted to the School Board and Treasurer for review and approval; however, the reports only provided a total gross amount paid from each fund. The reports did not list the employees who were paid from the fund. In March 2021, the Treasurer implemented a review of the payroll distribution report, which is broken out by fund and individual employee. The lack of controls related to payroll disbursements was isolated to the 2020-21 year. Additionally, payroll disbursements for custodial employees were allocated to the Child Nutrition Cluster based on a percentage of the custodial employees? salaries. However, there were no time and effort logs or other documentation maintained to support the percentage of the custodial salaries allocated to the Child Nutrition Cluster. The custodial salaries make up approximately 3% of the total payroll disbursements charged to the Child Nutrition Cluster. This was an issue throughout the audit period. Identification as a repeat finding, if applicable: Yes, see Finding 2020-004 Recommendation: We recommended that management continue to document controls surrounding payroll disbursement through review of the payroll distribution report each pay period. Additionally, we recommended that the School maintain written documentation supporting the portion of salaries paid from the School Lunch fund for custodial personnel. Views of Responsible Officials: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-008 Subject: Special Education Cluster (IDEA) ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listing Number: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 20611-109-PN01, 21611-109-PN01, 21619-109-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (c) 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: (e) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (f) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (i) Be adequately documented. . . . Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with the requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Cause: The School Corporation's management had not designed or implemented internal controls which would have ensured compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system could enable material noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirements listed above could have resulted in the loss of funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had not properly designed or implemented internal controls over recording transactions for payroll and fringe benefit disbursements to ensure the accuracy and classification of the payroll disbursements. Payroll disbursements make up 100% of the program costs charged to the Special Education grants. One employee was responsible for processing payroll. Payroll reports were submitted to the School Board and Treasurer for review and approval; however, the reports only provided a total gross amount paid from each fund. The reports did not list the employees who were paid from the fund. In March 2021, the Treasurer implemented a review of the payroll distribution report by fund and individual employee. The lack of controls related to payroll disbursements was isolated to the 2020-2021 year. Identification as a repeat finding, if applicable: Yes, see Finding 2020-006 Recommendation: We recommended management continue to document controls surrounding payroll disbursement through review of the payroll distribution report each pay period. Views of Responsible Officials: Management agrees with the finding and has implemented their corrective action plan.
FINDING 2022-008 Subject: Special Education Cluster (IDEA) ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listing Number: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 20611-109-PN01, 21611-109-PN01, 21619-109-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (c) 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: (e) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (f) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (i) Be adequately documented. . . . Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with the requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Cause: The School Corporation's management had not designed or implemented internal controls which would have ensured compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system could enable material noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirements listed above could have resulted in the loss of funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had not properly designed or implemented internal controls over recording transactions for payroll and fringe benefit disbursements to ensure the accuracy and classification of the payroll disbursements. Payroll disbursements make up 100% of the program costs charged to the Special Education grants. One employee was responsible for processing payroll. Payroll reports were submitted to the School Board and Treasurer for review and approval; however, the reports only provided a total gross amount paid from each fund. The reports did not list the employees who were paid from the fund. In March 2021, the Treasurer implemented a review of the payroll distribution report by fund and individual employee. The lack of controls related to payroll disbursements was isolated to the 2020-2021 year. Identification as a repeat finding, if applicable: Yes, see Finding 2020-006 Recommendation: We recommended management continue to document controls surrounding payroll disbursement through review of the payroll distribution report each pay period. Views of Responsible Officials: Management agrees with the finding and has implemented their corrective action plan.
FINDING 2022-008 Subject: Special Education Cluster (IDEA) ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listing Number: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 20611-109-PN01, 21611-109-PN01, 21619-109-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (c) 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: (e) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (f) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (i) Be adequately documented. . . . Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with the requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Cause: The School Corporation's management had not designed or implemented internal controls which would have ensured compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system could enable material noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirements listed above could have resulted in the loss of funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had not properly designed or implemented internal controls over recording transactions for payroll and fringe benefit disbursements to ensure the accuracy and classification of the payroll disbursements. Payroll disbursements make up 100% of the program costs charged to the Special Education grants. One employee was responsible for processing payroll. Payroll reports were submitted to the School Board and Treasurer for review and approval; however, the reports only provided a total gross amount paid from each fund. The reports did not list the employees who were paid from the fund. In March 2021, the Treasurer implemented a review of the payroll distribution report by fund and individual employee. The lack of controls related to payroll disbursements was isolated to the 2020-2021 year. Identification as a repeat finding, if applicable: Yes, see Finding 2020-006 Recommendation: We recommended management continue to document controls surrounding payroll disbursement through review of the payroll distribution report each pay period. Views of Responsible Officials: Management agrees with the finding and has implemented their corrective action plan.
FINDING 2022-005 Subject: COVID-19 ? Education Stabilization Fund ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 ? Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Material Noncompliance Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (b) 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: (c) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (d) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (h) Be adequately documented. . . . Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with the requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Cause: (a) The School Corporation planned to utilize a portion of the grant funds for chiller repairs and included the costs in the award budget. The School Corporation subsequently also received insurance proceeds for a portion of the repair costs. (b) The School Corporation's management had not designed or implemented internal controls over payroll disbursements which would have ensured compliance with the compliance requirements listed above. Effect: (a) The School Corporation received a grant payment for expenses that were subsequently also recovered from insurance proceeds. Therefore, the school has overdrawn ARP ESSER funds by that amount. Noncompliance with the grant agreement and the compliance requirements could result in the future loss of funds to the School Corporation. (b) The failure to establish an effective internal control system over payroll disbursements could enable material noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirements listed above could have resulted in the loss of funds to the School Corporation. Questioned Costs: Known questioned costs of $106,755 were identified. Context: (a) During allowable cost testing for vendor disbursements, we noted a portion of ARP ESSER funds were utilized to repair the chiller at the middle and high schools. The School Corporation incurred a total of approximately $284,000 in chiller repair costs between September 2021 and May 2022 and requested reimbursement for those expenditures from ARP ESSER funds in full. In October 2021, the School Corporation received an insurance claim check in the amount of $106,755 to cover a portion of the repair costs. The School Corporation did not deduct the amount received through insurance from the amount requested for reimbursement from federal funds, resulting in an overpayment of federal funds during the audit period. (b) Additionally, the School Corporation had not properly designed or implemented internal controls over recording transactions for payroll and fringe benefit disbursements to ensure the accuracy and classification of the payroll disbursements. Payroll disbursements make up approximately 45% of the program costs charged to the Education Stabilization Fund. One employee was responsible for processing payroll. Payroll reports were submitted to the School Board and Treasurer for review and approval; however, the reports only provided a total gross amount paid from each fund. The reports did not list the employees who were paid from the fund. In March 2021, the Treasurer implemented a review of the payroll distribution report, which is broken out by fund and individual employee. The lack of controls related to payroll disbursements was isolated to the 2020-2021 year. Identification as a repeat finding, if applicable: No Recommendation: (a) We recommend management ensure any insurance proceeds or non-federal sources of funding are applied first to costs incurred before charging the costs to federal awards. (b) We recommend management continue to document controls surrounding payroll disbursement through review of the payroll distribution report each pay period. Views of Responsible Officials: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-005 Subject: COVID-19 ? Education Stabilization Fund ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 ? Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Material Noncompliance Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (b) 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: (c) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (d) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (h) Be adequately documented. . . . Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with the requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Cause: (a) The School Corporation planned to utilize a portion of the grant funds for chiller repairs and included the costs in the award budget. The School Corporation subsequently also received insurance proceeds for a portion of the repair costs. (b) The School Corporation's management had not designed or implemented internal controls over payroll disbursements which would have ensured compliance with the compliance requirements listed above. Effect: (a) The School Corporation received a grant payment for expenses that were subsequently also recovered from insurance proceeds. Therefore, the school has overdrawn ARP ESSER funds by that amount. Noncompliance with the grant agreement and the compliance requirements could result in the future loss of funds to the School Corporation. (b) The failure to establish an effective internal control system over payroll disbursements could enable material noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirements listed above could have resulted in the loss of funds to the School Corporation. Questioned Costs: Known questioned costs of $106,755 were identified. Context: (a) During allowable cost testing for vendor disbursements, we noted a portion of ARP ESSER funds were utilized to repair the chiller at the middle and high schools. The School Corporation incurred a total of approximately $284,000 in chiller repair costs between September 2021 and May 2022 and requested reimbursement for those expenditures from ARP ESSER funds in full. In October 2021, the School Corporation received an insurance claim check in the amount of $106,755 to cover a portion of the repair costs. The School Corporation did not deduct the amount received through insurance from the amount requested for reimbursement from federal funds, resulting in an overpayment of federal funds during the audit period. (b) Additionally, the School Corporation had not properly designed or implemented internal controls over recording transactions for payroll and fringe benefit disbursements to ensure the accuracy and classification of the payroll disbursements. Payroll disbursements make up approximately 45% of the program costs charged to the Education Stabilization Fund. One employee was responsible for processing payroll. Payroll reports were submitted to the School Board and Treasurer for review and approval; however, the reports only provided a total gross amount paid from each fund. The reports did not list the employees who were paid from the fund. In March 2021, the Treasurer implemented a review of the payroll distribution report, which is broken out by fund and individual employee. The lack of controls related to payroll disbursements was isolated to the 2020-2021 year. Identification as a repeat finding, if applicable: No Recommendation: (a) We recommend management ensure any insurance proceeds or non-federal sources of funding are applied first to costs incurred before charging the costs to federal awards. (b) We recommend management continue to document controls surrounding payroll disbursement through review of the payroll distribution report each pay period. Views of Responsible Officials: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-005 Subject: COVID-19 ? Education Stabilization Fund ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 ? Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Material Noncompliance Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (b) 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: (c) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (d) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (h) Be adequately documented. . . . Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with the requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Cause: (a) The School Corporation planned to utilize a portion of the grant funds for chiller repairs and included the costs in the award budget. The School Corporation subsequently also received insurance proceeds for a portion of the repair costs. (b) The School Corporation's management had not designed or implemented internal controls over payroll disbursements which would have ensured compliance with the compliance requirements listed above. Effect: (a) The School Corporation received a grant payment for expenses that were subsequently also recovered from insurance proceeds. Therefore, the school has overdrawn ARP ESSER funds by that amount. Noncompliance with the grant agreement and the compliance requirements could result in the future loss of funds to the School Corporation. (b) The failure to establish an effective internal control system over payroll disbursements could enable material noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirements listed above could have resulted in the loss of funds to the School Corporation. Questioned Costs: Known questioned costs of $106,755 were identified. Context: (a) During allowable cost testing for vendor disbursements, we noted a portion of ARP ESSER funds were utilized to repair the chiller at the middle and high schools. The School Corporation incurred a total of approximately $284,000 in chiller repair costs between September 2021 and May 2022 and requested reimbursement for those expenditures from ARP ESSER funds in full. In October 2021, the School Corporation received an insurance claim check in the amount of $106,755 to cover a portion of the repair costs. The School Corporation did not deduct the amount received through insurance from the amount requested for reimbursement from federal funds, resulting in an overpayment of federal funds during the audit period. (b) Additionally, the School Corporation had not properly designed or implemented internal controls over recording transactions for payroll and fringe benefit disbursements to ensure the accuracy and classification of the payroll disbursements. Payroll disbursements make up approximately 45% of the program costs charged to the Education Stabilization Fund. One employee was responsible for processing payroll. Payroll reports were submitted to the School Board and Treasurer for review and approval; however, the reports only provided a total gross amount paid from each fund. The reports did not list the employees who were paid from the fund. In March 2021, the Treasurer implemented a review of the payroll distribution report, which is broken out by fund and individual employee. The lack of controls related to payroll disbursements was isolated to the 2020-2021 year. Identification as a repeat finding, if applicable: No Recommendation: (a) We recommend management ensure any insurance proceeds or non-federal sources of funding are applied first to costs incurred before charging the costs to federal awards. (b) We recommend management continue to document controls surrounding payroll disbursement through review of the payroll distribution report each pay period. Views of Responsible Officials: Management agrees with the finding and has prepared a corrective action plan.
FA 2022-002 Improve Controls over Indirect Costs Compliance Requirements: Activities Allowed/Unallowed Allowable Costs/Cost Principles 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 Numbers and Titles: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund COVID-19 ? 84.425U ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021) Questioned Costs: $559,442.53 Description: The School District charged indirect cost expenditures to the Elementary and Secondary School Emergency Relief Fund program in excess of the maximum amount allowed. 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 $199,433,680.30 were expended and reported on the DeKalb 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. Additionally, 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, (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?? To assist school districts in improving their financial management systems and associated compliance over federal programs, GaDOE published the Financial Management for Georgia Local Units of Administration (FMGLUA) manual. The FMGLUA manual requires that LEAs exclude certain costs in the calculation of the net expenditures to which the approved indirect cost rate can be applied, including the cost of capitalizable assets, rental costs, tuition remission, scholarships and fellowships, payments to charter schools, and subawards in excess of $25,000. Condition: A review of the School District?s accounting records and supporting documentation revealed that costs associated with capitalizable equipment, payments to charter schools, and rental costs were not appropriately deducted in the calculation of the net expenditures to which the approved unrestricted indirect cost rate was applied. Therefore, the School District claimed an additional $559,442.53 in indirect costs beyond the maximum indirect cost amount allowed. Questioned Costs: Known questioned costs of $559,442.53 were identified for excess indirect cost expenditures claimed. 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: In discussing these deficiencies with management, they stated that inadequate controls over decentralized activity input led to the School District?s failure to establish appropriate internal control procedures over recording ledger activity. Effect: The School District is not in compliance with the Uniform Guidance or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate indirect cost amounts are charged to the ESSER program may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with these unallowable expenditures. Recommendation: The School District should revise current internal control procedures related to the ESSER program. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that ledger activity is recorded accurately. In addition, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.
Finding 2022-009: Period of Performance: payroll costs Repeat Finding Yes (2021-007) Federal Program Title: U.S. Department of Justice Passed through Illinois Criminal Justice Information Authority 16.575; Crime Victim Assistance Award Year Award# 220040: June 1, 2022 ? November 30, 2023 Criteria: Article 1.4 of the Illinois Criminal Justice Information Authority grant agreement states that the term of the agreement is determined as the period between June 1, 2022 to November 30, 2023 for grant #220040. CFR 200.403 requires that costs must be incurred during the grant period of the Federal award. Condition: There were 22 instances of expenses that were submitted for reimbursement that fell outside the allowable grant period . Cause: Due to turnover in upper financial management, program oversight was not performed timely. Effect: Costs submitted for reimbursement outside of the allowable grant period are considered unallowable under Article 1.4. Questioned costs: The total expenditures requested for reimbursement outside the period of performance was $8,686. Context: Out of 120 selections, there were 22 selections that were charged to the grant outside the grant period, all of which were payroll costs. Recommendation: We recommend that management review the period of performance of the grant agreement in conjunction with the review of each expense to ensure that the expense occurred during the allowed grant period. Views of responsible officials: Management agrees with this finding. Please see corrective action plan attached.
Reference Number: 2022-018 Prior Year Finding: 2021-014 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program (CHIP) Assistance Listing Number: 93.767 Award Number and Year: 2205DE5021 (10/1/2021 ? 9/30/2023) Compliance Requirement: Period of Performance Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance 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. Further, the Division was unable to provide support for a transaction selected for testing. Context: Eighteen transactions were selected for testing, and we noted the following exceptions: ? Six of eighteen transactions were charged before the allowable period of performance. ? For one of eighteen transactions, the Division was unable to provide supporting documentation and compliance with period of performance could not be verified. Questioned costs: $44,567 represents transactions unsupported or incurred and charged prior to the award?s allowable period of performance. Cause: The Division did not enhance their internal controls and procedures to ensure that expenditures charged to the program were incurred within the award?s period of performance nor that it maintained supporting documentation for expenditures charged to the award. Effect: Costs could be deemed unallowable by the awarding agency if funds are expended outside of the allowable period of performance. Recommendation: The Division should review and enhance internal controls and procedures to ensure that it charges expenditures to the program that are incurred within an award?s allowable period of performance, that it maintains supporting documentation, and that supporting documentation is available for audit. Views of responsible officials: The Division will review and enhance internal controls to ensure program expenditures are properly charged. Questioned costs are due to the reporting requirements of this grant. Payments are made based on when invoices are received. Federal requirement is that CHIP draws, expenditures and reporting are done on a cost basis. DMMA reports based on the date of the draw, not the date of the invoice. The Division is exploring ways to meet all grant compliance requirements.
Reference Number 2022-001 Assistance Listing Number, Federal Agency, and Program Name - COVID 19 20.507, Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - MI-2020-052 Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.403 requires recipients of federal funds to expend them on allowable costs. Condition - The Authority disbursed a portion of its CARES Act funds to community partners; however, many of those partners offer only Section 5310 service for seniors and individuals with disabilities. Section 5310 program expenses are not allowable under the CARES Act. Questioned Costs - $1,146,291 Identification of How Questioned Costs Were Computed - Questioned costs represent the total amount of CARES Act funds passed through to community partners. Context - During the fiscal year, the Authority passed through $1,146,291 to 35 community partners. Cause and Effect - The CARES Act award was new to the Authority in fiscal year 2020. The Authority's other federal awards have existed for many years and the Authority is very familiar with their requirements and allowable uses. The Authority sought to share the new award with its community partners but was not aware that most of them did not have expenditures allowable under the CARES Act until the matter was identified during the Authority's most recent triennial review. Recommendation - When new awards are received, we recommend the Authority thoroughly analyze the compliance requirements, including the allowable uses. Views of Responsible Officials and Corrective Action Plan - Authority management is aware of the issue and has been diligently working with our FTA regional office to correct the issue. While certain community partner expenses were not eligible under the CARES Act, they are certainly eligible under CRRSA and ARPA funding grants. We are in the process of finalizing a plan with the FTA where all community partner relief funding will be reprogramed under the CRRSA and ARPA grants. This correction plan, once finalized, will result in no reduction of federal relief funding to SMART or any of our community partners. Given extraordinary circumstances and expedited nature of the CARES Act funding, we do not believe that this issue will be a significant risk for future grant funding; however, the Authority has modified our grant policy manual to ensure a more thorough review of eligible expenses for subrecipients.
FINDING 2022-003 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listings Number: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): 20611-053-PN01, 21611-053-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-010. Condition and Context The School Corporation is a member of the South LaPorte County Special Education Cooperative (Cooperative). The Cooperative operated the special education programs and spent the federal money on behalf of all its member schools. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. There was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 20 NEW PRAIRIE UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 school 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 the 20611-053-PN01 and 21611-053-PN01 grant awards could not be verified for the individual member schools. Total grant expenditures were posted as expended. The non-public proportionate share expenditures were determined by applying a percentage to the non-public school budgeted expenditures. These were the amounts reported to the IDOE. As such, we were unable to identify 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 was isolated to the 20611-053-PN01 and 21611-053-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." Cause The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreements and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 21 NEW PRAIRIE UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 an effective 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 Program: Special Education Grants to States Assistance Listings Number: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): 20611-053-PN01, 21611-053-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-010. Condition and Context The School Corporation is a member of the South LaPorte County Special Education Cooperative (Cooperative). The Cooperative operated the special education programs and spent the federal money on behalf of all its member schools. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. There was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 20 NEW PRAIRIE UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 school 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 the 20611-053-PN01 and 21611-053-PN01 grant awards could not be verified for the individual member schools. Total grant expenditures were posted as expended. The non-public proportionate share expenditures were determined by applying a percentage to the non-public school budgeted expenditures. These were the amounts reported to the IDOE. As such, we were unable to identify 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 was isolated to the 20611-053-PN01 and 21611-053-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." Cause The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreements and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 21 NEW PRAIRIE UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 an effective 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.
Section III ? Federal Award Findings and Questioned Costs Federal Agency: U.S. Department of the Treasury Reference Number: 2022-001 Program: COVID 19 - Coronavirus State and Local Fiscal Recovery Funds CFDA: 21.027 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowability: Indirect and Direct Costs Criteria Except for those nonfederal entities described in 2 CFR part 200, Appendix VII, paragraph D.1.b, if a nonfederal entity has never received a negotiated indirect cost rate, it may elect to charge a de minimis rate of 10 percent of modified total direct costs (MTDC). Effective on November 12, 2020, any nonfederal entity can use the de minimis rate. Such a rate may be used indefinitely or until the nonfederal entity chooses to negotiate a rate, which the nonfederal entity may do at any time. If a nonfederal entity chooses to use the de minimis rate, that rate must be used consistently for all of its federal awards. Also, as described in 2 CFR section 200.403, costs must be consistently charged as either indirect or direct cost, but may not be double charged or inconsistently charged as both. No documentation is required to justify using the de minimis rate. Condition In connection with our review of the indirect cost charges we noted that the 10% indirect cost rate allowed by the State of Delaware was applied to the organization?s indirect cost pool as opposed to its modified total direct costs. In addition, it was also determined there were additional direct costs that should have been allocated to the grant. Based upon revisions to items noted above, the grant had net overcharges amounting to $ 6,974. Cause The organization inadvertently used the wrong base when charging its indirect cost percentage which resulted in an overcharge of indirect costs. Effect, including perspective The organization did not comply with the specific requirements of Federal Regulations in respect to charging its indirect rate percentage to the correct base. Accordingly expenditures of $ 6,974 were overcharged from the total of $ 704,273 expended for the program for the year ended June 30, 2022. Questioned Costs Net questioned costs amounted to $ 6,974. Identification of Repeat Finding This is not a repeat finding. Recommendation We recommend management strengthen its controls over the charges related to its indirect costs and ensure it has properly accounted for all direct and indirect costs. In addition, we recommend the organization reduce its next draw from the program by the overcharged amount. Views of responsible officials and planned corrective actions See attached for views of responsible officials and the organization?s Corrective Action Plan.
Finding 2022-300: Disaster Grants?Public Assistance (Presidentially Declared Disasters)?Unallowable Costs Background: In February 2021, a presidential memorandum was issued extending certain federal support to increase the reimbursement and other assistance provided by the Federal Emergency Management Agency (FEMA) to states in order to combat COVID-19. The memorandum allowed FEMA to pay 100 percent of the costs of activities that had previously been determined to be eligible from the beginning of the public health emergency in January 2020. This funding was provided through the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant (Assistance Listing number 97.036). As a result, DHS changed the funding source of certain expenditures from a prior fiscal year by moving them to this grant in FY 2021-22. Criteria: Under 2 CFR 200.403, costs charged to a federal award must be necessary and reasonable for the performance of the federal award and be adequately documented. In addition, 2 CFR 200.402 requires that these costs must be reduced by any applicable credits, such as refunds for overpayments. Condition: In information submitted to FEMA to support reimbursement for costs related to personal protective equipment, we identified that DHS received reimbursements for transactions totaling $855,368 that should not have been included in its reimbursement request. Specifically, we found that DHS included a $395,000 payment for which it received a refund from the vendor. In addition, we found that DHS included a payment for $460,368 twice within the supporting documentation it provided to FEMA for its reimbursement request. Context: During FY 2021-22, DHS received reimbursements for costs associated with the public health emergency totaling $154.4 million from the Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant. We reviewed the supporting documentation for the two largest reimbursements and tested a selection of expenditures. Questioned Costs: $855,368 Effect: Because it received Disaster Grants?Public Assistance (Presidentially Declared Disasters) grant funding for inappropriate expenditure transactions, DHS was not in compliance with federal requirements. Cause: The inappropriate expenditure transactions we identified were included in the first large reimbursement request prepared by DHS, which was based on information provided by another state agency. At the time of this reimbursement request, DHS did not have procedures in place to identify duplicate or refunded payments within the data used to support the reimbursement request. DHS staff indicated that subsequent reimbursement requests were prepared using DHS queries from STAR, which is the State?s accounting system, that removed duplicated or refunded transactions. We did not identify issues in the other reimbursement request we reviewed. Recommendation: We recommend the Wisconsin Department of Health Services work with the federal government to resolve the $855,368 in unallowable costs we identified. Finding 2022-300: Disaster Grants?Public Assistance (Presidentially Declared Disasters)?Unallowable Costs COVID-19?Disaster Grants?Public Assistance (Presidentially Declared Disasters) (Assistance Listing number 97.036) Award Number Award Year 4650DR4520PA 2022 Questioned Costs: $855,368 Type of Finding: Noncompliance Response from the Wisconsin Department of Health Services: The Wisconsin Department of Health Services agrees with the audit finding and recommendation.
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): 20611-047-PN01, 20619-047-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not in place at the School Corporation in order to ensure compliance with the grant agreement and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have effective internal controls in place to ensure that the required level of expenditures for non-public students for private school and homeschooled students were met. The School Corporation did not spend all of the required proportionate share for grant 20611-047-PN01. Additionally, the School Corporation did not spend any of the required proportionate share amount for grant 20619-047-PN01. For grant 20611-047-PN01, the amounts spent for one of the four teachers was not supported by timesheets. 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 17 KANKAKEE VALLEY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.400 states in part: ". . . (a) The non-Federal entity is responsible for the efficient and effective administration of the Federal award through the application of sound management practices. (b) The non-Federal entity assumes responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." Cause Management had not developed a system of internal controls that would have ensured compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking 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 earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the 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 (Significant Deficiency) AL# 97.036: Disaster Grants ? Public Assistance (Presidentially Declared Disasters), Passed Thru the Oklahoma Department of Emergency Management, U.S. Department of Homeland Security, Award # PA-06-OK-PW-00187, 2022 Condition: There were three instances in which an employee?s pay rate used in calculating payroll expense was the current pay rate and not the pay rate in effect at the time the work was performed. Criteria: 2 CFR 200.403(g) states that costs must be adequately documented. Questioned Costs: Unknown Context: The total amount of expenditures for this federal assistance listing number is $19,546,051 which consists of 7 different grants crossing over 3 different city departments. This error occurred in only one department and one grant which had payroll costs totaling $677,863. A portion of these costs used updated pay rates, instead of pay rates active at the time of service which caused some individual pay dates to be overcharged to the grant. The sample size was determined based upon guidelines provided by the AICPA which is not a statistically valid sample. Cause: Employees received pay increases between the time the service was performed and when costs were identified as being covered by the disaster grant. The pay rate used was the pay rate for those employees at the time the expenditures were identified. Effect: Not properly identifying the appropriate pay rates used in determining payroll expenses may cause the federal program to be overcharged. Recommendation: We recommend when identifying payroll expenditures to be charged to disaster grants that a second review is done to ensure pay rates used to determine payroll expenses are the pay rates in effect at the time the employee provided the service. Views of Responsible Officials (Unaudited): The Parks and Recreation Department will immediately implement a process where the Parks & Grounds Superintendent (or designee) will review employee pay information that administrative staff prepares for entry into the federal grant website ensuring that it is properly formatted and accurately reflects the pay at the time the work was performed. Also, a procedure will be added to the FEMA section of the City's Grants Manual to include a second review to verify that the pay rates being used to determine payroll expenses are the rates that were in effect at the time the service was provided.