Criteria: 2 CFR 200.303 requires that a 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.403 requires that costs “be necessary and reasonable for the performance of the Federal award.” Costs should not consist of improper payments, including payments that were not eligible under the award document. Condition: The Town received a reimbursement for a cost from an award for “blighted property” that was not an eligible expense under the grant agreement. Cause: The Town’s controls related to allowable costs for individual grant agreements were not operating effectively. Effect or Potential Effect: Unallowable expenditures may have been paid with federal funds. Questioned Costs: $19,569 Context: Total federal expenditures for the Community Development Block Grants-State's Program and Non-Entitlement Grants in Hawaii were $1,450,668 for the fiscal year ended June 30, 2024. Identification of a Repeat Finding: This is not a repeat finding from the prior year. Recommendation: Officials should ensure that the control of personnel adequately reviewing award requirements before submitting for reimbursement of a particular cost is operating effectively. Furthermore, officials should consider a secondary review of reimbursement requests. Views of Responsible Officials: Management concurs with the finding and has developed a plan to correct the issue.
Criteria: 2 CFR 200.303 requires that a 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.403 requires that costs “be necessary and reasonable for the performance of the Federal award.” Costs should not consist of improper payments, including payments that were not eligible under the award document. Condition: The Town received a reimbursement for a cost from an award for “blighted property” that was not an eligible expense under the grant agreement. Cause: The Town’s controls related to allowable costs for individual grant agreements were not operating effectively. Effect or Potential Effect: Unallowable expenditures may have been paid with federal funds. Questioned Costs: $19,569 Context: Total federal expenditures for the Community Development Block Grants-State's Program and Non-Entitlement Grants in Hawaii were $1,450,668 for the fiscal year ended June 30, 2024. Identification of a Repeat Finding: This is not a repeat finding from the prior year. Recommendation: Officials should ensure that the control of personnel adequately reviewing award requirements before submitting for reimbursement of a particular cost is operating effectively. Furthermore, officials should consider a secondary review of reimbursement requests. Views of Responsible Officials: Management concurs with the finding and has developed a plan to correct the issue.
FINDING 2024-004 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 Number and Year (or Other Identifying Number): 22611-053-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Significant Deficiency, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context The School Corporation is a member of the South La Porte County Special Education (Cooperative). During fiscal year 2022-2023, the Cooperative operated the special education program and spent the federal money on behalf of all its members. As the grant agreement was between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. 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 nonpublic school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure nonpublic school expenditures were appropriately identified and reported. INDIANA STATE BOARD OF ACCOUNTS 22 NEW PRAIRIE UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Due to the timing of the Cooperative's corrective action, the nonpublic expenditures spent did not meet the earmarking requirements for the grant award number 22611-053-PN01. From the beginning of the grant awards until March 2023, total grant expenditures were posted as expended. The nonpublic proportionate share expenditures were determined by applying a percentage to the nonpublic school budgeted expenditures. Beginning in March 2023, the Cooperative began tracking expenditures by member school for the nonpublic services. As such, we were unable to identify if the minimum amount per the grant award was expended and properly reported to the IDOE from the beginning of the grant awards through March 2023, as required. The lack of internal controls and noncompliance was isolated to the 22611-053-PN01 grant award. 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." Cause Through management inquiry, they were unaware of the requirements to track nonpublic proportionate share expenditures directly for each member school. While the Cooperative did implement new processes and procedures to ensure expenditures were tracked by member schools starting in March 2023, most of the grant award had been allocated to the member schools based on a percentage of the budget. INDIANA STATE BOARD OF ACCOUNTS 23 NEW PRAIRIE UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the Cooperative was unable to track expenditures for nonpublic services for each member school. Consequently, the amounts requested for reimbursement were not supported by actual expenditures, but rather a percentage based on the budget per member school. Because of this, expenditures were not accurately reported to the oversight agency. Questioned Costs There were no questioned costs identified. Recommendation Management of the Cooperative should develop written policies and procedures which would require tracking of actual nonpublic proportionate share expenditures by member schools. Documentation should be maintained to show how these expenditures are being tracked to ensure compliance with the earmarking requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-004 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 Number and Year (or Other Identifying Number): 22611-053-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Significant Deficiency, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context The School Corporation is a member of the South La Porte County Special Education (Cooperative). During fiscal year 2022-2023, the Cooperative operated the special education program and spent the federal money on behalf of all its members. As the grant agreement was between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. 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 nonpublic school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure nonpublic school expenditures were appropriately identified and reported. INDIANA STATE BOARD OF ACCOUNTS 22 NEW PRAIRIE UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Due to the timing of the Cooperative's corrective action, the nonpublic expenditures spent did not meet the earmarking requirements for the grant award number 22611-053-PN01. From the beginning of the grant awards until March 2023, total grant expenditures were posted as expended. The nonpublic proportionate share expenditures were determined by applying a percentage to the nonpublic school budgeted expenditures. Beginning in March 2023, the Cooperative began tracking expenditures by member school for the nonpublic services. As such, we were unable to identify if the minimum amount per the grant award was expended and properly reported to the IDOE from the beginning of the grant awards through March 2023, as required. The lack of internal controls and noncompliance was isolated to the 22611-053-PN01 grant award. 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." Cause Through management inquiry, they were unaware of the requirements to track nonpublic proportionate share expenditures directly for each member school. While the Cooperative did implement new processes and procedures to ensure expenditures were tracked by member schools starting in March 2023, most of the grant award had been allocated to the member schools based on a percentage of the budget. INDIANA STATE BOARD OF ACCOUNTS 23 NEW PRAIRIE UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the Cooperative was unable to track expenditures for nonpublic services for each member school. Consequently, the amounts requested for reimbursement were not supported by actual expenditures, but rather a percentage based on the budget per member school. Because of this, expenditures were not accurately reported to the oversight agency. Questioned Costs There were no questioned costs identified. Recommendation Management of the Cooperative should develop written policies and procedures which would require tracking of actual nonpublic proportionate share expenditures by member schools. Documentation should be maintained to show how these expenditures are being tracked to ensure compliance with the earmarking requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Special Education Cluster (IDEA) -Earmarking Federal Agency: Department of Education Federal Program: COVID-19 - Special Education Preschool Grants Assistance Listings Number: 84.173X Federal Award Number and Year (or Other Identifying Number): 22619-130-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number is 2022-002 Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the 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 Non-Public Proportionate Share expenditures for the 22619-130-ARP grant were not spent in full, and the School Corporation did not file a waiver which if approved would have allowed the funds to be moved and spent under the regular Part B special education scope. The lack of internal controls and noncompliance were isolated to the 22619-130-ARP grant award. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 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 designed nor implemented a system of internal controls that would have ensured compliance with the grant agreement and the Matching, Level of Effort, Earmarking compliance requirement. The business office was not included in nonpublic meetings to know that open funds are not being clearly communicated with the nonpublic schools. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected. The parentally placed private school and homeschooled students could be deprived of this funding. Noncompliance with the grant agreement and the Matching, Level of Effort, Earmarking compliance requirement could result in the loss of future funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the 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 2024-003 Subject: Special Education Cluster (IDEA) -Earmarking Federal Agency: Department of Education Federal Program: COVID-19 - Special Education Preschool Grants Assistance Listings Number: 84.173X Federal Award Number and Year (or Other Identifying Number): 22619-130-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number is 2022-002 Condition and Context An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the 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 Non-Public Proportionate Share expenditures for the 22619-130-ARP grant were not spent in full, and the School Corporation did not file a waiver which if approved would have allowed the funds to be moved and spent under the regular Part B special education scope. The lack of internal controls and noncompliance were isolated to the 22619-130-ARP grant award. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 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 designed nor implemented a system of internal controls that would have ensured compliance with the grant agreement and the Matching, Level of Effort, Earmarking compliance requirement. The business office was not included in nonpublic meetings to know that open funds are not being clearly communicated with the nonpublic schools. Effect The failure to establish an effective system of internal controls enabled noncompliance to go undetected. The parentally placed private school and homeschooled students could be deprived of this funding. Noncompliance with the grant agreement and the Matching, Level of Effort, Earmarking compliance requirement could result in the loss of future funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the 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 2024-001 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions - Non-Profit School Food Service Accounts Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): SY 2022-2023, SY 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - Non-Profit School Food Service Accounts Audit Findings: Significant Deficiency, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to expenditures charged to the food service program fund. Indirect costs are those expenditures that benefit multiple programs, including the Child Nutrition Cluster that can be partially allocated to the program. To charge indirect costs, the School Corporation must apply for an indirect cost rate from the Indiana Department of Education (IDOE) each year. Indirect cost rates are calculated by the IDOE Office of School Finance utilizing the School Corporation's semiannual School Financial Report referred to as the Form 9. The School Corporation performed transfers out of the School Lunch fund for the allocated portion of the food service's utility service costs through the process of an indirect cost calculation performed by the School Corporation for the year ended June 30, 2024. The School Corporation had not applied or received approval from the IDOE to utilize an indirect cost rate. The total amount charged to the School Lunch fund for these costs totaled $275,724 for the year ended June 30, 2024. This amount was considered questioned costs. The lack of internal controls and noncompliance was isolated to the year ended June 30, 2024, and indirect costs noted above. 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 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 16 SCHOOL CITY OF MISHAWAKA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.332(b)(4) states: "Indirect cost rate: (i) An approved indirect cost rate negotiated between the subrecipient and the Federal Government. If no approved rate exists, a pass-through entity must determine the appropriate rate in collaboration with the subrecipient. The indirect cost rate may be either: (A) An indirect cost rate negotiated between the pass-through entity and the subrecipient. These rates may be based on a prior negotiated rate between a different pass-through entity and the subrecipient, in which case the pass-through entity is not required to collect information justifying the rate but may elect to do so; or (B) The de minimis indirect cost rate." Cause A proper system of internal controls was not designed by management of the School Corporation. The School Corporation calculated and charged an indirect cost rate to the food service program but did not seek approval from the IDOE by completing an application to obtain and use an indirect cost rate. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $275,724 were identified as detailed in the Condition and Context. Recommendation We recommended the School Corporation's management establish a proper system of internal controls to ensure that the disbursements are for the benefit of the school lunch program and comply with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - Non-Profit School Food Service Accounts compliance requirements. INDIANA STATE BOARD OF ACCOUNTS 17 SCHOOL CITY OF MISHAWAKA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions - Non-Profit School Food Service Accounts Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): SY 2022-2023, SY 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - Non-Profit School Food Service Accounts Audit Findings: Significant Deficiency, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to expenditures charged to the food service program fund. Indirect costs are those expenditures that benefit multiple programs, including the Child Nutrition Cluster that can be partially allocated to the program. To charge indirect costs, the School Corporation must apply for an indirect cost rate from the Indiana Department of Education (IDOE) each year. Indirect cost rates are calculated by the IDOE Office of School Finance utilizing the School Corporation's semiannual School Financial Report referred to as the Form 9. The School Corporation performed transfers out of the School Lunch fund for the allocated portion of the food service's utility service costs through the process of an indirect cost calculation performed by the School Corporation for the year ended June 30, 2024. The School Corporation had not applied or received approval from the IDOE to utilize an indirect cost rate. The total amount charged to the School Lunch fund for these costs totaled $275,724 for the year ended June 30, 2024. This amount was considered questioned costs. The lack of internal controls and noncompliance was isolated to the year ended June 30, 2024, and indirect costs noted above. 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 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 16 SCHOOL CITY OF MISHAWAKA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.332(b)(4) states: "Indirect cost rate: (i) An approved indirect cost rate negotiated between the subrecipient and the Federal Government. If no approved rate exists, a pass-through entity must determine the appropriate rate in collaboration with the subrecipient. The indirect cost rate may be either: (A) An indirect cost rate negotiated between the pass-through entity and the subrecipient. These rates may be based on a prior negotiated rate between a different pass-through entity and the subrecipient, in which case the pass-through entity is not required to collect information justifying the rate but may elect to do so; or (B) The de minimis indirect cost rate." Cause A proper system of internal controls was not designed by management of the School Corporation. The School Corporation calculated and charged an indirect cost rate to the food service program but did not seek approval from the IDOE by completing an application to obtain and use an indirect cost rate. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $275,724 were identified as detailed in the Condition and Context. Recommendation We recommended the School Corporation's management establish a proper system of internal controls to ensure that the disbursements are for the benefit of the school lunch program and comply with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - Non-Profit School Food Service Accounts compliance requirements. INDIANA STATE BOARD OF ACCOUNTS 17 SCHOOL CITY OF MISHAWAKA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions - Non-Profit School Food Service Accounts Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): SY 2022-2023, SY 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - Non-Profit School Food Service Accounts Audit Findings: Significant Deficiency, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to expenditures charged to the food service program fund. Indirect costs are those expenditures that benefit multiple programs, including the Child Nutrition Cluster that can be partially allocated to the program. To charge indirect costs, the School Corporation must apply for an indirect cost rate from the Indiana Department of Education (IDOE) each year. Indirect cost rates are calculated by the IDOE Office of School Finance utilizing the School Corporation's semiannual School Financial Report referred to as the Form 9. The School Corporation performed transfers out of the School Lunch fund for the allocated portion of the food service's utility service costs through the process of an indirect cost calculation performed by the School Corporation for the year ended June 30, 2024. The School Corporation had not applied or received approval from the IDOE to utilize an indirect cost rate. The total amount charged to the School Lunch fund for these costs totaled $275,724 for the year ended June 30, 2024. This amount was considered questioned costs. The lack of internal controls and noncompliance was isolated to the year ended June 30, 2024, and indirect costs noted above. 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 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 16 SCHOOL CITY OF MISHAWAKA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.332(b)(4) states: "Indirect cost rate: (i) An approved indirect cost rate negotiated between the subrecipient and the Federal Government. If no approved rate exists, a pass-through entity must determine the appropriate rate in collaboration with the subrecipient. The indirect cost rate may be either: (A) An indirect cost rate negotiated between the pass-through entity and the subrecipient. These rates may be based on a prior negotiated rate between a different pass-through entity and the subrecipient, in which case the pass-through entity is not required to collect information justifying the rate but may elect to do so; or (B) The de minimis indirect cost rate." Cause A proper system of internal controls was not designed by management of the School Corporation. The School Corporation calculated and charged an indirect cost rate to the food service program but did not seek approval from the IDOE by completing an application to obtain and use an indirect cost rate. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $275,724 were identified as detailed in the Condition and Context. Recommendation We recommended the School Corporation's management establish a proper system of internal controls to ensure that the disbursements are for the benefit of the school lunch program and comply with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - Non-Profit School Food Service Accounts compliance requirements. INDIANA STATE BOARD OF ACCOUNTS 17 SCHOOL CITY OF MISHAWAKA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions - Non-Profit School Food Service Accounts Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): SY 2022-2023, SY 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - Non-Profit School Food Service Accounts Audit Findings: Significant Deficiency, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to expenditures charged to the food service program fund. Indirect costs are those expenditures that benefit multiple programs, including the Child Nutrition Cluster that can be partially allocated to the program. To charge indirect costs, the School Corporation must apply for an indirect cost rate from the Indiana Department of Education (IDOE) each year. Indirect cost rates are calculated by the IDOE Office of School Finance utilizing the School Corporation's semiannual School Financial Report referred to as the Form 9. The School Corporation performed transfers out of the School Lunch fund for the allocated portion of the food service's utility service costs through the process of an indirect cost calculation performed by the School Corporation for the year ended June 30, 2024. The School Corporation had not applied or received approval from the IDOE to utilize an indirect cost rate. The total amount charged to the School Lunch fund for these costs totaled $275,724 for the year ended June 30, 2024. This amount was considered questioned costs. The lack of internal controls and noncompliance was isolated to the year ended June 30, 2024, and indirect costs noted above. 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 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 16 SCHOOL CITY OF MISHAWAKA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.332(b)(4) states: "Indirect cost rate: (i) An approved indirect cost rate negotiated between the subrecipient and the Federal Government. If no approved rate exists, a pass-through entity must determine the appropriate rate in collaboration with the subrecipient. The indirect cost rate may be either: (A) An indirect cost rate negotiated between the pass-through entity and the subrecipient. These rates may be based on a prior negotiated rate between a different pass-through entity and the subrecipient, in which case the pass-through entity is not required to collect information justifying the rate but may elect to do so; or (B) The de minimis indirect cost rate." Cause A proper system of internal controls was not designed by management of the School Corporation. The School Corporation calculated and charged an indirect cost rate to the food service program but did not seek approval from the IDOE by completing an application to obtain and use an indirect cost rate. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $275,724 were identified as detailed in the Condition and Context. Recommendation We recommended the School Corporation's management establish a proper system of internal controls to ensure that the disbursements are for the benefit of the school lunch program and comply with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - Non-Profit School Food Service Accounts compliance requirements. INDIANA STATE BOARD OF ACCOUNTS 17 SCHOOL CITY OF MISHAWAKA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions - Non-Profit School Food Service Accounts Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): SY 2022-2023, SY 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - Non-Profit School Food Service Accounts Audit Findings: Significant Deficiency, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to expenditures charged to the food service program fund. Indirect costs are those expenditures that benefit multiple programs, including the Child Nutrition Cluster that can be partially allocated to the program. To charge indirect costs, the School Corporation must apply for an indirect cost rate from the Indiana Department of Education (IDOE) each year. Indirect cost rates are calculated by the IDOE Office of School Finance utilizing the School Corporation's semiannual School Financial Report referred to as the Form 9. The School Corporation performed transfers out of the School Lunch fund for the allocated portion of the food service's utility service costs through the process of an indirect cost calculation performed by the School Corporation for the year ended June 30, 2024. The School Corporation had not applied or received approval from the IDOE to utilize an indirect cost rate. The total amount charged to the School Lunch fund for these costs totaled $275,724 for the year ended June 30, 2024. This amount was considered questioned costs. The lack of internal controls and noncompliance was isolated to the year ended June 30, 2024, and indirect costs noted above. 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 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 16 SCHOOL CITY OF MISHAWAKA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.332(b)(4) states: "Indirect cost rate: (i) An approved indirect cost rate negotiated between the subrecipient and the Federal Government. If no approved rate exists, a pass-through entity must determine the appropriate rate in collaboration with the subrecipient. The indirect cost rate may be either: (A) An indirect cost rate negotiated between the pass-through entity and the subrecipient. These rates may be based on a prior negotiated rate between a different pass-through entity and the subrecipient, in which case the pass-through entity is not required to collect information justifying the rate but may elect to do so; or (B) The de minimis indirect cost rate." Cause A proper system of internal controls was not designed by management of the School Corporation. The School Corporation calculated and charged an indirect cost rate to the food service program but did not seek approval from the IDOE by completing an application to obtain and use an indirect cost rate. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $275,724 were identified as detailed in the Condition and Context. Recommendation We recommended the School Corporation's management establish a proper system of internal controls to ensure that the disbursements are for the benefit of the school lunch program and comply with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - Non-Profit School Food Service Accounts compliance requirements. INDIANA STATE BOARD OF ACCOUNTS 17 SCHOOL CITY OF MISHAWAKA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Special Tests and Provisions - Non-Profit School Food Service Accounts Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): SY 2022-2023, SY 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - Non-Profit School Food Service Accounts Audit Findings: Significant Deficiency, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to expenditures charged to the food service program fund. Indirect costs are those expenditures that benefit multiple programs, including the Child Nutrition Cluster that can be partially allocated to the program. To charge indirect costs, the School Corporation must apply for an indirect cost rate from the Indiana Department of Education (IDOE) each year. Indirect cost rates are calculated by the IDOE Office of School Finance utilizing the School Corporation's semiannual School Financial Report referred to as the Form 9. The School Corporation performed transfers out of the School Lunch fund for the allocated portion of the food service's utility service costs through the process of an indirect cost calculation performed by the School Corporation for the year ended June 30, 2024. The School Corporation had not applied or received approval from the IDOE to utilize an indirect cost rate. The total amount charged to the School Lunch fund for these costs totaled $275,724 for the year ended June 30, 2024. This amount was considered questioned costs. The lack of internal controls and noncompliance was isolated to the year ended June 30, 2024, and indirect costs noted above. 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 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 16 SCHOOL CITY OF MISHAWAKA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.332(b)(4) states: "Indirect cost rate: (i) An approved indirect cost rate negotiated between the subrecipient and the Federal Government. If no approved rate exists, a pass-through entity must determine the appropriate rate in collaboration with the subrecipient. The indirect cost rate may be either: (A) An indirect cost rate negotiated between the pass-through entity and the subrecipient. These rates may be based on a prior negotiated rate between a different pass-through entity and the subrecipient, in which case the pass-through entity is not required to collect information justifying the rate but may elect to do so; or (B) The de minimis indirect cost rate." Cause A proper system of internal controls was not designed by management of the School Corporation. The School Corporation calculated and charged an indirect cost rate to the food service program but did not seek approval from the IDOE by completing an application to obtain and use an indirect cost rate. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $275,724 were identified as detailed in the Condition and Context. Recommendation We recommended the School Corporation's management establish a proper system of internal controls to ensure that the disbursements are for the benefit of the school lunch program and comply with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Special Tests and Provisions - Non-Profit School Food Service Accounts compliance requirements. INDIANA STATE BOARD OF ACCOUNTS 17 SCHOOL CITY OF MISHAWAKA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 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): H027A190084 / 22611-037-PN01, H027A200084 / 21611-037-PN01, H173A210104 / 22619-037-PN01, H173A220104 / 23619-037-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 19 SCHOOL CITY OF MISHAWAKA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Earmarking compliance requirement. The School Corporation is to ensure the same proportionate share amount of services is expended for students with disabilities in nonpublic schools as they do for students with disabilities in the public school system. The School Corporation did not have adequate policies or procedures in place to ensure that employees properly documented time worked split between public and non-public students. The School Corporation maintained time and effort logs documenting all employees who worked exclusively on the Special Education Program utilizing a semiannual certification. Employees who worked with both nonpublic and public students were included on the semiannual certifications, but the School Corporation did not maintain documentation supporting how much time was spent working specifically with nonpublic students. Due to this, we were not able to determine if the School Corporation met the earmarking requirement for the grants noted. The lack of internal controls and noncompliance was isolated to employees that spent time working with both public and nonpublic students within the grants noted above by identifying number. 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 award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." INDIANA STATE BOARD OF ACCOUNTS 20 SCHOOL CITY OF MISHAWAKA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Through management inquiry, they were unaware of the requirements to track nonpublic proportionate share expenditures directly for each employe based on actual time spent on nonpublic education. Effect The amounts requested for reimbursement were not supported by actual expenditures, but rather by a percentage per employee. Therefore, we were not able to determine if the unit was in compliance with the earmarking requirements. Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation Management of the School Corporation should develop written policies and procedures which would require tracking of actual nonpublic proportionate share expenditures by employee. Documentation should be maintained to show how these expenditures are being tracked to ensure compliance with the earmarking requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 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): H027A190084 / 22611-037-PN01, H027A200084 / 21611-037-PN01, H173A210104 / 22619-037-PN01, H173A220104 / 23619-037-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 19 SCHOOL CITY OF MISHAWAKA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Earmarking compliance requirement. The School Corporation is to ensure the same proportionate share amount of services is expended for students with disabilities in nonpublic schools as they do for students with disabilities in the public school system. The School Corporation did not have adequate policies or procedures in place to ensure that employees properly documented time worked split between public and non-public students. The School Corporation maintained time and effort logs documenting all employees who worked exclusively on the Special Education Program utilizing a semiannual certification. Employees who worked with both nonpublic and public students were included on the semiannual certifications, but the School Corporation did not maintain documentation supporting how much time was spent working specifically with nonpublic students. Due to this, we were not able to determine if the School Corporation met the earmarking requirement for the grants noted. The lack of internal controls and noncompliance was isolated to employees that spent time working with both public and nonpublic students within the grants noted above by identifying number. 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 award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." INDIANA STATE BOARD OF ACCOUNTS 20 SCHOOL CITY OF MISHAWAKA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Through management inquiry, they were unaware of the requirements to track nonpublic proportionate share expenditures directly for each employe based on actual time spent on nonpublic education. Effect The amounts requested for reimbursement were not supported by actual expenditures, but rather by a percentage per employee. Therefore, we were not able to determine if the unit was in compliance with the earmarking requirements. Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation Management of the School Corporation should develop written policies and procedures which would require tracking of actual nonpublic proportionate share expenditures by employee. Documentation should be maintained to show how these expenditures are being tracked to ensure compliance with the earmarking requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 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): H027A190084 / 22611-037-PN01, H027A200084 / 21611-037-PN01, H173A210104 / 22619-037-PN01, H173A220104 / 23619-037-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 19 SCHOOL CITY OF MISHAWAKA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Earmarking compliance requirement. The School Corporation is to ensure the same proportionate share amount of services is expended for students with disabilities in nonpublic schools as they do for students with disabilities in the public school system. The School Corporation did not have adequate policies or procedures in place to ensure that employees properly documented time worked split between public and non-public students. The School Corporation maintained time and effort logs documenting all employees who worked exclusively on the Special Education Program utilizing a semiannual certification. Employees who worked with both nonpublic and public students were included on the semiannual certifications, but the School Corporation did not maintain documentation supporting how much time was spent working specifically with nonpublic students. Due to this, we were not able to determine if the School Corporation met the earmarking requirement for the grants noted. The lack of internal controls and noncompliance was isolated to employees that spent time working with both public and nonpublic students within the grants noted above by identifying number. 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 award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." INDIANA STATE BOARD OF ACCOUNTS 20 SCHOOL CITY OF MISHAWAKA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Through management inquiry, they were unaware of the requirements to track nonpublic proportionate share expenditures directly for each employe based on actual time spent on nonpublic education. Effect The amounts requested for reimbursement were not supported by actual expenditures, but rather by a percentage per employee. Therefore, we were not able to determine if the unit was in compliance with the earmarking requirements. Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation Management of the School Corporation should develop written policies and procedures which would require tracking of actual nonpublic proportionate share expenditures by employee. Documentation should be maintained to show how these expenditures are being tracked to ensure compliance with the earmarking requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 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): H027A190084 / 22611-037-PN01, H027A200084 / 21611-037-PN01, H173A210104 / 22619-037-PN01, H173A220104 / 23619-037-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 19 SCHOOL CITY OF MISHAWAKA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Earmarking compliance requirement. The School Corporation is to ensure the same proportionate share amount of services is expended for students with disabilities in nonpublic schools as they do for students with disabilities in the public school system. The School Corporation did not have adequate policies or procedures in place to ensure that employees properly documented time worked split between public and non-public students. The School Corporation maintained time and effort logs documenting all employees who worked exclusively on the Special Education Program utilizing a semiannual certification. Employees who worked with both nonpublic and public students were included on the semiannual certifications, but the School Corporation did not maintain documentation supporting how much time was spent working specifically with nonpublic students. Due to this, we were not able to determine if the School Corporation met the earmarking requirement for the grants noted. The lack of internal controls and noncompliance was isolated to employees that spent time working with both public and nonpublic students within the grants noted above by identifying number. 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 award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." INDIANA STATE BOARD OF ACCOUNTS 20 SCHOOL CITY OF MISHAWAKA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Through management inquiry, they were unaware of the requirements to track nonpublic proportionate share expenditures directly for each employe based on actual time spent on nonpublic education. Effect The amounts requested for reimbursement were not supported by actual expenditures, but rather by a percentage per employee. Therefore, we were not able to determine if the unit was in compliance with the earmarking requirements. Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation Management of the School Corporation should develop written policies and procedures which would require tracking of actual nonpublic proportionate share expenditures by employee. Documentation should be maintained to show how these expenditures are being tracked to ensure compliance with the earmarking requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-006 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425U Federal Award Number and Year (or Other Identifying Number): S425U210013 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 designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Federal funds may only be used to pay staff for work that has occurred supporting the objective of the federal program. As such, proper time and effort documentation is to be maintained by the School Corporation. The purpose of time and effort recording is to provide documentation of the time spent working on specific federal programs to ensure charges are accurate for each program. In a sample of six payroll disbursements charged to the Education Stabilization Fund (ESF) grant, four disbursements were for payments to employees whose time was split between the ESF and nonfederal activity. Time and effort records were not maintained for any of these four employees, and, therefore, we were unable to determine if the total costs were allowable, resulting in $5,572 of questioned costs. INDIANA STATE BOARD OF ACCOUNTS 26 SCHOOL CITY OF MISHAWAKA 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: . . . (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 . . . (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; . . . (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. . . ." While across the board stipends are not permitted, LEAs may pay staff for COVID-related work that has been documented. Most, if not all, staff likely had extra responsibilities as well as time and effort to respond to the pandemic. ESSER funds can be used to pay staff for that work and LEAs are responsible for documenting that this work occurred. (Indiana Department of Education, ESSER III Frequently Asked Questions (FAQs) updated August 16, 2021) INDIANA STATE BOARD OF ACCOUNTS 27 SCHOOL CITY OF MISHAWAKA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls over the payroll disbursements for employees who worked with both federal and nonfederal programs was not properly designed or implemented by management. The School Corporation did not maintain a record of the actual time spent working on extra responsibilities for COVID-related work to ensure allowability. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $5,572 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with 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 2024-006 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425U Federal Award Number and Year (or Other Identifying Number): S425U210013 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 designed or implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Federal funds may only be used to pay staff for work that has occurred supporting the objective of the federal program. As such, proper time and effort documentation is to be maintained by the School Corporation. The purpose of time and effort recording is to provide documentation of the time spent working on specific federal programs to ensure charges are accurate for each program. In a sample of six payroll disbursements charged to the Education Stabilization Fund (ESF) grant, four disbursements were for payments to employees whose time was split between the ESF and nonfederal activity. Time and effort records were not maintained for any of these four employees, and, therefore, we were unable to determine if the total costs were allowable, resulting in $5,572 of questioned costs. INDIANA STATE BOARD OF ACCOUNTS 26 SCHOOL CITY OF MISHAWAKA 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: . . . (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 . . . (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; . . . (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. . . ." While across the board stipends are not permitted, LEAs may pay staff for COVID-related work that has been documented. Most, if not all, staff likely had extra responsibilities as well as time and effort to respond to the pandemic. ESSER funds can be used to pay staff for that work and LEAs are responsible for documenting that this work occurred. (Indiana Department of Education, ESSER III Frequently Asked Questions (FAQs) updated August 16, 2021) INDIANA STATE BOARD OF ACCOUNTS 27 SCHOOL CITY OF MISHAWAKA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls over the payroll disbursements for employees who worked with both federal and nonfederal programs was not properly designed or implemented by management. The School Corporation did not maintain a record of the actual time spent working on extra responsibilities for COVID-related work to ensure allowability. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $5,572 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with 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 2024-005 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States Assistance Listings Number: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-046-PN01, 22611-046-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 23 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation is a member of the Porter County Education Services (Cooperative). During fiscal year 2023-2024, the Cooperative operated the special education program and spent the federal money on behalf of all its members. As the grant agreement was between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. 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 nonpublic school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure nonpublic school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for the 22611-046-PN01 and 22611-046-ARP grant awards could not be verified for the individual member schools. Total grant expenditures were posted as expended. The nonpublic proportionate share expenditures were determined by applying a percentage to the nonpublic school budgeted expenditures. As such, we were unable to identify if the minimum amount per the grant award was expended and properly reported to the IDOE as required. The lack of internal controls and noncompliance was isolated to the 22611-046-PN01 and 22611-046-ARP grant awards. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." INDIANA STATE BOARD OF ACCOUNTS 24 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Through inquiry of the Cooperative management, they were unaware of the requirements to track nonpublic proportionate share expenditures directly for each member school. While the Cooperative did implement new processes and procedures to ensure expenditures were tracked by member schools starting in July 2022, all of the grant awards had been allocated to the member schools based on a percentage of the budget. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation was unable to ensure the Cooperative compliance with earmarking requirements and the Cooperative was unable to track expenditures for nonpublic services for each member school. Consequently, the amounts requested for reimbursement were not supported by actual expenditures, but rather a percentage based on the budget per member school. Because of this, expenditures were not accurately reported to the oversight agency. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure nonpublic proportionate share funds are appropriately allocated to the member school based on expenditures charged directly on behalf of the member school. Supporting documentation for these expenditures should be retained for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States Assistance Listings Number: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-046-PN01, 22611-046-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 23 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation is a member of the Porter County Education Services (Cooperative). During fiscal year 2023-2024, the Cooperative operated the special education program and spent the federal money on behalf of all its members. As the grant agreement was between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. 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 nonpublic school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure nonpublic school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for the 22611-046-PN01 and 22611-046-ARP grant awards could not be verified for the individual member schools. Total grant expenditures were posted as expended. The nonpublic proportionate share expenditures were determined by applying a percentage to the nonpublic school budgeted expenditures. As such, we were unable to identify if the minimum amount per the grant award was expended and properly reported to the IDOE as required. The lack of internal controls and noncompliance was isolated to the 22611-046-PN01 and 22611-046-ARP grant awards. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." INDIANA STATE BOARD OF ACCOUNTS 24 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Through inquiry of the Cooperative management, they were unaware of the requirements to track nonpublic proportionate share expenditures directly for each member school. While the Cooperative did implement new processes and procedures to ensure expenditures were tracked by member schools starting in July 2022, all of the grant awards had been allocated to the member schools based on a percentage of the budget. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation was unable to ensure the Cooperative compliance with earmarking requirements and the Cooperative was unable to track expenditures for nonpublic services for each member school. Consequently, the amounts requested for reimbursement were not supported by actual expenditures, but rather a percentage based on the budget per member school. Because of this, expenditures were not accurately reported to the oversight agency. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure nonpublic proportionate share funds are appropriately allocated to the member school based on expenditures charged directly on behalf of the member school. Supporting documentation for these expenditures should be retained for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States Assistance Listings Number: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-046-PN01, 22611-046-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 23 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation is a member of the Porter County Education Services (Cooperative). During fiscal year 2023-2024, the Cooperative operated the special education program and spent the federal money on behalf of all its members. As the grant agreement was between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. 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 nonpublic school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure nonpublic school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for the 22611-046-PN01 and 22611-046-ARP grant awards could not be verified for the individual member schools. Total grant expenditures were posted as expended. The nonpublic proportionate share expenditures were determined by applying a percentage to the nonpublic school budgeted expenditures. As such, we were unable to identify if the minimum amount per the grant award was expended and properly reported to the IDOE as required. The lack of internal controls and noncompliance was isolated to the 22611-046-PN01 and 22611-046-ARP grant awards. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." INDIANA STATE BOARD OF ACCOUNTS 24 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Through inquiry of the Cooperative management, they were unaware of the requirements to track nonpublic proportionate share expenditures directly for each member school. While the Cooperative did implement new processes and procedures to ensure expenditures were tracked by member schools starting in July 2022, all of the grant awards had been allocated to the member schools based on a percentage of the budget. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation was unable to ensure the Cooperative compliance with earmarking requirements and the Cooperative was unable to track expenditures for nonpublic services for each member school. Consequently, the amounts requested for reimbursement were not supported by actual expenditures, but rather a percentage based on the budget per member school. Because of this, expenditures were not accurately reported to the oversight agency. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure nonpublic proportionate share funds are appropriately allocated to the member school based on expenditures charged directly on behalf of the member school. Supporting documentation for these expenditures should be retained for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: Special Education Cluster (IDEA) - Earmarking Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States Assistance Listings Number: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-046-PN01, 22611-046-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 23 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The School Corporation is a member of the Porter County Education Services (Cooperative). During fiscal year 2023-2024, the Cooperative operated the special education program and spent the federal money on behalf of all its members. As the grant agreement was between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. 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 nonpublic school students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure nonpublic school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for the 22611-046-PN01 and 22611-046-ARP grant awards could not be verified for the individual member schools. Total grant expenditures were posted as expended. The nonpublic proportionate share expenditures were determined by applying a percentage to the nonpublic school budgeted expenditures. As such, we were unable to identify if the minimum amount per the grant award was expended and properly reported to the IDOE as required. The lack of internal controls and noncompliance was isolated to the 22611-046-PN01 and 22611-046-ARP grant awards. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." INDIANA STATE BOARD OF ACCOUNTS 24 METROPOLITAN SCHOOL DISTRICT OF BOONE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Through inquiry of the Cooperative management, they were unaware of the requirements to track nonpublic proportionate share expenditures directly for each member school. While the Cooperative did implement new processes and procedures to ensure expenditures were tracked by member schools starting in July 2022, all of the grant awards had been allocated to the member schools based on a percentage of the budget. Effect Without the proper implementation of an effectively designed system of internal controls, the School Corporation was unable to ensure the Cooperative compliance with earmarking requirements and the Cooperative was unable to track expenditures for nonpublic services for each member school. Consequently, the amounts requested for reimbursement were not supported by actual expenditures, but rather a percentage based on the budget per member school. Because of this, expenditures were not accurately reported to the oversight agency. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure nonpublic proportionate share funds are appropriately allocated to the member school based on expenditures charged directly on behalf of the member school. Supporting documentation for these expenditures should be retained for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding - The District charged Federal programs for health insurance program premium costs totaling $496,203 for several Federally funded employees who did not participate in the health insurance program, resulting in Federal program questioned costs of that amount. Criteria - Title 2, Section 200.403, Code of Federal Regulations (CFR), provides that, for an expenditure to be allowable under Federal awards, costs must be necessary and reasonable for the performance of the Federal award and must be adequately documented. Title 2, Section 200.431, CFR, provides that the costs of fringe benefits, including employee insurance, are allowable provided that the benefits are reasonable and required by law, District-employee agreement, or an established policy of the District. Condition - For the 2023-24 fiscal year, the District provided an employee health insurance program as an employee fringe benefit for program participants and the Board authorized District contributions for individual and family coverage, including contributions for Federally funded employees. The District recorded health insurance premium expenditures each pay period for each employee; however, several Federally funded employees did not participate in the health insurance program. Consequently, the Federal programs should not have incurred health insurance costs for those employees. Based on our discussions with District personnel and examination of District records, we found that the health insurance premium costs for Federally funded employees who did not participate in the health insurance program totaled $496,203. Cause - District personnel indicated that they did not monitor the health insurance program participants and related expenditures to ensure that the premium costs were only recorded for health insurance program participants. District personnel also agreed with the questioned costs calculations. Effect - The District did not comply with Federal regulations that require all Federal expenditures to represent reasonable and necessary charges. Consequently, the CNC incurred questioned costs totaling $306,926, the SEC incurred questioned costs totaling $108,444, and the Title I Program incurred questioned costs totaling $80,833. Recommendation - The District should establish effective procedures for monitoring the health insurance program participants and related expenditures to ensure that premium costs are only recorded for program participants. Also, the District should document to the respective grantors the allowability of the questioned costs totaling $496,203 or restore these moneys to the appropriate Federal programs. District Response - The District agrees with the finding. We will work with DOE and other district finance officers to ensure processes going forward are accurate and appropriate with no programs being overcharged.
Finding - The District charged Federal programs for health insurance program premium costs totaling $496,203 for several Federally funded employees who did not participate in the health insurance program, resulting in Federal program questioned costs of that amount. Criteria - Title 2, Section 200.403, Code of Federal Regulations (CFR), provides that, for an expenditure to be allowable under Federal awards, costs must be necessary and reasonable for the performance of the Federal award and must be adequately documented. Title 2, Section 200.431, CFR, provides that the costs of fringe benefits, including employee insurance, are allowable provided that the benefits are reasonable and required by law, District-employee agreement, or an established policy of the District. Condition - For the 2023-24 fiscal year, the District provided an employee health insurance program as an employee fringe benefit for program participants and the Board authorized District contributions for individual and family coverage, including contributions for Federally funded employees. The District recorded health insurance premium expenditures each pay period for each employee; however, several Federally funded employees did not participate in the health insurance program. Consequently, the Federal programs should not have incurred health insurance costs for those employees. Based on our discussions with District personnel and examination of District records, we found that the health insurance premium costs for Federally funded employees who did not participate in the health insurance program totaled $496,203. Cause - District personnel indicated that they did not monitor the health insurance program participants and related expenditures to ensure that the premium costs were only recorded for health insurance program participants. District personnel also agreed with the questioned costs calculations. Effect - The District did not comply with Federal regulations that require all Federal expenditures to represent reasonable and necessary charges. Consequently, the CNC incurred questioned costs totaling $306,926, the SEC incurred questioned costs totaling $108,444, and the Title I Program incurred questioned costs totaling $80,833. Recommendation - The District should establish effective procedures for monitoring the health insurance program participants and related expenditures to ensure that premium costs are only recorded for program participants. Also, the District should document to the respective grantors the allowability of the questioned costs totaling $496,203 or restore these moneys to the appropriate Federal programs. District Response - The District agrees with the finding. We will work with DOE and other district finance officers to ensure processes going forward are accurate and appropriate with no programs being overcharged.
Finding - The District charged Federal programs for health insurance program premium costs totaling $496,203 for several Federally funded employees who did not participate in the health insurance program, resulting in Federal program questioned costs of that amount. Criteria - Title 2, Section 200.403, Code of Federal Regulations (CFR), provides that, for an expenditure to be allowable under Federal awards, costs must be necessary and reasonable for the performance of the Federal award and must be adequately documented. Title 2, Section 200.431, CFR, provides that the costs of fringe benefits, including employee insurance, are allowable provided that the benefits are reasonable and required by law, District-employee agreement, or an established policy of the District. Condition - For the 2023-24 fiscal year, the District provided an employee health insurance program as an employee fringe benefit for program participants and the Board authorized District contributions for individual and family coverage, including contributions for Federally funded employees. The District recorded health insurance premium expenditures each pay period for each employee; however, several Federally funded employees did not participate in the health insurance program. Consequently, the Federal programs should not have incurred health insurance costs for those employees. Based on our discussions with District personnel and examination of District records, we found that the health insurance premium costs for Federally funded employees who did not participate in the health insurance program totaled $496,203. Cause - District personnel indicated that they did not monitor the health insurance program participants and related expenditures to ensure that the premium costs were only recorded for health insurance program participants. District personnel also agreed with the questioned costs calculations. Effect - The District did not comply with Federal regulations that require all Federal expenditures to represent reasonable and necessary charges. Consequently, the CNC incurred questioned costs totaling $306,926, the SEC incurred questioned costs totaling $108,444, and the Title I Program incurred questioned costs totaling $80,833. Recommendation - The District should establish effective procedures for monitoring the health insurance program participants and related expenditures to ensure that premium costs are only recorded for program participants. Also, the District should document to the respective grantors the allowability of the questioned costs totaling $496,203 or restore these moneys to the appropriate Federal programs. District Response - The District agrees with the finding. We will work with DOE and other district finance officers to ensure processes going forward are accurate and appropriate with no programs being overcharged.
Finding - The District charged Federal programs for health insurance program premium costs totaling $496,203 for several Federally funded employees who did not participate in the health insurance program, resulting in Federal program questioned costs of that amount. Criteria - Title 2, Section 200.403, Code of Federal Regulations (CFR), provides that, for an expenditure to be allowable under Federal awards, costs must be necessary and reasonable for the performance of the Federal award and must be adequately documented. Title 2, Section 200.431, CFR, provides that the costs of fringe benefits, including employee insurance, are allowable provided that the benefits are reasonable and required by law, District-employee agreement, or an established policy of the District. Condition - For the 2023-24 fiscal year, the District provided an employee health insurance program as an employee fringe benefit for program participants and the Board authorized District contributions for individual and family coverage, including contributions for Federally funded employees. The District recorded health insurance premium expenditures each pay period for each employee; however, several Federally funded employees did not participate in the health insurance program. Consequently, the Federal programs should not have incurred health insurance costs for those employees. Based on our discussions with District personnel and examination of District records, we found that the health insurance premium costs for Federally funded employees who did not participate in the health insurance program totaled $496,203. Cause - District personnel indicated that they did not monitor the health insurance program participants and related expenditures to ensure that the premium costs were only recorded for health insurance program participants. District personnel also agreed with the questioned costs calculations. Effect - The District did not comply with Federal regulations that require all Federal expenditures to represent reasonable and necessary charges. Consequently, the CNC incurred questioned costs totaling $306,926, the SEC incurred questioned costs totaling $108,444, and the Title I Program incurred questioned costs totaling $80,833. Recommendation - The District should establish effective procedures for monitoring the health insurance program participants and related expenditures to ensure that premium costs are only recorded for program participants. Also, the District should document to the respective grantors the allowability of the questioned costs totaling $496,203 or restore these moneys to the appropriate Federal programs. District Response - The District agrees with the finding. We will work with DOE and other district finance officers to ensure processes going forward are accurate and appropriate with no programs being overcharged.
Finding - The District charged Federal programs for health insurance program premium costs totaling $496,203 for several Federally funded employees who did not participate in the health insurance program, resulting in Federal program questioned costs of that amount. Criteria - Title 2, Section 200.403, Code of Federal Regulations (CFR), provides that, for an expenditure to be allowable under Federal awards, costs must be necessary and reasonable for the performance of the Federal award and must be adequately documented. Title 2, Section 200.431, CFR, provides that the costs of fringe benefits, including employee insurance, are allowable provided that the benefits are reasonable and required by law, District-employee agreement, or an established policy of the District. Condition - For the 2023-24 fiscal year, the District provided an employee health insurance program as an employee fringe benefit for program participants and the Board authorized District contributions for individual and family coverage, including contributions for Federally funded employees. The District recorded health insurance premium expenditures each pay period for each employee; however, several Federally funded employees did not participate in the health insurance program. Consequently, the Federal programs should not have incurred health insurance costs for those employees. Based on our discussions with District personnel and examination of District records, we found that the health insurance premium costs for Federally funded employees who did not participate in the health insurance program totaled $496,203. Cause - District personnel indicated that they did not monitor the health insurance program participants and related expenditures to ensure that the premium costs were only recorded for health insurance program participants. District personnel also agreed with the questioned costs calculations. Effect - The District did not comply with Federal regulations that require all Federal expenditures to represent reasonable and necessary charges. Consequently, the CNC incurred questioned costs totaling $306,926, the SEC incurred questioned costs totaling $108,444, and the Title I Program incurred questioned costs totaling $80,833. Recommendation - The District should establish effective procedures for monitoring the health insurance program participants and related expenditures to ensure that premium costs are only recorded for program participants. Also, the District should document to the respective grantors the allowability of the questioned costs totaling $496,203 or restore these moneys to the appropriate Federal programs. District Response - The District agrees with the finding. We will work with DOE and other district finance officers to ensure processes going forward are accurate and appropriate with no programs being overcharged.
Finding - The District charged Federal programs for health insurance program premium costs totaling $496,203 for several Federally funded employees who did not participate in the health insurance program, resulting in Federal program questioned costs of that amount. Criteria - Title 2, Section 200.403, Code of Federal Regulations (CFR), provides that, for an expenditure to be allowable under Federal awards, costs must be necessary and reasonable for the performance of the Federal award and must be adequately documented. Title 2, Section 200.431, CFR, provides that the costs of fringe benefits, including employee insurance, are allowable provided that the benefits are reasonable and required by law, District-employee agreement, or an established policy of the District. Condition - For the 2023-24 fiscal year, the District provided an employee health insurance program as an employee fringe benefit for program participants and the Board authorized District contributions for individual and family coverage, including contributions for Federally funded employees. The District recorded health insurance premium expenditures each pay period for each employee; however, several Federally funded employees did not participate in the health insurance program. Consequently, the Federal programs should not have incurred health insurance costs for those employees. Based on our discussions with District personnel and examination of District records, we found that the health insurance premium costs for Federally funded employees who did not participate in the health insurance program totaled $496,203. Cause - District personnel indicated that they did not monitor the health insurance program participants and related expenditures to ensure that the premium costs were only recorded for health insurance program participants. District personnel also agreed with the questioned costs calculations. Effect - The District did not comply with Federal regulations that require all Federal expenditures to represent reasonable and necessary charges. Consequently, the CNC incurred questioned costs totaling $306,926, the SEC incurred questioned costs totaling $108,444, and the Title I Program incurred questioned costs totaling $80,833. Recommendation - The District should establish effective procedures for monitoring the health insurance program participants and related expenditures to ensure that premium costs are only recorded for program participants. Also, the District should document to the respective grantors the allowability of the questioned costs totaling $496,203 or restore these moneys to the appropriate Federal programs. District Response - The District agrees with the finding. We will work with DOE and other district finance officers to ensure processes going forward are accurate and appropriate with no programs being overcharged.
Finding - The District charged Federal programs for health insurance program premium costs totaling $496,203 for several Federally funded employees who did not participate in the health insurance program, resulting in Federal program questioned costs of that amount. Criteria - Title 2, Section 200.403, Code of Federal Regulations (CFR), provides that, for an expenditure to be allowable under Federal awards, costs must be necessary and reasonable for the performance of the Federal award and must be adequately documented. Title 2, Section 200.431, CFR, provides that the costs of fringe benefits, including employee insurance, are allowable provided that the benefits are reasonable and required by law, District-employee agreement, or an established policy of the District. Condition - For the 2023-24 fiscal year, the District provided an employee health insurance program as an employee fringe benefit for program participants and the Board authorized District contributions for individual and family coverage, including contributions for Federally funded employees. The District recorded health insurance premium expenditures each pay period for each employee; however, several Federally funded employees did not participate in the health insurance program. Consequently, the Federal programs should not have incurred health insurance costs for those employees. Based on our discussions with District personnel and examination of District records, we found that the health insurance premium costs for Federally funded employees who did not participate in the health insurance program totaled $496,203. Cause - District personnel indicated that they did not monitor the health insurance program participants and related expenditures to ensure that the premium costs were only recorded for health insurance program participants. District personnel also agreed with the questioned costs calculations. Effect - The District did not comply with Federal regulations that require all Federal expenditures to represent reasonable and necessary charges. Consequently, the CNC incurred questioned costs totaling $306,926, the SEC incurred questioned costs totaling $108,444, and the Title I Program incurred questioned costs totaling $80,833. Recommendation - The District should establish effective procedures for monitoring the health insurance program participants and related expenditures to ensure that premium costs are only recorded for program participants. Also, the District should document to the respective grantors the allowability of the questioned costs totaling $496,203 or restore these moneys to the appropriate Federal programs. District Response - The District agrees with the finding. We will work with DOE and other district finance officers to ensure processes going forward are accurate and appropriate with no programs being overcharged.
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.