Assistance Listing Number(s): 10.553 and 10.555 Name of Federal Program or Cluster: Child Nutrition Cluster Name of Federal Agency: Department of Agriculture Name of Pass-through Entity: Wisconsin Department of Public Instruction Pass-through Entity Identifying Number(s): 2023-138142-DPI-SB-546, 2023-138005-DPI-SB-546, 2023-138005-DPI-NSL-547, and 2023-138005-DPI-SK_NSLAE-566 Award Period: July 1, 2022 through June 30, 2023 Criteria: According to 2 CFR, Part 200.300 of the Uniform Guidance, a non-federal entity must have the following policies over compliance: cash management (section 200.302(b)(6)), allowability of costs (section 200.302(b)(7)), procurement (section 200.318-.326, reporting (section 200.303), special tests (section 200.303), travel (section 200.475(b)), compensation (section 200.430(a)(1)), and fringe benefits (section 200.431). Condition: Written policies and procedures are not in accordance with the Uniform Guidance. Cause: Sufficient training has not been provided to individuals responsible for the development of written policies and procedures in accordance with the Uniform Guidance. Effect or Potential Effect: Lack of policies and procedures in accordance with the Uniform Guidance could result in noncompliance, disallowed costs, or discontinuance of federal funding. Repeat Finding: No Recommendation: Additional training should be provided to individuals responsible for the development of written policies and procedures in accordance with the Uniform Guidance. Views of Responsible Officials: One City Schools, Inc. agrees with the finding and are working on creating written policies and procedures in accordance with the Uniform Guidance.
Assistance Listing Number(s): 10.553 and 10.555 Name of Federal Program or Cluster: Child Nutrition Cluster Name of Federal Agency: Department of Agriculture Name of Pass-through Entity: Wisconsin Department of Public Instruction Pass-through Entity Identifying Number(s): 2023-138142-DPI-SB-546, 2023-138005-DPI-SB-546, 2023-138005-DPI-NSL-547, and 2023-138005-DPI-SK_NSLAE-566 Award Period: July 1, 2022 through June 30, 2023 Criteria: According to 2 CFR, Part 200.300 of the Uniform Guidance, a non-federal entity must have the following policies over compliance: cash management (section 200.302(b)(6)), allowability of costs (section 200.302(b)(7)), procurement (section 200.318-.326, reporting (section 200.303), special tests (section 200.303), travel (section 200.475(b)), compensation (section 200.430(a)(1)), and fringe benefits (section 200.431). Condition: Written policies and procedures are not in accordance with the Uniform Guidance. Cause: Sufficient training has not been provided to individuals responsible for the development of written policies and procedures in accordance with the Uniform Guidance. Effect or Potential Effect: Lack of policies and procedures in accordance with the Uniform Guidance could result in noncompliance, disallowed costs, or discontinuance of federal funding. Repeat Finding: No Recommendation: Additional training should be provided to individuals responsible for the development of written policies and procedures in accordance with the Uniform Guidance. Views of Responsible Officials: One City Schools, Inc. agrees with the finding and are working on creating written policies and procedures in accordance with the Uniform Guidance.
Assistance Listing Number(s): 10.553 and 10.555 Name of Federal Program or Cluster: Child Nutrition Cluster Name of Federal Agency: Department of Agriculture Name of Pass-through Entity: Wisconsin Department of Public Instruction Pass-through Entity Identifying Number(s): 2023-138142-DPI-SB-546, 2023-138005-DPI-SB-546, 2023-138005-DPI-NSL-547, and 2023-138005-DPI-SK_NSLAE-566 Award Period: July 1, 2022 through June 30, 2023 Criteria: According to 2 CFR, Part 200.300 of the Uniform Guidance, a non-federal entity must have the following policies over compliance: cash management (section 200.302(b)(6)), allowability of costs (section 200.302(b)(7)), procurement (section 200.318-.326, reporting (section 200.303), special tests (section 200.303), travel (section 200.475(b)), compensation (section 200.430(a)(1)), and fringe benefits (section 200.431). Condition: Written policies and procedures are not in accordance with the Uniform Guidance. Cause: Sufficient training has not been provided to individuals responsible for the development of written policies and procedures in accordance with the Uniform Guidance. Effect or Potential Effect: Lack of policies and procedures in accordance with the Uniform Guidance could result in noncompliance, disallowed costs, or discontinuance of federal funding. Repeat Finding: No Recommendation: Additional training should be provided to individuals responsible for the development of written policies and procedures in accordance with the Uniform Guidance. Views of Responsible Officials: One City Schools, Inc. agrees with the finding and are working on creating written policies and procedures in accordance with the Uniform Guidance.
Assistance Listing Number, Federal Agency, and Program Name - 84.027, U.S. Department of Education, Special Education Cluster 84.425U, U.S. Department of Education, COVID-19 Education Stabilization Fund Federal Award Identification Number and Year - 2023 IDEA Flowthrough 22/23 (Special Education Cluster) 213713 - 2122 (Education Stabilization Fund) Pass-through Entity - Michigan Department of Education Finding Type - Material weakness Repeat Finding - No Criteria - 2 CFR 200.430(i)(1) states that charges to federal awards for salaries and wages must be based on records that accurately reflect work performed. 2 CFR 200.303(a) states that the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the entity is managing the federal award in compliance with the statutes, regulations, and terms and conditions of the award. Condition - The School District's controls did not prevent or detect and correct, in a timely manner, an employee's time being charged to the Special Education Cluster that did not have adequate documentation. Additionally, the School District's internal controls did not detect and correct, in a timely manner, updates to an employee status upon termination for employees charged to the Special Education Cluster and the Education Stabilization Fund. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A - No questioned costs reported. Context - In a sample of 40, we identified that one employee, who was terminated, was inappropriately charged to the Special Education Cluster. The detective controls of the School District identified that the employee lacked appropriate documentation for the time charged and paid, and, thus, the School District requested repayment from the employee. However, the School District's internal controls did not notify the grants department of the overpayment to address the improper charge. In conjunction with tailored procedures to address an identified risk of overpayment for federal grants, one out of seven employees improperly received a payment subsequent to their termination date, which was charged to the Education Stabilization Fund. Based on review of the final payroll audit performed by the School District, there was no overpayment of grant funds. However, we noted that the controls were not operating timely. In this instance, the employee was terminated in March 2023, a final payroll audit was conducted in August 2023, subsequent to the School District's fiscal year, and final payout was not yet disbursed as of the testing date. Cause and Effect - Controls in place did not prevent or detect and correct, in a timely manner, an instance of noncompliance. The controls in place to notify the grants department of an employee overpayment were not effective. Furthermore, the controls in place to update a change in an employee's status, from active to terminated, did not occur timely. The lack of timely controls may result in inappropriate charges to the grant, inappropriate request for reimbursement, repayment of funds to the funder, and the inability to recoup improper payments from the employee. Recommendation - We recommend that the School District review its procedures and controls to ensure terminated employees statuses are updated timely within the system. We further recommend that the grants department receive notification of the final payroll audit results to assess what action, if any, is necessary to ensure compliance with the terms and conditions of the award. Views of Responsible Officials and Corrective Action Plan - The School District concurs with the audit finding. The District has worked to strengthen internal controls to eliminate errors. The District will review its internal controls and provide additional training to staff. The School District is in the process of filling a Project Manager role on the Payroll Team who will be responsible for reviewing employee terminations and identifying potential overpayments. Until the role is filled, the Senior Director of Payroll and CFO will review employee exits quarterly to identify any potential overpayments and move funds to the general fund. New procedures for employee exit were rolled out in July in an effort to improve timely exiting of employees.
Assistance Listing Number, Federal Agency, and Program Name - 84.027, U.S. Department of Education, Special Education Cluster 84.425U, U.S. Department of Education, COVID-19 Education Stabilization Fund Federal Award Identification Number and Year - 2023 IDEA Flowthrough 22/23 (Special Education Cluster) 213713 - 2122 (Education Stabilization Fund) Pass-through Entity - Michigan Department of Education Finding Type - Material weakness Repeat Finding - No Criteria - 2 CFR 200.430(i)(1) states that charges to federal awards for salaries and wages must be based on records that accurately reflect work performed. 2 CFR 200.303(a) states that the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the entity is managing the federal award in compliance with the statutes, regulations, and terms and conditions of the award. Condition - The School District's controls did not prevent or detect and correct, in a timely manner, an employee's time being charged to the Special Education Cluster that did not have adequate documentation. Additionally, the School District's internal controls did not detect and correct, in a timely manner, updates to an employee status upon termination for employees charged to the Special Education Cluster and the Education Stabilization Fund. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A - No questioned costs reported. Context - In a sample of 40, we identified that one employee, who was terminated, was inappropriately charged to the Special Education Cluster. The detective controls of the School District identified that the employee lacked appropriate documentation for the time charged and paid, and, thus, the School District requested repayment from the employee. However, the School District's internal controls did not notify the grants department of the overpayment to address the improper charge. In conjunction with tailored procedures to address an identified risk of overpayment for federal grants, one out of seven employees improperly received a payment subsequent to their termination date, which was charged to the Education Stabilization Fund. Based on review of the final payroll audit performed by the School District, there was no overpayment of grant funds. However, we noted that the controls were not operating timely. In this instance, the employee was terminated in March 2023, a final payroll audit was conducted in August 2023, subsequent to the School District's fiscal year, and final payout was not yet disbursed as of the testing date. Cause and Effect - Controls in place did not prevent or detect and correct, in a timely manner, an instance of noncompliance. The controls in place to notify the grants department of an employee overpayment were not effective. Furthermore, the controls in place to update a change in an employee's status, from active to terminated, did not occur timely. The lack of timely controls may result in inappropriate charges to the grant, inappropriate request for reimbursement, repayment of funds to the funder, and the inability to recoup improper payments from the employee. Recommendation - We recommend that the School District review its procedures and controls to ensure terminated employees statuses are updated timely within the system. We further recommend that the grants department receive notification of the final payroll audit results to assess what action, if any, is necessary to ensure compliance with the terms and conditions of the award. Views of Responsible Officials and Corrective Action Plan - The School District concurs with the audit finding. The District has worked to strengthen internal controls to eliminate errors. The District will review its internal controls and provide additional training to staff. The School District is in the process of filling a Project Manager role on the Payroll Team who will be responsible for reviewing employee terminations and identifying potential overpayments. Until the role is filled, the Senior Director of Payroll and CFO will review employee exits quarterly to identify any potential overpayments and move funds to the general fund. New procedures for employee exit were rolled out in July in an effort to improve timely exiting of employees.
Department of Health and Human Services FFLA #93.087, 90CU0090, 9/30/2020 – 9/29/2023; 90CU0095, 9/30/2018 – 9/29/2024 Enhance Safety of Children Affected by Substance Abuse Activities Allowed and Allowable Costs Significant Deficiency in Internal Control over Compliance Criteria: The Center is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. Charges must be based on records that accurately reflect the work performed with the records meeting the following standards: a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. b) Be incorporated into the office records of the non-Federal entity. c) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. d) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy. e) Comply with the established accounting policies and practices of the non-Federal entity. f) Support the distribution of the employee’s salary or wages among specific activities or cost objectives. g) Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: In our sample of expenditures selected for testing, we noted the following items: a) ClickTime timecard, which tracks federal and nonfederal hours for employees, did not properly reflect the employees total federal and nonfederal hours being paid within the payroll register (3 instances). b) Calculation errors for expenses allocated to the grant (1 instance). Cause: Employees did not enter all nonfederal hours within the ClickTime system and the secondary review of the employee ClickTime timecards did not identify the missing hours. In addition, the secondary review of federal grant expenditure tracking spreadsheet did not identify the calculation errors. Effect: The Center’s controls did not detect or correct the errors identified, which results in a reasonable possibility that the Center could submit disallowed costs under the federal awards and would not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. The program was underallocated. Context: A total non-statistical sample of 60 nonpayroll and payroll transactions were tested which accounted for $119,973 out of $1,006,904 of federal payroll and nonpayroll direct program expenditures. Repeat Finding from Prior Year: Yes, prior year finding 2022-003 Recommendation: We recommend management review the procedures and control processes involving timecards and the federal grant expenditure tracking spreadsheet to ensure compliance with the federal grant. Views of Responsible Officials: Management is in agreement.
Department of Health and Human Services FFLA #93.829, H79SM083331, 5/1/2021 – 12/31/2023 Section 223 Demonstration Programs to Improve Community Mental Health Services Activities Allowed and Allowable Costs Material Weakness in Internal Control over Compliance Criteria: The Center is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. Charges must be based on records that accurately reflect the work performed with the records meeting the following standards: a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. b) Be incorporated into the office records of the non-Federal entity. c) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. d) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy. e) Comply with the established accounting policies and practices of the non-Federal entity. f) Support the distribution of the employee’s salary or wages among specific activities or cost objectives. g) Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: In our sample of expenditures selected for testing, we noted the following items: a) ClickTime timecard, which tracks federal and nonfederal hours for employees, did not properly reflect the employees total federal and nonfederal hours being paid within the payroll register (2 instances). b) Calculation errors for expenses allocated to the grant (2 instances). c) Employee’s overtime hours were not properly tracked in ClickTime (2 instances). d) Employee tracked paid time off under PTO and CCBHC lines in ClickTime (1 instance) causing it to be double tracked. e) Grant was overcharged as it relates to a client’s gym membership (1 instance). Cause: Employees did not enter all nonfederal hours within the ClickTime system and the secondary review of the employee ClickTime timecards did not identify the missing hours, the incorrectly tracked hours, and double tracked time. Also, the secondary review of federal grant expenditure tracking spreadsheet did not identify the calculation errors. In addition, the grant was overcharged for nonpayroll as it relates to a gym membership claimed for a customer of the grant. Effect: The Center’s controls did not detect or correct the errors identified, which results in a reasonable possibility that the Center could submit disallowed costs under the federal awards and would not be able to detect and correct noncompliance in a timely manner. Questioned Costs: The program was overcharged by $127. Context: A total non-statistical sample of 60 payroll and nonpayroll transactions were tested which accounted for $170,945 out of $702,139 of federal payroll and nonpayroll direct program expenditures. Repeat Finding from Prior Year: Yes, prior year finding 2022-005 Recommendation: We recommend management review the procedures and control processes involving timecards and the federal grant expenditure tracking spreadsheet to ensure compliance with the federal grant. Views of Responsible Officials: Management is in agreement.
Department of Health and Human Services FFLA #93.958, 6H79SM085542, 9/30/2021 – 9/29/2023 Block Grants for Community Mental Health Services Activities Allowed and Allowable Costs Significant Deficiency in Internal Control over Compliance Criteria: The Center is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. Charges must be based on records that accurately reflect the work performed with the records meeting the following standards: a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. b) Be incorporated into the office records of the non-Federal entity. c) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. d) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy. e) Comply with the established accounting policies and practices of the non-Federal entity. f) Support the distribution of the employee’s salary or wages among specific activities or cost objectives. g) Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: In our sample of expenditures selected for testing, we noted the following items: a) ClickTime timecard, which tracks federal and nonfederal hours for employees, did not properly reflect the employees total federal and nonfederal hours being paid within the payroll register (2 instances). b) The tracking spreadsheet did not reflect the entire months payroll and instead only included 2 weeks of payroll and benefits which resulted in a calculation error for expenses allocated to the grant (1 instance). Cause: Employees did not enter all nonfederal hours within the ClickTime system and the secondary review of the employee ClickTime timecards did not identify the missing hours. In addition, the secondary review of federal grant expenditure tracking spreadsheet did not identify the missing pay periods. Effect: The Center’s controls did not detect or correct the errors identified, which results in a reasonable possibility that the Center could submit disallowed costs under the federal awards and would not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. The program was underallocated. Context: A total non-statistical sample of 60 nonpayroll and payroll transactions were tested which accounted for $99,320 out of $844,289 of federal payroll and nonpayroll direct program expenditures. Repeat Finding from Prior Year: No. Recommendation: We recommend management review the procedures and control processes involving timecards and the federal grant expenditure tracking spreadsheet to ensure compliance with the federal grant. Views of Responsible Officials: Management is in agreement.
Department of Health and Human Services FFLA #93.958, 6H79SM085542, 9/30/2021 – 9/29/2023 Block Grants for Community Mental Health Services Activities Allowed and Allowable Costs Significant Deficiency in Internal Control over Compliance Criteria: The Center is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. Charges must be based on records that accurately reflect the work performed with the records meeting the following standards: a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. b) Be incorporated into the office records of the non-Federal entity. c) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. d) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy. e) Comply with the established accounting policies and practices of the non-Federal entity. f) Support the distribution of the employee’s salary or wages among specific activities or cost objectives. g) Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: In our sample of expenditures selected for testing, we noted the following items: a) ClickTime timecard, which tracks federal and nonfederal hours for employees, did not properly reflect the employees total federal and nonfederal hours being paid within the payroll register (2 instances). b) The tracking spreadsheet did not reflect the entire months payroll and instead only included 2 weeks of payroll and benefits which resulted in a calculation error for expenses allocated to the grant (1 instance). Cause: Employees did not enter all nonfederal hours within the ClickTime system and the secondary review of the employee ClickTime timecards did not identify the missing hours. In addition, the secondary review of federal grant expenditure tracking spreadsheet did not identify the missing pay periods. Effect: The Center’s controls did not detect or correct the errors identified, which results in a reasonable possibility that the Center could submit disallowed costs under the federal awards and would not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. The program was underallocated. Context: A total non-statistical sample of 60 nonpayroll and payroll transactions were tested which accounted for $99,320 out of $844,289 of federal payroll and nonpayroll direct program expenditures. Repeat Finding from Prior Year: No. Recommendation: We recommend management review the procedures and control processes involving timecards and the federal grant expenditure tracking spreadsheet to ensure compliance with the federal grant. Views of Responsible Officials: Management is in agreement.
Condition The School received funding under various grants during the year that were recorded as ESSER II and ESSER III. During our tests of compliance, it came to our attention that $83,398 of payroll costs charged to the ESSER II were also charged to ESSER III. Additionally, there were 9 of out 40 instances where costs were charged to the grant for hours that were not paid to the employee (unpaid leave). There was also 1 instance out of 40, where management was unable to provide the approved payrate for an employee selected for testing. Criteria Per the Uniform Guidance, the School must maintain an adequate system of internal control over financial reporting in order to initiate, authorize, record, process and report financial data reliably in accordance with generally accepted accounting principles. In accordance with 2 CFR 200.430: (i) 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 both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Cause The School does not have adequate internal controls to document that adequacy of personnel expenses charged to its Federal programs and did not have a process to ensure costs charged to its Federal programs are not duplicated. Effect Unallowed non-payroll and payroll costs could be charged to Federal programs. Recommendation We recommend the School implement procedures to ensure only allowable costs incurred are charged to its Federal programs. Questioned Costs Unknown - $83,398 from sampled testing. Managements Response Management agrees with the finding. See Schedule of Correction Action Plans. Auditor’s Conclusion: Finding remains as stated.
Condition The School received funding under various grants during the year that were recorded as ESSER II and ESSER III. During our tests of compliance, it came to our attention that $83,398 of payroll costs charged to the ESSER II were also charged to ESSER III. Additionally, there were 9 of out 40 instances where costs were charged to the grant for hours that were not paid to the employee (unpaid leave). There was also 1 instance out of 40, where management was unable to provide the approved payrate for an employee selected for testing. Criteria Per the Uniform Guidance, the School must maintain an adequate system of internal control over financial reporting in order to initiate, authorize, record, process and report financial data reliably in accordance with generally accepted accounting principles. In accordance with 2 CFR 200.430: (i) 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 both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Cause The School does not have adequate internal controls to document that adequacy of personnel expenses charged to its Federal programs and did not have a process to ensure costs charged to its Federal programs are not duplicated. Effect Unallowed non-payroll and payroll costs could be charged to Federal programs. Recommendation We recommend the School implement procedures to ensure only allowable costs incurred are charged to its Federal programs. Questioned Costs Unknown - $83,398 from sampled testing. Managements Response Management agrees with the finding. See Schedule of Correction Action Plans. Auditor’s Conclusion: Finding remains as stated.
FINDING 2023-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles 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): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-001. Condition and Context The School Corporation did not have effective internal controls in place to ensure that wages paid to employees were in conformance with the allowable cost principles and only for the benefit or operation of the food service program. A portion of the wages for the CFO/Treasurer, the Director of Operations, the Director of Finance, and two school secretaries were paid from the School Lunch fund. The wages paid from the School Lunch fund were based on fixed percentages and did not provide adequate information to determine if the percentage charged was appropriate. Total wages charged to the program for the above noted employees was $31,617. This amount was considered questioned costs. The ineffective internal controls and noncompliance was limited to the items noted above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. INDIANA STATE BOARD OF ACCOUNTS 15 NORTHWESTERN SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non- Federal entity, not exceeding 100% of compensated activities . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, costs charged to the food service program could not be substantiated. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs Known questioned costs of $31,617 were identified as described above in Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure costs paid from the food service program are adequately documented. INDIANA STATE BOARD OF ACCOUNTS 16 NORTHWESTERN SCHOOL CORPORATION 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 2023-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles 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): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-001. Condition and Context The School Corporation did not have effective internal controls in place to ensure that wages paid to employees were in conformance with the allowable cost principles and only for the benefit or operation of the food service program. A portion of the wages for the CFO/Treasurer, the Director of Operations, the Director of Finance, and two school secretaries were paid from the School Lunch fund. The wages paid from the School Lunch fund were based on fixed percentages and did not provide adequate information to determine if the percentage charged was appropriate. Total wages charged to the program for the above noted employees was $31,617. This amount was considered questioned costs. The ineffective internal controls and noncompliance was limited to the items noted above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. INDIANA STATE BOARD OF ACCOUNTS 15 NORTHWESTERN SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non- Federal entity, not exceeding 100% of compensated activities . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, costs charged to the food service program could not be substantiated. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs Known questioned costs of $31,617 were identified as described above in Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure costs paid from the food service program are adequately documented. INDIANA STATE BOARD OF ACCOUNTS 16 NORTHWESTERN SCHOOL CORPORATION 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 2023-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles 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): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-001. Condition and Context The School Corporation did not have effective internal controls in place to ensure that wages paid to employees were in conformance with the allowable cost principles and only for the benefit or operation of the food service program. A portion of the wages for the CFO/Treasurer, the Director of Operations, the Director of Finance, and two school secretaries were paid from the School Lunch fund. The wages paid from the School Lunch fund were based on fixed percentages and did not provide adequate information to determine if the percentage charged was appropriate. Total wages charged to the program for the above noted employees was $31,617. This amount was considered questioned costs. The ineffective internal controls and noncompliance was limited to the items noted above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. INDIANA STATE BOARD OF ACCOUNTS 15 NORTHWESTERN SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non- Federal entity, not exceeding 100% of compensated activities . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, costs charged to the food service program could not be substantiated. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs Known questioned costs of $31,617 were identified as described above in Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure costs paid from the food service program are adequately documented. INDIANA STATE BOARD OF ACCOUNTS 16 NORTHWESTERN SCHOOL CORPORATION 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 2023-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles 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): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-001. Condition and Context The School Corporation did not have effective internal controls in place to ensure that wages paid to employees were in conformance with the allowable cost principles and only for the benefit or operation of the food service program. A portion of the wages for the CFO/Treasurer, the Director of Operations, the Director of Finance, and two school secretaries were paid from the School Lunch fund. The wages paid from the School Lunch fund were based on fixed percentages and did not provide adequate information to determine if the percentage charged was appropriate. Total wages charged to the program for the above noted employees was $31,617. This amount was considered questioned costs. The ineffective internal controls and noncompliance was limited to the items noted above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. INDIANA STATE BOARD OF ACCOUNTS 15 NORTHWESTERN SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non- Federal entity, not exceeding 100% of compensated activities . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, costs charged to the food service program could not be substantiated. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs Known questioned costs of $31,617 were identified as described above in Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure costs paid from the food service program are adequately documented. INDIANA STATE BOARD OF ACCOUNTS 16 NORTHWESTERN SCHOOL CORPORATION 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 2023-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles 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): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-001. Condition and Context The School Corporation did not have effective internal controls in place to ensure that wages paid to employees were in conformance with the allowable cost principles and only for the benefit or operation of the food service program. A portion of the wages for the CFO/Treasurer, the Director of Operations, the Director of Finance, and two school secretaries were paid from the School Lunch fund. The wages paid from the School Lunch fund were based on fixed percentages and did not provide adequate information to determine if the percentage charged was appropriate. Total wages charged to the program for the above noted employees was $31,617. This amount was considered questioned costs. The ineffective internal controls and noncompliance was limited to the items noted above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. INDIANA STATE BOARD OF ACCOUNTS 15 NORTHWESTERN SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non- Federal entity, not exceeding 100% of compensated activities . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, costs charged to the food service program could not be substantiated. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs Known questioned costs of $31,617 were identified as described above in Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure costs paid from the food service program are adequately documented. INDIANA STATE BOARD OF ACCOUNTS 16 NORTHWESTERN SCHOOL CORPORATION 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 2023-002 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: Central Indiana Educational Service Center Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation was the subrecipient of an Explore, Engage, Experience (3E) Grant from the Central Indiana Educational Service Center (CIESC). Per the award letter received from the CIESC, the School Corporation was allocated $200,000 to hire a district coordinator for 3E initiatives. As only one reimbursement covering the period of August 1, 2022 to September 30, 2022, was requested from the CIESC for the 3E grant, all expenditures associated with the grant were selected for testing to verify the expenditures were in conformance with the applicable cost principles. Expenditures totaling $41,193, were for the salary of the grant lead and a secondary salary. No time and effort documentation was maintained to support the salary amounts charged to the program. As a result, these expenditures were determined not to be in conformance with the applicable cost principles and were considered questioned costs. The lack of internal controls and noncompliance were isolated to the 3E Grant expenditures noted above. 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 . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, costs were not adequately supported by personnel records. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs Known questioned costs of $41,193 were identified, as detailed in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure costs adequately documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 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: Central Indiana Educational Service Center Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation was the subrecipient of an Explore, Engage, Experience (3E) Grant from the Central Indiana Educational Service Center (CIESC). Per the award letter received from the CIESC, the School Corporation was allocated $200,000 to hire a district coordinator for 3E initiatives. As only one reimbursement covering the period of August 1, 2022 to September 30, 2022, was requested from the CIESC for the 3E grant, all expenditures associated with the grant were selected for testing to verify the expenditures were in conformance with the applicable cost principles. Expenditures totaling $41,193, were for the salary of the grant lead and a secondary salary. No time and effort documentation was maintained to support the salary amounts charged to the program. As a result, these expenditures were determined not to be in conformance with the applicable cost principles and were considered questioned costs. The lack of internal controls and noncompliance were isolated to the 3E Grant expenditures noted above. 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 . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, costs were not adequately supported by personnel records. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs Known questioned costs of $41,193 were identified, as detailed in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure costs adequately documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 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: Central Indiana Educational Service Center Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation was the subrecipient of an Explore, Engage, Experience (3E) Grant from the Central Indiana Educational Service Center (CIESC). Per the award letter received from the CIESC, the School Corporation was allocated $200,000 to hire a district coordinator for 3E initiatives. As only one reimbursement covering the period of August 1, 2022 to September 30, 2022, was requested from the CIESC for the 3E grant, all expenditures associated with the grant were selected for testing to verify the expenditures were in conformance with the applicable cost principles. Expenditures totaling $41,193, were for the salary of the grant lead and a secondary salary. No time and effort documentation was maintained to support the salary amounts charged to the program. As a result, these expenditures were determined not to be in conformance with the applicable cost principles and were considered questioned costs. The lack of internal controls and noncompliance were isolated to the 3E Grant expenditures noted above. 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 . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, costs were not adequately supported by personnel records. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs Known questioned costs of $41,193 were identified, as detailed in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure costs adequately documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles 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): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-007. Condition and Context A cash reimbursement is provided to the School Corporation based on meals served under the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. The cash reimbursement is to be used for the benefit of the food service program. INDIANA STATE BOARD OF ACCOUNTS 16 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation did not have internal controls in place over payroll disbursements charged to the food service program. Payroll disbursements were paid without evidence that the detailed report of payroll disbursements was reviewed and approved by another person not involved in the original payroll process. Additionally, a sample of 29 payroll charges were selected for testing. For 3 of the payroll charges selected, timesheets could not be provided for the employees paid within that charge. As such, we could not substantiate the amount paid, $7,298, to these employees out of the grant funds. This amount was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . INDIANA STATE BOARD OF ACCOUNTS 17 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal control, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll charges could not be substantiated. Questioned Costs Known questioned costs of $7,298 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, and develop policies and procedures to ensure costs are adequately documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles 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): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-007. Condition and Context A cash reimbursement is provided to the School Corporation based on meals served under the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. The cash reimbursement is to be used for the benefit of the food service program. INDIANA STATE BOARD OF ACCOUNTS 16 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation did not have internal controls in place over payroll disbursements charged to the food service program. Payroll disbursements were paid without evidence that the detailed report of payroll disbursements was reviewed and approved by another person not involved in the original payroll process. Additionally, a sample of 29 payroll charges were selected for testing. For 3 of the payroll charges selected, timesheets could not be provided for the employees paid within that charge. As such, we could not substantiate the amount paid, $7,298, to these employees out of the grant funds. This amount was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . INDIANA STATE BOARD OF ACCOUNTS 17 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal control, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll charges could not be substantiated. Questioned Costs Known questioned costs of $7,298 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, and develop policies and procedures to ensure costs are adequately documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles 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): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-007. Condition and Context A cash reimbursement is provided to the School Corporation based on meals served under the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. The cash reimbursement is to be used for the benefit of the food service program. INDIANA STATE BOARD OF ACCOUNTS 16 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation did not have internal controls in place over payroll disbursements charged to the food service program. Payroll disbursements were paid without evidence that the detailed report of payroll disbursements was reviewed and approved by another person not involved in the original payroll process. Additionally, a sample of 29 payroll charges were selected for testing. For 3 of the payroll charges selected, timesheets could not be provided for the employees paid within that charge. As such, we could not substantiate the amount paid, $7,298, to these employees out of the grant funds. This amount was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . INDIANA STATE BOARD OF ACCOUNTS 17 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal control, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll charges could not be substantiated. Questioned Costs Known questioned costs of $7,298 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, and develop policies and procedures to ensure costs are adequately documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles 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): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-007. Condition and Context A cash reimbursement is provided to the School Corporation based on meals served under the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. The cash reimbursement is to be used for the benefit of the food service program. INDIANA STATE BOARD OF ACCOUNTS 16 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation did not have internal controls in place over payroll disbursements charged to the food service program. Payroll disbursements were paid without evidence that the detailed report of payroll disbursements was reviewed and approved by another person not involved in the original payroll process. Additionally, a sample of 29 payroll charges were selected for testing. For 3 of the payroll charges selected, timesheets could not be provided for the employees paid within that charge. As such, we could not substantiate the amount paid, $7,298, to these employees out of the grant funds. This amount was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . INDIANA STATE BOARD OF ACCOUNTS 17 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal control, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll charges could not be substantiated. Questioned Costs Known questioned costs of $7,298 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, and develop policies and procedures to ensure costs are adequately documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles 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): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-007. Condition and Context A cash reimbursement is provided to the School Corporation based on meals served under the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. The cash reimbursement is to be used for the benefit of the food service program. INDIANA STATE BOARD OF ACCOUNTS 16 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation did not have internal controls in place over payroll disbursements charged to the food service program. Payroll disbursements were paid without evidence that the detailed report of payroll disbursements was reviewed and approved by another person not involved in the original payroll process. Additionally, a sample of 29 payroll charges were selected for testing. For 3 of the payroll charges selected, timesheets could not be provided for the employees paid within that charge. As such, we could not substantiate the amount paid, $7,298, to these employees out of the grant funds. This amount was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . INDIANA STATE BOARD OF ACCOUNTS 17 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal control, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll charges could not be substantiated. Questioned Costs Known questioned costs of $7,298 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, and develop policies and procedures to ensure costs are adequately documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles 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): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the prior audit report. The prior audit finding number was 2021-007. Condition and Context A cash reimbursement is provided to the School Corporation based on meals served under the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. The cash reimbursement is to be used for the benefit of the food service program. INDIANA STATE BOARD OF ACCOUNTS 16 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation did not have internal controls in place over payroll disbursements charged to the food service program. Payroll disbursements were paid without evidence that the detailed report of payroll disbursements was reviewed and approved by another person not involved in the original payroll process. Additionally, a sample of 29 payroll charges were selected for testing. For 3 of the payroll charges selected, timesheets could not be provided for the employees paid within that charge. As such, we could not substantiate the amount paid, $7,298, to these employees out of the grant funds. This amount was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . INDIANA STATE BOARD OF ACCOUNTS 17 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal control, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll charges could not be substantiated. Questioned Costs Known questioned costs of $7,298 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, and develop policies and procedures to ensure costs are adequately documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 20611-019-PN01, 21611-019-PN01, 22611-019-PN01, 23611-019-PN01, 22611-019-ARP, 21619-019-PN01, 23619-019-PN01, 22619-019-ARP Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context The Individuals with Disabilities Act (IDEA) Special Education - Grants to States program provides grant to states, and through them to Local Educational Agencies (i.e., the School Corporation), to assist them in providing special education and related services to eligible children with disabilities ages three to twenty-one. The IDEA's Special Education - Preschool Grants program provides grants to states, and through them to the Local Educational Agencies to assist them in providing special education and related services to children with disabilities ages three to five and, at the state's discretion, to two-year-old children with disabilities who will turn three during the school year. The School Corporation did not have internal controls in place over payroll disbursements made from the special education funds. Payroll disbursements were paid without evidence that the detailed report of payroll disbursements was reviewed and approved by another person not involved in the original payroll process. Additionally, a sample of 30 payroll claims were selected for testing. For 5 of the payroll claims selected for testing, timesheets could not be provided. As such, we could not substantiate the amount paid, $3,047, to these employees out of the grant funds. This amount was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 23 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which allocated using different allocation bases; or an unallowable activity and a direct or indirect costs activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal control, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 24 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll charges could not be substantiated. Questioned Costs Known questioned costs of $3,047 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, and develop policies and procedures to ensure costs are adequately documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 20611-019-PN01, 21611-019-PN01, 22611-019-PN01, 23611-019-PN01, 22611-019-ARP, 21619-019-PN01, 23619-019-PN01, 22619-019-ARP Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context The Individuals with Disabilities Act (IDEA) Special Education - Grants to States program provides grant to states, and through them to Local Educational Agencies (i.e., the School Corporation), to assist them in providing special education and related services to eligible children with disabilities ages three to twenty-one. The IDEA's Special Education - Preschool Grants program provides grants to states, and through them to the Local Educational Agencies to assist them in providing special education and related services to children with disabilities ages three to five and, at the state's discretion, to two-year-old children with disabilities who will turn three during the school year. The School Corporation did not have internal controls in place over payroll disbursements made from the special education funds. Payroll disbursements were paid without evidence that the detailed report of payroll disbursements was reviewed and approved by another person not involved in the original payroll process. Additionally, a sample of 30 payroll claims were selected for testing. For 5 of the payroll claims selected for testing, timesheets could not be provided. As such, we could not substantiate the amount paid, $3,047, to these employees out of the grant funds. This amount was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 23 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which allocated using different allocation bases; or an unallowable activity and a direct or indirect costs activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal control, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 24 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll charges could not be substantiated. Questioned Costs Known questioned costs of $3,047 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, and develop policies and procedures to ensure costs are adequately documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 20611-019-PN01, 21611-019-PN01, 22611-019-PN01, 23611-019-PN01, 22611-019-ARP, 21619-019-PN01, 23619-019-PN01, 22619-019-ARP Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context The Individuals with Disabilities Act (IDEA) Special Education - Grants to States program provides grant to states, and through them to Local Educational Agencies (i.e., the School Corporation), to assist them in providing special education and related services to eligible children with disabilities ages three to twenty-one. The IDEA's Special Education - Preschool Grants program provides grants to states, and through them to the Local Educational Agencies to assist them in providing special education and related services to children with disabilities ages three to five and, at the state's discretion, to two-year-old children with disabilities who will turn three during the school year. The School Corporation did not have internal controls in place over payroll disbursements made from the special education funds. Payroll disbursements were paid without evidence that the detailed report of payroll disbursements was reviewed and approved by another person not involved in the original payroll process. Additionally, a sample of 30 payroll claims were selected for testing. For 5 of the payroll claims selected for testing, timesheets could not be provided. As such, we could not substantiate the amount paid, $3,047, to these employees out of the grant funds. This amount was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 23 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which allocated using different allocation bases; or an unallowable activity and a direct or indirect costs activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal control, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 24 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll charges could not be substantiated. Questioned Costs Known questioned costs of $3,047 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, and develop policies and procedures to ensure costs are adequately documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 20611-019-PN01, 21611-019-PN01, 22611-019-PN01, 23611-019-PN01, 22611-019-ARP, 21619-019-PN01, 23619-019-PN01, 22619-019-ARP Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context The Individuals with Disabilities Act (IDEA) Special Education - Grants to States program provides grant to states, and through them to Local Educational Agencies (i.e., the School Corporation), to assist them in providing special education and related services to eligible children with disabilities ages three to twenty-one. The IDEA's Special Education - Preschool Grants program provides grants to states, and through them to the Local Educational Agencies to assist them in providing special education and related services to children with disabilities ages three to five and, at the state's discretion, to two-year-old children with disabilities who will turn three during the school year. The School Corporation did not have internal controls in place over payroll disbursements made from the special education funds. Payroll disbursements were paid without evidence that the detailed report of payroll disbursements was reviewed and approved by another person not involved in the original payroll process. Additionally, a sample of 30 payroll claims were selected for testing. For 5 of the payroll claims selected for testing, timesheets could not be provided. As such, we could not substantiate the amount paid, $3,047, to these employees out of the grant funds. This amount was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 23 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which allocated using different allocation bases; or an unallowable activity and a direct or indirect costs activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal control, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 24 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll charges could not be substantiated. Questioned Costs Known questioned costs of $3,047 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, and develop policies and procedures to ensure costs are adequately documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 20611-019-PN01, 21611-019-PN01, 22611-019-PN01, 23611-019-PN01, 22611-019-ARP, 21619-019-PN01, 23619-019-PN01, 22619-019-ARP Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context The Individuals with Disabilities Act (IDEA) Special Education - Grants to States program provides grant to states, and through them to Local Educational Agencies (i.e., the School Corporation), to assist them in providing special education and related services to eligible children with disabilities ages three to twenty-one. The IDEA's Special Education - Preschool Grants program provides grants to states, and through them to the Local Educational Agencies to assist them in providing special education and related services to children with disabilities ages three to five and, at the state's discretion, to two-year-old children with disabilities who will turn three during the school year. The School Corporation did not have internal controls in place over payroll disbursements made from the special education funds. Payroll disbursements were paid without evidence that the detailed report of payroll disbursements was reviewed and approved by another person not involved in the original payroll process. Additionally, a sample of 30 payroll claims were selected for testing. For 5 of the payroll claims selected for testing, timesheets could not be provided. As such, we could not substantiate the amount paid, $3,047, to these employees out of the grant funds. This amount was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 23 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which allocated using different allocation bases; or an unallowable activity and a direct or indirect costs activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal control, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 24 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll charges could not be substantiated. Questioned Costs Known questioned costs of $3,047 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, and develop policies and procedures to ensure costs are adequately documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 20611-019-PN01, 21611-019-PN01, 22611-019-PN01, 23611-019-PN01, 22611-019-ARP, 21619-019-PN01, 23619-019-PN01, 22619-019-ARP Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context The Individuals with Disabilities Act (IDEA) Special Education - Grants to States program provides grant to states, and through them to Local Educational Agencies (i.e., the School Corporation), to assist them in providing special education and related services to eligible children with disabilities ages three to twenty-one. The IDEA's Special Education - Preschool Grants program provides grants to states, and through them to the Local Educational Agencies to assist them in providing special education and related services to children with disabilities ages three to five and, at the state's discretion, to two-year-old children with disabilities who will turn three during the school year. The School Corporation did not have internal controls in place over payroll disbursements made from the special education funds. Payroll disbursements were paid without evidence that the detailed report of payroll disbursements was reviewed and approved by another person not involved in the original payroll process. Additionally, a sample of 30 payroll claims were selected for testing. For 5 of the payroll claims selected for testing, timesheets could not be provided. As such, we could not substantiate the amount paid, $3,047, to these employees out of the grant funds. This amount was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 23 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which allocated using different allocation bases; or an unallowable activity and a direct or indirect costs activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal control, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 24 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll charges could not be substantiated. Questioned Costs Known questioned costs of $3,047 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, and develop policies and procedures to ensure costs are adequately documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 20611-019-PN01, 21611-019-PN01, 22611-019-PN01, 23611-019-PN01, 22611-019-ARP, 21619-019-PN01, 23619-019-PN01, 22619-019-ARP Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context The Individuals with Disabilities Act (IDEA) Special Education - Grants to States program provides grant to states, and through them to Local Educational Agencies (i.e., the School Corporation), to assist them in providing special education and related services to eligible children with disabilities ages three to twenty-one. The IDEA's Special Education - Preschool Grants program provides grants to states, and through them to the Local Educational Agencies to assist them in providing special education and related services to children with disabilities ages three to five and, at the state's discretion, to two-year-old children with disabilities who will turn three during the school year. The School Corporation did not have internal controls in place over payroll disbursements made from the special education funds. Payroll disbursements were paid without evidence that the detailed report of payroll disbursements was reviewed and approved by another person not involved in the original payroll process. Additionally, a sample of 30 payroll claims were selected for testing. For 5 of the payroll claims selected for testing, timesheets could not be provided. As such, we could not substantiate the amount paid, $3,047, to these employees out of the grant funds. This amount was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 23 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which allocated using different allocation bases; or an unallowable activity and a direct or indirect costs activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal control, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 24 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll charges could not be substantiated. Questioned Costs Known questioned costs of $3,047 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, and develop policies and procedures to ensure costs are adequately documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-007 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context The Elementary and Secondary School Emergency Relief (ESSER) Fund provided funding to states and school districts to combat the effects of the coronavirus, help safely reopen and sustain the safe operation of schools, and to address the impact of the coronavirus pandemic on the nation's students. States were required to subgrant a portion of their ESSER allocation to Local Educational Agencies (LEA). Prior to the LEAs receiving their respective subgrants, the LEAs were required to complete an application for ARP ESSER funding, which was submitted to the Indiana Department of Education, the pass-through entity for approval. The application included a district level budget identifying how the LEA intended to spend program funds. The School Corporation did not have internal controls in place over payroll disbursements charged to the ESSER grant funds. Payroll disbursements were paid without evidence that the detailed report of payroll disbursements was reviewed and approved by another person not involved in the original payroll process. Additionally, a sample of 40 payroll disbursements were selected for testing. For 1 payroll disbursement selected for testing, the employee's timesheet could not be provided. As such, we could not substantiate the amount paid, $1,094, out of the grant funds. This amount was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: INDIANA STATE BOARD OF ACCOUNTS 27 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which allocated using different allocation bases; or an unallowable activity and a direct or indirect costs activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal control, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll charges could not be substantiated. Questioned Costs Known questioned costs of $1,094 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure costs are adequately documented. INDIANA STATE BOARD OF ACCOUNTS 28 MADISON-GRANT UNITED SCHOOL CORPORATION 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 2023-007 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context The Elementary and Secondary School Emergency Relief (ESSER) Fund provided funding to states and school districts to combat the effects of the coronavirus, help safely reopen and sustain the safe operation of schools, and to address the impact of the coronavirus pandemic on the nation's students. States were required to subgrant a portion of their ESSER allocation to Local Educational Agencies (LEA). Prior to the LEAs receiving their respective subgrants, the LEAs were required to complete an application for ARP ESSER funding, which was submitted to the Indiana Department of Education, the pass-through entity for approval. The application included a district level budget identifying how the LEA intended to spend program funds. The School Corporation did not have internal controls in place over payroll disbursements charged to the ESSER grant funds. Payroll disbursements were paid without evidence that the detailed report of payroll disbursements was reviewed and approved by another person not involved in the original payroll process. Additionally, a sample of 40 payroll disbursements were selected for testing. For 1 payroll disbursement selected for testing, the employee's timesheet could not be provided. As such, we could not substantiate the amount paid, $1,094, out of the grant funds. This amount was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: INDIANA STATE BOARD OF ACCOUNTS 27 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which allocated using different allocation bases; or an unallowable activity and a direct or indirect costs activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal control, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll charges could not be substantiated. Questioned Costs Known questioned costs of $1,094 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure costs are adequately documented. INDIANA STATE BOARD OF ACCOUNTS 28 MADISON-GRANT UNITED SCHOOL CORPORATION 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 2023-007 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context The Elementary and Secondary School Emergency Relief (ESSER) Fund provided funding to states and school districts to combat the effects of the coronavirus, help safely reopen and sustain the safe operation of schools, and to address the impact of the coronavirus pandemic on the nation's students. States were required to subgrant a portion of their ESSER allocation to Local Educational Agencies (LEA). Prior to the LEAs receiving their respective subgrants, the LEAs were required to complete an application for ARP ESSER funding, which was submitted to the Indiana Department of Education, the pass-through entity for approval. The application included a district level budget identifying how the LEA intended to spend program funds. The School Corporation did not have internal controls in place over payroll disbursements charged to the ESSER grant funds. Payroll disbursements were paid without evidence that the detailed report of payroll disbursements was reviewed and approved by another person not involved in the original payroll process. Additionally, a sample of 40 payroll disbursements were selected for testing. For 1 payroll disbursement selected for testing, the employee's timesheet could not be provided. As such, we could not substantiate the amount paid, $1,094, out of the grant funds. This amount was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: INDIANA STATE BOARD OF ACCOUNTS 27 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which allocated using different allocation bases; or an unallowable activity and a direct or indirect costs activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal control, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll charges could not be substantiated. Questioned Costs Known questioned costs of $1,094 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure costs are adequately documented. INDIANA STATE BOARD OF ACCOUNTS 28 MADISON-GRANT UNITED SCHOOL CORPORATION 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 2023-007 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context The Elementary and Secondary School Emergency Relief (ESSER) Fund provided funding to states and school districts to combat the effects of the coronavirus, help safely reopen and sustain the safe operation of schools, and to address the impact of the coronavirus pandemic on the nation's students. States were required to subgrant a portion of their ESSER allocation to Local Educational Agencies (LEA). Prior to the LEAs receiving their respective subgrants, the LEAs were required to complete an application for ARP ESSER funding, which was submitted to the Indiana Department of Education, the pass-through entity for approval. The application included a district level budget identifying how the LEA intended to spend program funds. The School Corporation did not have internal controls in place over payroll disbursements charged to the ESSER grant funds. Payroll disbursements were paid without evidence that the detailed report of payroll disbursements was reviewed and approved by another person not involved in the original payroll process. Additionally, a sample of 40 payroll disbursements were selected for testing. For 1 payroll disbursement selected for testing, the employee's timesheet could not be provided. As such, we could not substantiate the amount paid, $1,094, out of the grant funds. This amount was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: INDIANA STATE BOARD OF ACCOUNTS 27 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which allocated using different allocation bases; or an unallowable activity and a direct or indirect costs activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal control, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll charges could not be substantiated. Questioned Costs Known questioned costs of $1,094 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure costs are adequately documented. INDIANA STATE BOARD OF ACCOUNTS 28 MADISON-GRANT UNITED SCHOOL CORPORATION 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 2023-007 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context The Elementary and Secondary School Emergency Relief (ESSER) Fund provided funding to states and school districts to combat the effects of the coronavirus, help safely reopen and sustain the safe operation of schools, and to address the impact of the coronavirus pandemic on the nation's students. States were required to subgrant a portion of their ESSER allocation to Local Educational Agencies (LEA). Prior to the LEAs receiving their respective subgrants, the LEAs were required to complete an application for ARP ESSER funding, which was submitted to the Indiana Department of Education, the pass-through entity for approval. The application included a district level budget identifying how the LEA intended to spend program funds. The School Corporation did not have internal controls in place over payroll disbursements charged to the ESSER grant funds. Payroll disbursements were paid without evidence that the detailed report of payroll disbursements was reviewed and approved by another person not involved in the original payroll process. Additionally, a sample of 40 payroll disbursements were selected for testing. For 1 payroll disbursement selected for testing, the employee's timesheet could not be provided. As such, we could not substantiate the amount paid, $1,094, out of the grant funds. This amount was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: INDIANA STATE BOARD OF ACCOUNTS 27 MADISON-GRANT UNITED SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which allocated using different allocation bases; or an unallowable activity and a direct or indirect costs activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal control, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll charges could not be substantiated. Questioned Costs Known questioned costs of $1,094 were identified as noted in the Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure costs are adequately documented. INDIANA STATE BOARD OF ACCOUNTS 28 MADISON-GRANT UNITED SCHOOL CORPORATION 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.
2023-002 - Significant Deficiency - Coronavirus State & Local Fiscal Recovery Funds - Lack of Written Policies and Procedures including Suspension & Debarment and Conflict of Interest Federal Expenditures Compliance Requirement: Procurement and Written Policies ALN Number: 21.027 Criteria: Title 2 of the U.S. Code of Federal Regulations (CFR) 180.300 (January 1, 2021) requires non-federal entities to verify an entity is not excluded or disqualified prior to entering into a covered transaction by, "(a) Checking SAM Exclusions; or (b) Collecting a certification from that [entity]; or (c) Adding a clause or condition to the covered transaction with that [entity]." A good internal control plan requires adequate procedures to ensure the County has proper procedures in place to verify that contractors paid with grant funds are not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities. The Uniform Guidance requires nonfederal entities that receive federal awards to establish written policies, procedures, and or/standards of conduct, except if excluded in compliance supplement. There are four basic reasons for creating an internal control system through defining and documenting processes with well-written policies and procedures: 1. Compliance 2. Operational Needs 2. Managing Risks 4. Continuous Improvement Complying with laws and regulations should be a critical funciton of the County. Well-defined and documented processes (i.e. procedures, training manuals) along with records that demonstrate process capability can make evident an effective internal control system and compliance to Federal guidelines. Another important role of documentation of procedures is to ensure processes fundamental to the County are properly guided by County's officials, and are consistent way that meets the County's needs, and that are important related information and data are captured and communicated. Documentation of procedures are important for controlling process, documenting the standard work that was performed and training new employees. Condition: The County lacks certain written policies and procedures required by Uniform Guidance. Although the County has an outdated Accounting Policy, certain policies for Federal Expenditures need to be updated and added. These include: 1. Financial management (200.302) 2. Payment (200.305) 3. General procurement standards (200.318) 4. Competition (200.319) 5. Methods of procurement to be followed (200.320) 6. Compensation - personal services (200.430) 7. Compensation - fringe benefits (200.431) 8. Relocation costs of employees (200.464) 9. Travel costs (200.474) Cause: Appears to be the result of a lack of training coupled with limited staffing and resources. Questioned Costs: None Context for Calculation of Questioned Costs: None Effect: Without adequate procedures to ensure contractors are not suspended, debarred or otherwise excluded from or ineligible for participation in Federal programs or activities, there is an increased risk for the misuse of Federal funds and noncompliance with Federal regulations. Recommendation: We recommend the County implement proceduresto ensure, prior to entering into a covered transaction, that a contractor in not syspended, bebarred, or otherwise excluded from or ineligible for participation in Federal programs or activities, and that procedures is adequately documented. Furthermore, the County should familiarize themselves with the Uniform Guidance and implement the following: 1. Develop and document all of its significant processes over federal awards. 2. Make the written policies and procedures available to all personnel and departments within the County. 3. Ensure the written policies and procedures are accurate, complete, and current at all times (The Board of County Commissioners should update the policy on an annual basis.) 4. Revise policies and procedures for changes in business processes and policies over federal awards. 5. Communicate significant changes to all affected personnel immediately to ensure they are aware of any revisions to their responsibilities to the federal award. 6. Document policies and procedures to facilitate training and provide guidelines relative to federal awards for changes in personnel.
FINDING #2023-002: FEDERAL COMPLIANCE – TIME AND EFFORT REPORTING (50000) AL Number and Title: 84.010 – Title I, Part A, Basic Grants Low-Income and Neglected 84.027 – IDEA Basic Local Assistance Entitlement, Part B, Sec. 611 84.425 – Elementary and Secondary School Emergency Relief II (ESSER II) Fund 84.425 – Elementary and Secondary School Emergency Relief III (ESSER III) Fund Federal Grantor Name: U.S. Department of Education; Passed through California Department of Education Criteria: Federal regulation 2 CFR §200.430 states that “charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.” Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; • Be incorporated into the official records of the non‐Federal entity. • Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities. • Encompass both federally assisted and all other activities compensated by the non‐Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity’s written policy; • Comply with the established accounting policies and practices of the non‐Federal entity. • 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. • Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a representative sample of 19 employees with salaries and benefits charged to the federal programs noted above during the 2022-23 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. This condition was present in 12 out of the 19 sample selections. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR §200.430. Questioned Cost: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs. Repeat Finding: This is a repeat of Finding #2022-002. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single-funded employees and monthly certifications for multi-funded employees. Corrective Action Plan: The Views of Responsible Officials and Corrective Action Plan are included on page 82. To be provided by client, signed on letterhead.
FINDING #2023-002: FEDERAL COMPLIANCE – TIME AND EFFORT REPORTING (50000) AL Number and Title: 84.010 – Title I, Part A, Basic Grants Low-Income and Neglected 84.027 – IDEA Basic Local Assistance Entitlement, Part B, Sec. 611 84.425 – Elementary and Secondary School Emergency Relief II (ESSER II) Fund 84.425 – Elementary and Secondary School Emergency Relief III (ESSER III) Fund Federal Grantor Name: U.S. Department of Education; Passed through California Department of Education Criteria: Federal regulation 2 CFR §200.430 states that “charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.” Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; • Be incorporated into the official records of the non‐Federal entity. • Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities. • Encompass both federally assisted and all other activities compensated by the non‐Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity’s written policy; • Comply with the established accounting policies and practices of the non‐Federal entity. • 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. • Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a representative sample of 19 employees with salaries and benefits charged to the federal programs noted above during the 2022-23 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. This condition was present in 12 out of the 19 sample selections. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR §200.430. Questioned Cost: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs. Repeat Finding: This is a repeat of Finding #2022-002. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single-funded employees and monthly certifications for multi-funded employees. Corrective Action Plan: The Views of Responsible Officials and Corrective Action Plan are included on page 82. To be provided by client, signed on letterhead.
FINDING #2023-002: FEDERAL COMPLIANCE – TIME AND EFFORT REPORTING (50000) AL Number and Title: 84.010 – Title I, Part A, Basic Grants Low-Income and Neglected 84.027 – IDEA Basic Local Assistance Entitlement, Part B, Sec. 611 84.425 – Elementary and Secondary School Emergency Relief II (ESSER II) Fund 84.425 – Elementary and Secondary School Emergency Relief III (ESSER III) Fund Federal Grantor Name: U.S. Department of Education; Passed through California Department of Education Criteria: Federal regulation 2 CFR §200.430 states that “charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.” Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; • Be incorporated into the official records of the non‐Federal entity. • Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities. • Encompass both federally assisted and all other activities compensated by the non‐Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity’s written policy; • Comply with the established accounting policies and practices of the non‐Federal entity. • 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. • Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a representative sample of 19 employees with salaries and benefits charged to the federal programs noted above during the 2022-23 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. This condition was present in 12 out of the 19 sample selections. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR §200.430. Questioned Cost: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs. Repeat Finding: This is a repeat of Finding #2022-002. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single-funded employees and monthly certifications for multi-funded employees. Corrective Action Plan: The Views of Responsible Officials and Corrective Action Plan are included on page 82. To be provided by client, signed on letterhead.
FINDING #2023-002: FEDERAL COMPLIANCE – TIME AND EFFORT REPORTING (50000) AL Number and Title: 84.010 – Title I, Part A, Basic Grants Low-Income and Neglected 84.027 – IDEA Basic Local Assistance Entitlement, Part B, Sec. 611 84.425 – Elementary and Secondary School Emergency Relief II (ESSER II) Fund 84.425 – Elementary and Secondary School Emergency Relief III (ESSER III) Fund Federal Grantor Name: U.S. Department of Education; Passed through California Department of Education Criteria: Federal regulation 2 CFR §200.430 states that “charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.” Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; • Be incorporated into the official records of the non‐Federal entity. • Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities. • Encompass both federally assisted and all other activities compensated by the non‐Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity’s written policy; • Comply with the established accounting policies and practices of the non‐Federal entity. • 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. • Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a representative sample of 19 employees with salaries and benefits charged to the federal programs noted above during the 2022-23 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. This condition was present in 12 out of the 19 sample selections. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR §200.430. Questioned Cost: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs. Repeat Finding: This is a repeat of Finding #2022-002. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single-funded employees and monthly certifications for multi-funded employees. Corrective Action Plan: The Views of Responsible Officials and Corrective Action Plan are included on page 82. To be provided by client, signed on letterhead.
FINDING #2023-002: FEDERAL COMPLIANCE – TIME AND EFFORT REPORTING (50000) AL Number and Title: 84.010 – Title I, Part A, Basic Grants Low-Income and Neglected 84.027 – IDEA Basic Local Assistance Entitlement, Part B, Sec. 611 84.425 – Elementary and Secondary School Emergency Relief II (ESSER II) Fund 84.425 – Elementary and Secondary School Emergency Relief III (ESSER III) Fund Federal Grantor Name: U.S. Department of Education; Passed through California Department of Education Criteria: Federal regulation 2 CFR §200.430 states that “charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.” Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; • Be incorporated into the official records of the non‐Federal entity. • Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities. • Encompass both federally assisted and all other activities compensated by the non‐Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity’s written policy; • Comply with the established accounting policies and practices of the non‐Federal entity. • 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. • Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a representative sample of 19 employees with salaries and benefits charged to the federal programs noted above during the 2022-23 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. This condition was present in 12 out of the 19 sample selections. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR §200.430. Questioned Cost: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs. Repeat Finding: This is a repeat of Finding #2022-002. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single-funded employees and monthly certifications for multi-funded employees. Corrective Action Plan: The Views of Responsible Officials and Corrective Action Plan are included on page 82. To be provided by client, signed on letterhead.
FINDING #2023-002: FEDERAL COMPLIANCE – TIME AND EFFORT REPORTING (50000) AL Number and Title: 84.010 – Title I, Part A, Basic Grants Low-Income and Neglected 84.027 – IDEA Basic Local Assistance Entitlement, Part B, Sec. 611 84.425 – Elementary and Secondary School Emergency Relief II (ESSER II) Fund 84.425 – Elementary and Secondary School Emergency Relief III (ESSER III) Fund Federal Grantor Name: U.S. Department of Education; Passed through California Department of Education Criteria: Federal regulation 2 CFR §200.430 states that “charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.” Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; • Be incorporated into the official records of the non‐Federal entity. • Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities. • Encompass both federally assisted and all other activities compensated by the non‐Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity’s written policy; • Comply with the established accounting policies and practices of the non‐Federal entity. • 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. • Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a representative sample of 19 employees with salaries and benefits charged to the federal programs noted above during the 2022-23 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. This condition was present in 12 out of the 19 sample selections. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR §200.430. Questioned Cost: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs. Repeat Finding: This is a repeat of Finding #2022-002. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single-funded employees and monthly certifications for multi-funded employees. Corrective Action Plan: The Views of Responsible Officials and Corrective Action Plan are included on page 82. To be provided by client, signed on letterhead.
FINDING #2023-002: FEDERAL COMPLIANCE – TIME AND EFFORT REPORTING (50000) AL Number and Title: 84.010 – Title I, Part A, Basic Grants Low-Income and Neglected 84.027 – IDEA Basic Local Assistance Entitlement, Part B, Sec. 611 84.425 – Elementary and Secondary School Emergency Relief II (ESSER II) Fund 84.425 – Elementary and Secondary School Emergency Relief III (ESSER III) Fund Federal Grantor Name: U.S. Department of Education; Passed through California Department of Education Criteria: Federal regulation 2 CFR §200.430 states that “charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.” Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; • Be incorporated into the official records of the non‐Federal entity. • Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities. • Encompass both federally assisted and all other activities compensated by the non‐Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity’s written policy; • Comply with the established accounting policies and practices of the non‐Federal entity. • 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. • Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a representative sample of 19 employees with salaries and benefits charged to the federal programs noted above during the 2022-23 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. This condition was present in 12 out of the 19 sample selections. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR §200.430. Questioned Cost: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs. Repeat Finding: This is a repeat of Finding #2022-002. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single-funded employees and monthly certifications for multi-funded employees. Corrective Action Plan: The Views of Responsible Officials and Corrective Action Plan are included on page 82. To be provided by client, signed on letterhead.
FINDING #2023-002: FEDERAL COMPLIANCE – TIME AND EFFORT REPORTING (50000) AL Number and Title: 84.010 – Title I, Part A, Basic Grants Low-Income and Neglected 84.027 – IDEA Basic Local Assistance Entitlement, Part B, Sec. 611 84.425 – Elementary and Secondary School Emergency Relief II (ESSER II) Fund 84.425 – Elementary and Secondary School Emergency Relief III (ESSER III) Fund Federal Grantor Name: U.S. Department of Education; Passed through California Department of Education Criteria: Federal regulation 2 CFR §200.430 states that “charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.” Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; • Be incorporated into the official records of the non‐Federal entity. • Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities. • Encompass both federally assisted and all other activities compensated by the non‐Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity’s written policy; • Comply with the established accounting policies and practices of the non‐Federal entity. • 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. • Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a representative sample of 19 employees with salaries and benefits charged to the federal programs noted above during the 2022-23 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. This condition was present in 12 out of the 19 sample selections. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR §200.430. Questioned Cost: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs. Repeat Finding: This is a repeat of Finding #2022-002. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single-funded employees and monthly certifications for multi-funded employees. Corrective Action Plan: The Views of Responsible Officials and Corrective Action Plan are included on page 82. To be provided by client, signed on letterhead.
FINDING #2023-002: FEDERAL COMPLIANCE – TIME AND EFFORT REPORTING (50000) AL Number and Title: 84.010 – Title I, Part A, Basic Grants Low-Income and Neglected 84.027 – IDEA Basic Local Assistance Entitlement, Part B, Sec. 611 84.425 – Elementary and Secondary School Emergency Relief II (ESSER II) Fund 84.425 – Elementary and Secondary School Emergency Relief III (ESSER III) Fund Federal Grantor Name: U.S. Department of Education; Passed through California Department of Education Criteria: Federal regulation 2 CFR §200.430 states that “charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.” Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; • Be incorporated into the official records of the non‐Federal entity. • Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities. • Encompass both federally assisted and all other activities compensated by the non‐Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity’s written policy; • Comply with the established accounting policies and practices of the non‐Federal entity. • 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. • Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a representative sample of 19 employees with salaries and benefits charged to the federal programs noted above during the 2022-23 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. This condition was present in 12 out of the 19 sample selections. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR §200.430. Questioned Cost: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs. Repeat Finding: This is a repeat of Finding #2022-002. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single-funded employees and monthly certifications for multi-funded employees. Corrective Action Plan: The Views of Responsible Officials and Corrective Action Plan are included on page 82. To be provided by client, signed on letterhead.
Finding 2023-009: Time Accounting (50000) Program Identification: Federal Agency: U.S. Department of Education Pass‐through Entity: California Department of Education Program Names: Title I, Part A Grants: Title I, Part A, Basic Grants Local-Income and Neglected (AL No. 84.010) ESEA, School Improvement Grant Funding for LEAs (AL No. 84.010) Program Names: Education Stabilization Funds: Elementary and Secondary School Emergency Relief II Fund (AL No. 84.425) Elementary and Secondary School Emergency Relief III Fund (AL No. 84.425) Expand Learning Opportunities Grant ESSER II State Reserve (AL No. 84.425) Criteria: 2 CFR, section 200.430 states, in part: (i) 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: (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. 2 CFR, section 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. CSAM Procedure 905 states, in part: Periodic (Semiannual) Certification Employees who work solely on a single federal award or cost objective need only complete a periodic certification. The periodic certification must: • Be prepared at least semiannually. • Be signed by the employee or the supervisory official having firsthand knowledge of the work performed by the employee. • State the employee worked solely on that single federal program or cost objective during the period covered by the certification. Where multiple employees work on the same cost objective, a blanket certification may be used as the documentation for all employees who worked on the cost objective. Personnel Activity Report Except as provided in “Substitute Systems for Time Accounting” … employees who work on multiple activities or cost objectives of which at least one is federal must complete a personnel activity report (PAR) or equivalent documentation. A PAR may be as detailed as a document that identifies the employee’s activity daily by hours, or it may be as simple as a report of the total hours or percentage of hours spent in each categorical program or cost objective. The level of detail can generally be determined by the diversity and variation of the employee’s work activities. The safest approach is to provide more documentation rather than less. Condition: The District lacks procedures and controls to ensure that employees being funded from federal funds complete their personal activity reports monthly as well as ensuring semi-annual time certifications are completed in a timely manner. Context: Our total sample consisted of 44 employees, and for all 44 employees it took the District months to provide time accounting documentation. In some instances, the District had to go back and prepare the time accounting documentation, because some of the employees sampled were no longer employed by the District. Questioned Costs: No questioned costs. Cause: District lacks adequate controls to ensure that time certification documentation is prepared and maintained to support all employees who are paid with federal funds. Effect: Lack of proper controls to ensure that time certification documentation is prepared may result in the District having to go back and recreate documentation for individuals who are no longer employed by the District. In addition, lack of time documentation may result in a questioned cost. Recommendation: We recommend that the District comply with 2 CFR, section 200.303, and CSAM Procedure 905, which require that employee time certification forms be maintained for employees who charge time to federal program. Views of Responsible Officials: The State and Federal Programs Department at the recommendation of FPM began Time and Effort Procedures training on December 6, 2023, with the Office Managers and Administrative Secretaries to emphasize the critical importance of accurate time certification records for federal fund expenditures. In addition, the State and Federal Programs (SFP) Department and Budget Department are collaborating on identifying the Employees charged to Title I. Currently the Employee list for July 2023- December 2023 have been provided to SFP by the Budget Department. SFP has sent the Time and Effort forms to the Departments: Leads, Office Managers with a deadline for collection in January. The district commits to collecting semi-annual time and effort documentation within 10 business days of when the effort window closes.
Finding 2023-009: Time Accounting (50000) Program Identification: Federal Agency: U.S. Department of Education Pass‐through Entity: California Department of Education Program Names: Title I, Part A Grants: Title I, Part A, Basic Grants Local-Income and Neglected (AL No. 84.010) ESEA, School Improvement Grant Funding for LEAs (AL No. 84.010) Program Names: Education Stabilization Funds: Elementary and Secondary School Emergency Relief II Fund (AL No. 84.425) Elementary and Secondary School Emergency Relief III Fund (AL No. 84.425) Expand Learning Opportunities Grant ESSER II State Reserve (AL No. 84.425) Criteria: 2 CFR, section 200.430 states, in part: (i) 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: (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. 2 CFR, section 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. CSAM Procedure 905 states, in part: Periodic (Semiannual) Certification Employees who work solely on a single federal award or cost objective need only complete a periodic certification. The periodic certification must: • Be prepared at least semiannually. • Be signed by the employee or the supervisory official having firsthand knowledge of the work performed by the employee. • State the employee worked solely on that single federal program or cost objective during the period covered by the certification. Where multiple employees work on the same cost objective, a blanket certification may be used as the documentation for all employees who worked on the cost objective. Personnel Activity Report Except as provided in “Substitute Systems for Time Accounting” … employees who work on multiple activities or cost objectives of which at least one is federal must complete a personnel activity report (PAR) or equivalent documentation. A PAR may be as detailed as a document that identifies the employee’s activity daily by hours, or it may be as simple as a report of the total hours or percentage of hours spent in each categorical program or cost objective. The level of detail can generally be determined by the diversity and variation of the employee’s work activities. The safest approach is to provide more documentation rather than less. Condition: The District lacks procedures and controls to ensure that employees being funded from federal funds complete their personal activity reports monthly as well as ensuring semi-annual time certifications are completed in a timely manner. Context: Our total sample consisted of 44 employees, and for all 44 employees it took the District months to provide time accounting documentation. In some instances, the District had to go back and prepare the time accounting documentation, because some of the employees sampled were no longer employed by the District. Questioned Costs: No questioned costs. Cause: District lacks adequate controls to ensure that time certification documentation is prepared and maintained to support all employees who are paid with federal funds. Effect: Lack of proper controls to ensure that time certification documentation is prepared may result in the District having to go back and recreate documentation for individuals who are no longer employed by the District. In addition, lack of time documentation may result in a questioned cost. Recommendation: We recommend that the District comply with 2 CFR, section 200.303, and CSAM Procedure 905, which require that employee time certification forms be maintained for employees who charge time to federal program. Views of Responsible Officials: The State and Federal Programs Department at the recommendation of FPM began Time and Effort Procedures training on December 6, 2023, with the Office Managers and Administrative Secretaries to emphasize the critical importance of accurate time certification records for federal fund expenditures. In addition, the State and Federal Programs (SFP) Department and Budget Department are collaborating on identifying the Employees charged to Title I. Currently the Employee list for July 2023- December 2023 have been provided to SFP by the Budget Department. SFP has sent the Time and Effort forms to the Departments: Leads, Office Managers with a deadline for collection in January. The district commits to collecting semi-annual time and effort documentation within 10 business days of when the effort window closes.
Finding 2023-009: Time Accounting (50000) Program Identification: Federal Agency: U.S. Department of Education Pass‐through Entity: California Department of Education Program Names: Title I, Part A Grants: Title I, Part A, Basic Grants Local-Income and Neglected (AL No. 84.010) ESEA, School Improvement Grant Funding for LEAs (AL No. 84.010) Program Names: Education Stabilization Funds: Elementary and Secondary School Emergency Relief II Fund (AL No. 84.425) Elementary and Secondary School Emergency Relief III Fund (AL No. 84.425) Expand Learning Opportunities Grant ESSER II State Reserve (AL No. 84.425) Criteria: 2 CFR, section 200.430 states, in part: (i) 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: (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. 2 CFR, section 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. CSAM Procedure 905 states, in part: Periodic (Semiannual) Certification Employees who work solely on a single federal award or cost objective need only complete a periodic certification. The periodic certification must: • Be prepared at least semiannually. • Be signed by the employee or the supervisory official having firsthand knowledge of the work performed by the employee. • State the employee worked solely on that single federal program or cost objective during the period covered by the certification. Where multiple employees work on the same cost objective, a blanket certification may be used as the documentation for all employees who worked on the cost objective. Personnel Activity Report Except as provided in “Substitute Systems for Time Accounting” … employees who work on multiple activities or cost objectives of which at least one is federal must complete a personnel activity report (PAR) or equivalent documentation. A PAR may be as detailed as a document that identifies the employee’s activity daily by hours, or it may be as simple as a report of the total hours or percentage of hours spent in each categorical program or cost objective. The level of detail can generally be determined by the diversity and variation of the employee’s work activities. The safest approach is to provide more documentation rather than less. Condition: The District lacks procedures and controls to ensure that employees being funded from federal funds complete their personal activity reports monthly as well as ensuring semi-annual time certifications are completed in a timely manner. Context: Our total sample consisted of 44 employees, and for all 44 employees it took the District months to provide time accounting documentation. In some instances, the District had to go back and prepare the time accounting documentation, because some of the employees sampled were no longer employed by the District. Questioned Costs: No questioned costs. Cause: District lacks adequate controls to ensure that time certification documentation is prepared and maintained to support all employees who are paid with federal funds. Effect: Lack of proper controls to ensure that time certification documentation is prepared may result in the District having to go back and recreate documentation for individuals who are no longer employed by the District. In addition, lack of time documentation may result in a questioned cost. Recommendation: We recommend that the District comply with 2 CFR, section 200.303, and CSAM Procedure 905, which require that employee time certification forms be maintained for employees who charge time to federal program. Views of Responsible Officials: The State and Federal Programs Department at the recommendation of FPM began Time and Effort Procedures training on December 6, 2023, with the Office Managers and Administrative Secretaries to emphasize the critical importance of accurate time certification records for federal fund expenditures. In addition, the State and Federal Programs (SFP) Department and Budget Department are collaborating on identifying the Employees charged to Title I. Currently the Employee list for July 2023- December 2023 have been provided to SFP by the Budget Department. SFP has sent the Time and Effort forms to the Departments: Leads, Office Managers with a deadline for collection in January. The district commits to collecting semi-annual time and effort documentation within 10 business days of when the effort window closes.