Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), 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, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.
Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), 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, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.
Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), 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, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.
FINDING 2022-003 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Number and Year (or Other Identifying Number): SY 20-21 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Payroll disbursements for 3 of 11 employees tested, were not supported by the School Corporation's records. The hourly rate for 2 employees tested did not agree to the rate stated in the Board approved salary schedule. The School Corporation could not provide documentation or other justification to support their rate of pay. Additionally, the School Corporation did not retain time records for audit for the Food Service Director after leave of employment. The lack of internal controls and noncompliance were isolated to fiscal year 2020-2021. INDIANA STATE BOARD OF ACCOUNTS 16 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 17 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective system of internal controls, as well as adequately document costs, enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Number and Year (or Other Identifying Number): SY 20-21 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Payroll disbursements for 3 of 11 employees tested, were not supported by the School Corporation's records. The hourly rate for 2 employees tested did not agree to the rate stated in the Board approved salary schedule. The School Corporation could not provide documentation or other justification to support their rate of pay. Additionally, the School Corporation did not retain time records for audit for the Food Service Director after leave of employment. The lack of internal controls and noncompliance were isolated to fiscal year 2020-2021. INDIANA STATE BOARD OF ACCOUNTS 16 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 17 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective system of internal controls, as well as adequately document costs, enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Number and Year (or Other Identifying Number): SY 20-21 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Payroll disbursements for 3 of 11 employees tested, were not supported by the School Corporation's records. The hourly rate for 2 employees tested did not agree to the rate stated in the Board approved salary schedule. The School Corporation could not provide documentation or other justification to support their rate of pay. Additionally, the School Corporation did not retain time records for audit for the Food Service Director after leave of employment. The lack of internal controls and noncompliance were isolated to fiscal year 2020-2021. INDIANA STATE BOARD OF ACCOUNTS 16 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 17 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective system of internal controls, as well as adequately document costs, enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Number and Year (or Other Identifying Number): SY 20-21 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Payroll disbursements for 3 of 11 employees tested, were not supported by the School Corporation's records. The hourly rate for 2 employees tested did not agree to the rate stated in the Board approved salary schedule. The School Corporation could not provide documentation or other justification to support their rate of pay. Additionally, the School Corporation did not retain time records for audit for the Food Service Director after leave of employment. The lack of internal controls and noncompliance were isolated to fiscal year 2020-2021. INDIANA STATE BOARD OF ACCOUNTS 16 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 17 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective system of internal controls, as well as adequately document costs, enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Number and Year (or Other Identifying Number): SY 20-21 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Payroll disbursements for 3 of 11 employees tested, were not supported by the School Corporation's records. The hourly rate for 2 employees tested did not agree to the rate stated in the Board approved salary schedule. The School Corporation could not provide documentation or other justification to support their rate of pay. Additionally, the School Corporation did not retain time records for audit for the Food Service Director after leave of employment. The lack of internal controls and noncompliance were isolated to fiscal year 2020-2021. INDIANA STATE BOARD OF ACCOUNTS 16 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 17 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective system of internal controls, as well as adequately document costs, enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 19611-112-PN01, 20611-112-PN01, 21611-112-PN01, 19619-112-PN01, 20619-112-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not in place at the School Corporation in order to ensure compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Payroll disbursements for three of six employees tested were not supported by the School Corporation's records. The hourly rate for one employee tested did not agree to the rate stated in the School Board approved salary schedule. The rate paid was more than the amount stated in the School Board approved salary schedule. In addition, the School Corporation could not provide a contract for two of the employees tested. The total amount paid in unsupported salaries, $86,043, was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 18 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "(1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS) . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 19 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective system of internal controls, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the Allowable Costs/Cost Principles compliance requirement. Questioned Costs Known questioned costs of $86,043 were identified as noted in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls, as well as to appropriately maintain documentation supporting costs, to ensure compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 19611-112-PN01, 20611-112-PN01, 21611-112-PN01, 19619-112-PN01, 20619-112-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not in place at the School Corporation in order to ensure compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Payroll disbursements for three of six employees tested were not supported by the School Corporation's records. The hourly rate for one employee tested did not agree to the rate stated in the School Board approved salary schedule. The rate paid was more than the amount stated in the School Board approved salary schedule. In addition, the School Corporation could not provide a contract for two of the employees tested. The total amount paid in unsupported salaries, $86,043, was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 18 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "(1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS) . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 19 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective system of internal controls, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the Allowable Costs/Cost Principles compliance requirement. Questioned Costs Known questioned costs of $86,043 were identified as noted in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls, as well as to appropriately maintain documentation supporting costs, to ensure compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 19611-112-PN01, 20611-112-PN01, 21611-112-PN01, 19619-112-PN01, 20619-112-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not in place at the School Corporation in order to ensure compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Payroll disbursements for three of six employees tested were not supported by the School Corporation's records. The hourly rate for one employee tested did not agree to the rate stated in the School Board approved salary schedule. The rate paid was more than the amount stated in the School Board approved salary schedule. In addition, the School Corporation could not provide a contract for two of the employees tested. The total amount paid in unsupported salaries, $86,043, was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 18 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "(1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS) . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 19 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective system of internal controls, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the Allowable Costs/Cost Principles compliance requirement. Questioned Costs Known questioned costs of $86,043 were identified as noted in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls, as well as to appropriately maintain documentation supporting costs, to ensure compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 19611-112-PN01, 20611-112-PN01, 21611-112-PN01, 19619-112-PN01, 20619-112-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not in place at the School Corporation in order to ensure compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Payroll disbursements for three of six employees tested were not supported by the School Corporation's records. The hourly rate for one employee tested did not agree to the rate stated in the School Board approved salary schedule. The rate paid was more than the amount stated in the School Board approved salary schedule. In addition, the School Corporation could not provide a contract for two of the employees tested. The total amount paid in unsupported salaries, $86,043, was considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 18 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "(1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS) . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 19 ROCHESTER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to establish an effective system of internal controls, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the Allowable Costs/Cost Principles compliance requirement. Questioned Costs Known questioned costs of $86,043 were identified as noted in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls, as well as to appropriately maintain documentation supporting costs, to ensure compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Criteria: According to 2 CFR Part 200.403, to be allowable under federal awards, costs must be adequately documented, be necessary and reasonable for the performance of the federal award, and be allocable thereto under the principles in 2 CFR Part 200, Subpart E. Additionally, according to 2 CFR Part 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and comply with established accounting policies and practices of the entity. Condition: Accurate and complete records to support disbursements were not maintained for the program. We specifically noted the following: ? SFRC is currently allocating payroll costs to the program based on budget estimates. There is not a process in place to compare the budget estimates to actual time and effort to ensure that budget estimates are accurate. ? For two of 16 payroll disbursements tested, the wages paid to the employee (used as the basis for the amount allocated to the program) did not agree with the payroll register for the selected pay period. ? For three of three non-payroll disbursements tested, the amount allocated to the program did not agree to the amount paid to the vendor. Context: 16 of 16 payroll transactions tested were allocated to the program based on budget estimates. Two of 16 payroll disbursements and three of three non-payroll disbursements did not agree with source documentation. Questioned Costs: $505 Cause: SFRC has not developed a process to compare the budget estimates to actual time and effort to ensure that budget estimates are accurate. Additionally, there was not adequate review of reimbursement requests to ensure that payroll and non-payroll disbursements agree with source documentation Effect: SFRC may not be able to demonstrate that costs charged to federal programs are allowable. Auditor?s Recommendation: SFRC should implement a process of comparing actual time and effort of employees to SFRC?s budget estimates at least bi-annually. Alternatively, SFRC could require employees to report their actual daily time on federal awards to ensure amounts charged are accurate and properly allocated. Additionally, SFRC should implement a review process of reimbursement requests to ensure that disbursements agree with source documentation. Management?s Response: Management is implementing a job/cost time and labor system as part of the current Paylocity system currently in place. This new time tracking system will allow individuals working directly on contracts to record time spent on grants on their individual weekly timecards. This system will allow management to report time spent by person by contract within our current payroll and financial system. This enhancement will not be in place until January 2023. In the meantime, management has formalized a quarterly manual review process to document actual time spent per employee per contract along with any needed adjustments to allocation percentages.
2022-003 Payroll Rates Approval Documentation Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? 2 CFR ? 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition ? During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Context ? 7 of 11 employees selected did not have appropriately documented approved payrates. Cause ? This occurred because no procedure was in place in the personnel department to ensure that all wage rates get approvals and are documented in employee personnel files. Unique wage rate changes, such as promotions, or merit based rases for individual are documented in personnel files, but annual company wide raises are not documented in individual personnel files. Effect ? Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Recommendation ? We recommend that the Agate adopt a policy to consistently and appropriately document approvals of all pay rates in individual personnel files. Auditee's comments and response ? Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-003 Payroll Rates Approval Documentation Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? 2 CFR ? 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition ? During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Context ? 7 of 11 employees selected did not have appropriately documented approved payrates. Cause ? This occurred because no procedure was in place in the personnel department to ensure that all wage rates get approvals and are documented in employee personnel files. Unique wage rate changes, such as promotions, or merit based rases for individual are documented in personnel files, but annual company wide raises are not documented in individual personnel files. Effect ? Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Recommendation ? We recommend that the Agate adopt a policy to consistently and appropriately document approvals of all pay rates in individual personnel files. Auditee's comments and response ? Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-003 Payroll Rates Approval Documentation Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? 2 CFR ? 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition ? During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Context ? 7 of 11 employees selected did not have appropriately documented approved payrates. Cause ? This occurred because no procedure was in place in the personnel department to ensure that all wage rates get approvals and are documented in employee personnel files. Unique wage rate changes, such as promotions, or merit based rases for individual are documented in personnel files, but annual company wide raises are not documented in individual personnel files. Effect ? Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Recommendation ? We recommend that the Agate adopt a policy to consistently and appropriately document approvals of all pay rates in individual personnel files. Auditee's comments and response ? Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-003 Payroll Rates Approval Documentation Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? 2 CFR ? 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition ? During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Context ? 7 of 11 employees selected did not have appropriately documented approved payrates. Cause ? This occurred because no procedure was in place in the personnel department to ensure that all wage rates get approvals and are documented in employee personnel files. Unique wage rate changes, such as promotions, or merit based rases for individual are documented in personnel files, but annual company wide raises are not documented in individual personnel files. Effect ? Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Recommendation ? We recommend that the Agate adopt a policy to consistently and appropriately document approvals of all pay rates in individual personnel files. Auditee's comments and response ? Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-003 Payroll Rates Approval Documentation Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? 2 CFR ? 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition ? During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Context ? 7 of 11 employees selected did not have appropriately documented approved payrates. Cause ? This occurred because no procedure was in place in the personnel department to ensure that all wage rates get approvals and are documented in employee personnel files. Unique wage rate changes, such as promotions, or merit based rases for individual are documented in personnel files, but annual company wide raises are not documented in individual personnel files. Effect ? Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Recommendation ? We recommend that the Agate adopt a policy to consistently and appropriately document approvals of all pay rates in individual personnel files. Auditee's comments and response ? Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-003 Payroll Rates Approval Documentation Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? 2 CFR ? 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition ? During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Context ? 7 of 11 employees selected did not have appropriately documented approved payrates. Cause ? This occurred because no procedure was in place in the personnel department to ensure that all wage rates get approvals and are documented in employee personnel files. Unique wage rate changes, such as promotions, or merit based rases for individual are documented in personnel files, but annual company wide raises are not documented in individual personnel files. Effect ? Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Recommendation ? We recommend that the Agate adopt a policy to consistently and appropriately document approvals of all pay rates in individual personnel files. Auditee's comments and response ? Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
2022-003 Payroll Rates Approval Documentation Federal Program ? Emergency Solutions Grants Program Assistance Listing # 14.231 Significant Deficiency Category of Finding ? Allowable Costs/Cost Principles Criteria ? 2 CFR ? 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition ? During our audit, we noted that pay rates for employees were not documented in a consistent, systematic manner. Context ? 7 of 11 employees selected did not have appropriately documented approved payrates. Cause ? This occurred because no procedure was in place in the personnel department to ensure that all wage rates get approvals and are documented in employee personnel files. Unique wage rate changes, such as promotions, or merit based rases for individual are documented in personnel files, but annual company wide raises are not documented in individual personnel files. Effect ? Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Recommendation ? We recommend that the Agate adopt a policy to consistently and appropriately document approvals of all pay rates in individual personnel files. Auditee's comments and response ? Management has reviewed the current practice for approval of raises and are implementing a new payroll system that will have authorizations built into the software which will correct this issue. Responsible party for corrective action: Laura Straw, Finance Director Repeat Finding: No
Shuttered Venue Operators Grant Program ? Assistance Listing No. 59.075 Criteria: 2 CFR ?200.430 (1)(i) requires that charges to federal awards for salaries and wages be based on records that accurately reflect the work performed. The records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: Tacoma Arts Live has a system of internal controls over payroll costs but the controls in place were not operating effectively. Controls over payroll costs failed to detect unallowable payroll costs as well as discrepancies between hours worked and hours charged to the program. Context: Controls failed to detect errors on two out of forty payroll selections. The first selection revealed that tips earned by staff were charged to the federal award, which are unallowable costs. The second selection revealed a discrepancy between hours worked and hours paid and charged to the program. These errors were identified using a statistically valid sample. Cause: Payroll costs were reviewed before being charged to federal awards, but this control failed to prevent or detect noncompliance. Effect: The allowable cost population supporting the Shuttered Venue Operators Grant Program contained unallowable tips as well as a payroll disbursement that was not supported by the underlying records of work performed. Questioned Costs: below the $25,000 reporting threshold. Recommendation: We recommend that Tacoma Arts Live implement more controls to ensure that payroll costs are sufficiently reviewed for accuracy and allowability. Views of Responsible Officials: Management agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
2022 ? 007 ? Special Education Cluster (IDEA) Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Special Education Cluster (IDEA) Assistance Listing Number: 84.027/84.173 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: 21619-58-PN01, 22619-058-PN01, S010A190014, S010A200014, S010A210014 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (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. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $150,392.06, Likely - $1,031,729.17. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 2 of 60 selections were not supported by appropriate documentation to support the amounts charged to the grants. 37 of 60 selections did not have adequate time and effort documentation. Cause: Crawfordsville Community School Corporation implemented a semi-annual certification for all employees in which the superintendent of schools reviews and approves each employee's semi-annual time and effort certification. This process was implemented in January, 2022, leaving 18 months of the audit period without proper controls. Other missing documentation likely was due to turnover in key positions, including the business manager. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: Yes, prior year finding ? 2020-004. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 007 ? Special Education Cluster (IDEA) Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Special Education Cluster (IDEA) Assistance Listing Number: 84.027/84.173 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: 21619-58-PN01, 22619-058-PN01, S010A190014, S010A200014, S010A210014 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (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. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $150,392.06, Likely - $1,031,729.17. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 2 of 60 selections were not supported by appropriate documentation to support the amounts charged to the grants. 37 of 60 selections did not have adequate time and effort documentation. Cause: Crawfordsville Community School Corporation implemented a semi-annual certification for all employees in which the superintendent of schools reviews and approves each employee's semi-annual time and effort certification. This process was implemented in January, 2022, leaving 18 months of the audit period without proper controls. Other missing documentation likely was due to turnover in key positions, including the business manager. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: Yes, prior year finding ? 2020-004. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 007 ? Special Education Cluster (IDEA) Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Special Education Cluster (IDEA) Assistance Listing Number: 84.027/84.173 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: 21619-58-PN01, 22619-058-PN01, S010A190014, S010A200014, S010A210014 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (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. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $150,392.06, Likely - $1,031,729.17. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 2 of 60 selections were not supported by appropriate documentation to support the amounts charged to the grants. 37 of 60 selections did not have adequate time and effort documentation. Cause: Crawfordsville Community School Corporation implemented a semi-annual certification for all employees in which the superintendent of schools reviews and approves each employee's semi-annual time and effort certification. This process was implemented in January, 2022, leaving 18 months of the audit period without proper controls. Other missing documentation likely was due to turnover in key positions, including the business manager. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: Yes, prior year finding ? 2020-004. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 007 ? Special Education Cluster (IDEA) Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Special Education Cluster (IDEA) Assistance Listing Number: 84.027/84.173 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: 21619-58-PN01, 22619-058-PN01, S010A190014, S010A200014, S010A210014 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (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. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $150,392.06, Likely - $1,031,729.17. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 2 of 60 selections were not supported by appropriate documentation to support the amounts charged to the grants. 37 of 60 selections did not have adequate time and effort documentation. Cause: Crawfordsville Community School Corporation implemented a semi-annual certification for all employees in which the superintendent of schools reviews and approves each employee's semi-annual time and effort certification. This process was implemented in January, 2022, leaving 18 months of the audit period without proper controls. Other missing documentation likely was due to turnover in key positions, including the business manager. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: Yes, prior year finding ? 2020-004. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 007 ? Special Education Cluster (IDEA) Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Special Education Cluster (IDEA) Assistance Listing Number: 84.027/84.173 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: 21619-58-PN01, 22619-058-PN01, S010A190014, S010A200014, S010A210014 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (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. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $150,392.06, Likely - $1,031,729.17. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 2 of 60 selections were not supported by appropriate documentation to support the amounts charged to the grants. 37 of 60 selections did not have adequate time and effort documentation. Cause: Crawfordsville Community School Corporation implemented a semi-annual certification for all employees in which the superintendent of schools reviews and approves each employee's semi-annual time and effort certification. This process was implemented in January, 2022, leaving 18 months of the audit period without proper controls. Other missing documentation likely was due to turnover in key positions, including the business manager. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: Yes, prior year finding ? 2020-004. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 007 ? Special Education Cluster (IDEA) Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Special Education Cluster (IDEA) Assistance Listing Number: 84.027/84.173 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: 21619-58-PN01, 22619-058-PN01, S010A190014, S010A200014, S010A210014 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (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. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $150,392.06, Likely - $1,031,729.17. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 2 of 60 selections were not supported by appropriate documentation to support the amounts charged to the grants. 37 of 60 selections did not have adequate time and effort documentation. Cause: Crawfordsville Community School Corporation implemented a semi-annual certification for all employees in which the superintendent of schools reviews and approves each employee's semi-annual time and effort certification. This process was implemented in January, 2022, leaving 18 months of the audit period without proper controls. Other missing documentation likely was due to turnover in key positions, including the business manager. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: Yes, prior year finding ? 2020-004. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 007 ? Special Education Cluster (IDEA) Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Special Education Cluster (IDEA) Assistance Listing Number: 84.027/84.173 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: 21619-58-PN01, 22619-058-PN01, S010A190014, S010A200014, S010A210014 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (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. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $150,392.06, Likely - $1,031,729.17. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 2 of 60 selections were not supported by appropriate documentation to support the amounts charged to the grants. 37 of 60 selections did not have adequate time and effort documentation. Cause: Crawfordsville Community School Corporation implemented a semi-annual certification for all employees in which the superintendent of schools reviews and approves each employee's semi-annual time and effort certification. This process was implemented in January, 2022, leaving 18 months of the audit period without proper controls. Other missing documentation likely was due to turnover in key positions, including the business manager. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: Yes, prior year finding ? 2020-004. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 008 ? Title I Grants to Local Educational Agencies Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S010A190014, S010A200014, S010A210014 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and 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. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $34,979.00, Likely - $473,241.37. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 5 of 60 selections were not supported by appropriate documentation to support the amounts charged to the grants. 37 of 60 selections did not have adequate time and effort documentation. 28 of 60 selections had variances between the recalculation of the gross wages amount and the amount charged per the payroll detail. Cause: Crawfordsville Community School Corporation implemented a semi-annual certification for all employees in which the superintendent of schools reviews and approves each employee's semi-annual time and effort certification. This process was implemented in January, 2022, leaving 18 months of the audit period without proper controls. Other missing documentation likely was due to turnover in key positions, including the business manager. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 008 ? Title I Grants to Local Educational Agencies Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S010A190014, S010A200014, S010A210014 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and 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. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $34,979.00, Likely - $473,241.37. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 5 of 60 selections were not supported by appropriate documentation to support the amounts charged to the grants. 37 of 60 selections did not have adequate time and effort documentation. 28 of 60 selections had variances between the recalculation of the gross wages amount and the amount charged per the payroll detail. Cause: Crawfordsville Community School Corporation implemented a semi-annual certification for all employees in which the superintendent of schools reviews and approves each employee's semi-annual time and effort certification. This process was implemented in January, 2022, leaving 18 months of the audit period without proper controls. Other missing documentation likely was due to turnover in key positions, including the business manager. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 008 ? Title I Grants to Local Educational Agencies Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S010A190014, S010A200014, S010A210014 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and 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. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $34,979.00, Likely - $473,241.37. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 5 of 60 selections were not supported by appropriate documentation to support the amounts charged to the grants. 37 of 60 selections did not have adequate time and effort documentation. 28 of 60 selections had variances between the recalculation of the gross wages amount and the amount charged per the payroll detail. Cause: Crawfordsville Community School Corporation implemented a semi-annual certification for all employees in which the superintendent of schools reviews and approves each employee's semi-annual time and effort certification. This process was implemented in January, 2022, leaving 18 months of the audit period without proper controls. Other missing documentation likely was due to turnover in key positions, including the business manager. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 008 ? Title I Grants to Local Educational Agencies Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S010A190014, S010A200014, S010A210014 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and 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. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $34,979.00, Likely - $473,241.37. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 5 of 60 selections were not supported by appropriate documentation to support the amounts charged to the grants. 37 of 60 selections did not have adequate time and effort documentation. 28 of 60 selections had variances between the recalculation of the gross wages amount and the amount charged per the payroll detail. Cause: Crawfordsville Community School Corporation implemented a semi-annual certification for all employees in which the superintendent of schools reviews and approves each employee's semi-annual time and effort certification. This process was implemented in January, 2022, leaving 18 months of the audit period without proper controls. Other missing documentation likely was due to turnover in key positions, including the business manager. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 009 ? Elementary and Secondary School Emergency Relief Fund Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425D200013, S425D210013, S425U200013, S425C200013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and 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. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $23,526.49, Likely - $1,191,366.00. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 60 of 60 selections did not have adequate time and effort documentation. Cause: Crawfordsville Community School Corporation implemented a semi-annual certification for all employees in which the superintendent of schools reviews and approves each employee's semi-annual time and effort certification. This process was implemented in January, 2022, leaving 18 months of the audit period without proper controls. Other missing documentation likely was due to turnover in key positions, including the business manager. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 009 ? Elementary and Secondary School Emergency Relief Fund Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425D200013, S425D210013, S425U200013, S425C200013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and 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. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $23,526.49, Likely - $1,191,366.00. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 60 of 60 selections did not have adequate time and effort documentation. Cause: Crawfordsville Community School Corporation implemented a semi-annual certification for all employees in which the superintendent of schools reviews and approves each employee's semi-annual time and effort certification. This process was implemented in January, 2022, leaving 18 months of the audit period without proper controls. Other missing documentation likely was due to turnover in key positions, including the business manager. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 009 ? Elementary and Secondary School Emergency Relief Fund Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425D200013, S425D210013, S425U200013, S425C200013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and 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. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $23,526.49, Likely - $1,191,366.00. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 60 of 60 selections did not have adequate time and effort documentation. Cause: Crawfordsville Community School Corporation implemented a semi-annual certification for all employees in which the superintendent of schools reviews and approves each employee's semi-annual time and effort certification. This process was implemented in January, 2022, leaving 18 months of the audit period without proper controls. Other missing documentation likely was due to turnover in key positions, including the business manager. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 009 ? Elementary and Secondary School Emergency Relief Fund Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425D200013, S425D210013, S425U200013, S425C200013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and 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. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $23,526.49, Likely - $1,191,366.00. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 60 of 60 selections did not have adequate time and effort documentation. Cause: Crawfordsville Community School Corporation implemented a semi-annual certification for all employees in which the superintendent of schools reviews and approves each employee's semi-annual time and effort certification. This process was implemented in January, 2022, leaving 18 months of the audit period without proper controls. Other missing documentation likely was due to turnover in key positions, including the business manager. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 009 ? Elementary and Secondary School Emergency Relief Fund Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425D200013, S425D210013, S425U200013, S425C200013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and 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. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $23,526.49, Likely - $1,191,366.00. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 60 of 60 selections did not have adequate time and effort documentation. Cause: Crawfordsville Community School Corporation implemented a semi-annual certification for all employees in which the superintendent of schools reviews and approves each employee's semi-annual time and effort certification. This process was implemented in January, 2022, leaving 18 months of the audit period without proper controls. Other missing documentation likely was due to turnover in key positions, including the business manager. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
FINDING 2022-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles, Special Tests & Provisions ? Non-Profit School Food Service Accounts Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program Assistance Listing Numbers: 10.533, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): SY 2020/2021, SY 2021/2022 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Allowable Cost/Cost Principles, Special Tests & Provisions ? Non-Profit School Food Service Accounts Audit Findings: Material Weakness, Other Matters Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . (g) Be adequately documented. . . . " 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; FINDING 2022-002 (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." 34 CFR 76.730 states: "A State and a subgrantee shall keep records that fully show: (a) The amount of funds under the grant or subgrant; (b) How the State or subgrantee uses the funds; (c) The total cost of the project; (d) The share of that cost provided from other sources; and (e) Other records to facilitate an effective audit." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." 7 CFR 220.7(e) states in part: ?. . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) . . . . (ii) . . .use all revenues received by such food service only for the operation or improvement of that food service. . . ? 7 CFR 210.14(a) states: ?Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under ?210.19(a) of this part. . . . ? Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements. Cause: Management had not developed a system of internal controls that would have ensured compliance with the Allowable Costs/Cost Principles and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements. Context: The School Corporation did not have effective controls in place to ensure that only applicable employees were paid from program funds. Six of the 24 employees? time charged to the program, did not have adequate documentation to support their wage allocations. The School Corporation paid a portion of the wages for three Elementary School Teachers, two Elementary Instructional Assistants, and one Library Aide from the School Lunch Fund based on fixed percentages. There was no supporting documentation to indicate how the percentages were determined. Wages and benefits charged to the program for the above noted employees totaled $19,073. This amount was considered questions costs. Effect: The failure to establish an effective internal control system by the School Corporation enabled noncompliance with the grant agreement and the Allowable Costs/Cost Principles and Special Tests & Provisions - School Food Service Accounts compliance requirements. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements could result in the loss of federal funds to the School Corporation. Questioned Costs: $19,073. Identification as a repeat finding, if applicable: No Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and the Allowable Costs/Cost Principles and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
U.S. Department of Education Finding 2022-001: Education Stabilization Fund??Governor?s Emergency Education Relief (GEER) and Elementary and Secondary School Emergency Relief (ESSER) Fund Semi-Annual Certification Procedures Pass-through entity: Michigan Department of Education (MDE) Assistance Listing Number(s): 84.425C and 84.425D Award Numbers: COVID-19 211202-2122, COVID-19 213712-2021, COVID-19 213722-2122 and COVID-19 213742-2122 Award Year End: September 30, 2023 Specific Requirement: Allowable Costs/Cost Principles Criteria: Section 200.430 of the Cost Principles of the Title 2 U.S. Code of Federal Regulations (CFR) Part 200?Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires charges to federal award for salaries and wages to be based on records that accurately reflect the work performed. These records must (1) be supported by a system of internal controls which provide reasonable assurance that charges are accurate, allowable and properly allocated, (2) reasonably reflect total activity for which the employee is compensated, (3) encompass both federally assisted and all other activities compensated by the entity, (4) support the distribution of the employee?s wages among specific cost objectives if the employee works on more than one federal award, (5) be reconciled with payroll budget estimates with necessary adjustments made to accounting records to ensure that excess costs are not charged to federal programs. Appendix B to 2 CFR, Part 225?Selected Items of Cost indicates that where employees are expected to work solely on a single Federal award or cost objective, charges for their salaries and wages will be supported by periodic certifications that the employees worked solely on that program for the period covered by the certification. These certifications will be prepared at least semi-annually and will be signed by the employee or supervisory official having first-hand knowledge of the work performed by the employee. Questioned Costs: None. Condition: During our detailed testing of time-and-effort reporting for the Education Stabilization Fund??GEER/ESSER programs, we noted that semi-annual certifications were prepared to comply with federal time and effort requirements. However, the reports were not timely prepared or timely reviewed by the program supervisor with documented approval. Context: Ninety-five employees working in the federal program were eligible for semi-annual certifications because their payroll costs were fully allocated to a single federal program or cost objective. One certification was prepared by each building supervisor for each six-month period during the fiscal year. In total, the certifications properly listed all eligible 95 employees that worked in the federal program during the respective semesters. While the certifications contained the proper components, including documented supervisor approval, they were not prepared timely as they were completed and certified during the audit process. The sample was not a statistically valid sample. Effect: Failure to timely and properly prepare and review time-and-effort reporting could allow improper payroll expenses to be charged to the School District?s federal programs. As a result, payroll compensation and fringe benefits charged for these employees could be disallowed, or there could be missed opportunities for reimbursement. Cause: The School District program personnel overlooked the federal requirements for time-and-effort reporting and the semi-annual certifications were not timely prepared. Repeat Finding: This is not a repeat finding. Recommendation: The School District should provide training to educate all employees working in federal programs of the requirements for documenting personnel expenses under Uniform Grant Guidance, and the School District should require proper time-and-effort documentation to be timely prepared and certified by the appropriate program supervisor. Views of Responsible Officials: The School District agrees with this finding.
U.S. Department of Education Finding 2022-001: Education Stabilization Fund??Governor?s Emergency Education Relief (GEER) and Elementary and Secondary School Emergency Relief (ESSER) Fund Semi-Annual Certification Procedures Pass-through entity: Michigan Department of Education (MDE) Assistance Listing Number(s): 84.425C and 84.425D Award Numbers: COVID-19 211202-2122, COVID-19 213712-2021, COVID-19 213722-2122 and COVID-19 213742-2122 Award Year End: September 30, 2023 Specific Requirement: Allowable Costs/Cost Principles Criteria: Section 200.430 of the Cost Principles of the Title 2 U.S. Code of Federal Regulations (CFR) Part 200?Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires charges to federal award for salaries and wages to be based on records that accurately reflect the work performed. These records must (1) be supported by a system of internal controls which provide reasonable assurance that charges are accurate, allowable and properly allocated, (2) reasonably reflect total activity for which the employee is compensated, (3) encompass both federally assisted and all other activities compensated by the entity, (4) support the distribution of the employee?s wages among specific cost objectives if the employee works on more than one federal award, (5) be reconciled with payroll budget estimates with necessary adjustments made to accounting records to ensure that excess costs are not charged to federal programs. Appendix B to 2 CFR, Part 225?Selected Items of Cost indicates that where employees are expected to work solely on a single Federal award or cost objective, charges for their salaries and wages will be supported by periodic certifications that the employees worked solely on that program for the period covered by the certification. These certifications will be prepared at least semi-annually and will be signed by the employee or supervisory official having first-hand knowledge of the work performed by the employee. Questioned Costs: None. Condition: During our detailed testing of time-and-effort reporting for the Education Stabilization Fund??GEER/ESSER programs, we noted that semi-annual certifications were prepared to comply with federal time and effort requirements. However, the reports were not timely prepared or timely reviewed by the program supervisor with documented approval. Context: Ninety-five employees working in the federal program were eligible for semi-annual certifications because their payroll costs were fully allocated to a single federal program or cost objective. One certification was prepared by each building supervisor for each six-month period during the fiscal year. In total, the certifications properly listed all eligible 95 employees that worked in the federal program during the respective semesters. While the certifications contained the proper components, including documented supervisor approval, they were not prepared timely as they were completed and certified during the audit process. The sample was not a statistically valid sample. Effect: Failure to timely and properly prepare and review time-and-effort reporting could allow improper payroll expenses to be charged to the School District?s federal programs. As a result, payroll compensation and fringe benefits charged for these employees could be disallowed, or there could be missed opportunities for reimbursement. Cause: The School District program personnel overlooked the federal requirements for time-and-effort reporting and the semi-annual certifications were not timely prepared. Repeat Finding: This is not a repeat finding. Recommendation: The School District should provide training to educate all employees working in federal programs of the requirements for documenting personnel expenses under Uniform Grant Guidance, and the School District should require proper time-and-effort documentation to be timely prepared and certified by the appropriate program supervisor. Views of Responsible Officials: The School District agrees with this finding.
U.S. Department of Education Finding 2022-001: Education Stabilization Fund??Governor?s Emergency Education Relief (GEER) and Elementary and Secondary School Emergency Relief (ESSER) Fund Semi-Annual Certification Procedures Pass-through entity: Michigan Department of Education (MDE) Assistance Listing Number(s): 84.425C and 84.425D Award Numbers: COVID-19 211202-2122, COVID-19 213712-2021, COVID-19 213722-2122 and COVID-19 213742-2122 Award Year End: September 30, 2023 Specific Requirement: Allowable Costs/Cost Principles Criteria: Section 200.430 of the Cost Principles of the Title 2 U.S. Code of Federal Regulations (CFR) Part 200?Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires charges to federal award for salaries and wages to be based on records that accurately reflect the work performed. These records must (1) be supported by a system of internal controls which provide reasonable assurance that charges are accurate, allowable and properly allocated, (2) reasonably reflect total activity for which the employee is compensated, (3) encompass both federally assisted and all other activities compensated by the entity, (4) support the distribution of the employee?s wages among specific cost objectives if the employee works on more than one federal award, (5) be reconciled with payroll budget estimates with necessary adjustments made to accounting records to ensure that excess costs are not charged to federal programs. Appendix B to 2 CFR, Part 225?Selected Items of Cost indicates that where employees are expected to work solely on a single Federal award or cost objective, charges for their salaries and wages will be supported by periodic certifications that the employees worked solely on that program for the period covered by the certification. These certifications will be prepared at least semi-annually and will be signed by the employee or supervisory official having first-hand knowledge of the work performed by the employee. Questioned Costs: None. Condition: During our detailed testing of time-and-effort reporting for the Education Stabilization Fund??GEER/ESSER programs, we noted that semi-annual certifications were prepared to comply with federal time and effort requirements. However, the reports were not timely prepared or timely reviewed by the program supervisor with documented approval. Context: Ninety-five employees working in the federal program were eligible for semi-annual certifications because their payroll costs were fully allocated to a single federal program or cost objective. One certification was prepared by each building supervisor for each six-month period during the fiscal year. In total, the certifications properly listed all eligible 95 employees that worked in the federal program during the respective semesters. While the certifications contained the proper components, including documented supervisor approval, they were not prepared timely as they were completed and certified during the audit process. The sample was not a statistically valid sample. Effect: Failure to timely and properly prepare and review time-and-effort reporting could allow improper payroll expenses to be charged to the School District?s federal programs. As a result, payroll compensation and fringe benefits charged for these employees could be disallowed, or there could be missed opportunities for reimbursement. Cause: The School District program personnel overlooked the federal requirements for time-and-effort reporting and the semi-annual certifications were not timely prepared. Repeat Finding: This is not a repeat finding. Recommendation: The School District should provide training to educate all employees working in federal programs of the requirements for documenting personnel expenses under Uniform Grant Guidance, and the School District should require proper time-and-effort documentation to be timely prepared and certified by the appropriate program supervisor. Views of Responsible Officials: The School District agrees with this finding.
FINDING 2022-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles, Special Tests & Provisions ? Non-Profit School Food Service Accounts Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program Assistance Listing Numbers: 10.533, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): SY 2020/2021, SY 2021/2022 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Allowable Cost/Cost Principles, Special Tests & Provisions ? Non-Profit School Food Service Accounts Audit Findings: Material Weakness, Other Matters Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . (g) Be adequately documented. . . . " 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; FINDING 2022-002 (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." 34 CFR 76.730 states: "A State and a subgrantee shall keep records that fully show: (a) The amount of funds under the grant or subgrant; (b) How the State or subgrantee uses the funds; (c) The total cost of the project; (d) The share of that cost provided from other sources; and (e) Other records to facilitate an effective audit." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." 7 CFR 220.7(e) states in part: ?. . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) . . . . (ii) . . .use all revenues received by such food service only for the operation or improvement of that food service. . . ? 7 CFR 210.14(a) states: ?Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under ?210.19(a) of this part. . . . ? Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements. Cause: Management had not developed a system of internal controls that would have ensured compliance with the Allowable Costs/Cost Principles and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements. Context: The School Corporation did not have effective controls in place to ensure that only applicable employees were paid from program funds. Six of the 24 employees? time charged to the program, did not have adequate documentation to support their wage allocations. The School Corporation paid a portion of the wages for three Elementary School Teachers, two Elementary Instructional Assistants, and one Library Aide from the School Lunch Fund based on fixed percentages. There was no supporting documentation to indicate how the percentages were determined. Wages and benefits charged to the program for the above noted employees totaled $19,073. This amount was considered questions costs. Effect: The failure to establish an effective internal control system by the School Corporation enabled noncompliance with the grant agreement and the Allowable Costs/Cost Principles and Special Tests & Provisions - School Food Service Accounts compliance requirements. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements could result in the loss of federal funds to the School Corporation. Questioned Costs: $19,073. Identification as a repeat finding, if applicable: No Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and the Allowable Costs/Cost Principles and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles, Special Tests & Provisions ? Non-Profit School Food Service Accounts Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program Assistance Listing Numbers: 10.533, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): SY 2020/2021, SY 2021/2022 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Allowable Cost/Cost Principles, Special Tests & Provisions ? Non-Profit School Food Service Accounts Audit Findings: Material Weakness, Other Matters Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . (g) Be adequately documented. . . . " 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; FINDING 2022-002 (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." 34 CFR 76.730 states: "A State and a subgrantee shall keep records that fully show: (a) The amount of funds under the grant or subgrant; (b) How the State or subgrantee uses the funds; (c) The total cost of the project; (d) The share of that cost provided from other sources; and (e) Other records to facilitate an effective audit." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." 7 CFR 220.7(e) states in part: ?. . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) . . . . (ii) . . .use all revenues received by such food service only for the operation or improvement of that food service. . . ? 7 CFR 210.14(a) states: ?Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. Expenditures of nonprofit school food service revenues shall be in accordance with the financial management system established by the State agency under ?210.19(a) of this part. . . . ? Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements. Cause: Management had not developed a system of internal controls that would have ensured compliance with the Allowable Costs/Cost Principles and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements. Context: The School Corporation did not have effective controls in place to ensure that only applicable employees were paid from program funds. Six of the 24 employees? time charged to the program, did not have adequate documentation to support their wage allocations. The School Corporation paid a portion of the wages for three Elementary School Teachers, two Elementary Instructional Assistants, and one Library Aide from the School Lunch Fund based on fixed percentages. There was no supporting documentation to indicate how the percentages were determined. Wages and benefits charged to the program for the above noted employees totaled $19,073. This amount was considered questions costs. Effect: The failure to establish an effective internal control system by the School Corporation enabled noncompliance with the grant agreement and the Allowable Costs/Cost Principles and Special Tests & Provisions - School Food Service Accounts compliance requirements. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements could result in the loss of federal funds to the School Corporation. Questioned Costs: $19,073. Identification as a repeat finding, if applicable: No Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and the Allowable Costs/Cost Principles and Special Tests & Provisions ? Non-Profit School Food Service Accounts compliance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-004 Subject: Child Nutrition Cluster ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, After School Snack Program, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . . 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE?s definition of IBS); . . . . (iv) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and a non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which allocated using different allocation bases; or an unallowable activity and a direct or indirect costs activity. . . .? Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with the requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Cause: The School Corporation's management had not designed or implemented internal controls which would have ensured compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system could enable material noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirements listed above could have resulted in the loss of funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had not designed or implemented adequate internal controls to ensure that payroll disbursements were only for food service-related services. Payroll disbursements comprise approximately 45% of the program costs charged to the Child Nutrition Cluster. One employee was responsible for processing payroll. Payroll reports were submitted to the School Board and Treasurer for review and approval; however, the reports only provided a total gross amount paid from each fund. The reports did not list the employees who were paid from the fund. In March 2021, the Treasurer implemented a review of the payroll distribution report, which is broken out by fund and individual employee. The lack of controls related to payroll disbursements was isolated to the 2020-21 year. Additionally, payroll disbursements for custodial employees were allocated to the Child Nutrition Cluster based on a percentage of the custodial employees? salaries. However, there were no time and effort logs or other documentation maintained to support the percentage of the custodial salaries allocated to the Child Nutrition Cluster. The custodial salaries make up approximately 3% of the total payroll disbursements charged to the Child Nutrition Cluster. This was an issue throughout the audit period. Identification as a repeat finding, if applicable: Yes, see Finding 2020-004 Recommendation: We recommended that management continue to document controls surrounding payroll disbursement through review of the payroll distribution report each pay period. Additionally, we recommended that the School maintain written documentation supporting the portion of salaries paid from the School Lunch fund for custodial personnel. Views of Responsible Officials: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-004 Subject: Child Nutrition Cluster ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, After School Snack Program, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . . 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE?s definition of IBS); . . . . (iv) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and a non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which allocated using different allocation bases; or an unallowable activity and a direct or indirect costs activity. . . .? Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with the requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Cause: The School Corporation's management had not designed or implemented internal controls which would have ensured compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system could enable material noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirements listed above could have resulted in the loss of funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had not designed or implemented adequate internal controls to ensure that payroll disbursements were only for food service-related services. Payroll disbursements comprise approximately 45% of the program costs charged to the Child Nutrition Cluster. One employee was responsible for processing payroll. Payroll reports were submitted to the School Board and Treasurer for review and approval; however, the reports only provided a total gross amount paid from each fund. The reports did not list the employees who were paid from the fund. In March 2021, the Treasurer implemented a review of the payroll distribution report, which is broken out by fund and individual employee. The lack of controls related to payroll disbursements was isolated to the 2020-21 year. Additionally, payroll disbursements for custodial employees were allocated to the Child Nutrition Cluster based on a percentage of the custodial employees? salaries. However, there were no time and effort logs or other documentation maintained to support the percentage of the custodial salaries allocated to the Child Nutrition Cluster. The custodial salaries make up approximately 3% of the total payroll disbursements charged to the Child Nutrition Cluster. This was an issue throughout the audit period. Identification as a repeat finding, if applicable: Yes, see Finding 2020-004 Recommendation: We recommended that management continue to document controls surrounding payroll disbursement through review of the payroll distribution report each pay period. Additionally, we recommended that the School maintain written documentation supporting the portion of salaries paid from the School Lunch fund for custodial personnel. Views of Responsible Officials: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-004 Subject: Child Nutrition Cluster ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, After School Snack Program, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . . 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE?s definition of IBS); . . . . (iv) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and a non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which allocated using different allocation bases; or an unallowable activity and a direct or indirect costs activity. . . .? Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with the requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Cause: The School Corporation's management had not designed or implemented internal controls which would have ensured compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system could enable material noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirements listed above could have resulted in the loss of funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had not designed or implemented adequate internal controls to ensure that payroll disbursements were only for food service-related services. Payroll disbursements comprise approximately 45% of the program costs charged to the Child Nutrition Cluster. One employee was responsible for processing payroll. Payroll reports were submitted to the School Board and Treasurer for review and approval; however, the reports only provided a total gross amount paid from each fund. The reports did not list the employees who were paid from the fund. In March 2021, the Treasurer implemented a review of the payroll distribution report, which is broken out by fund and individual employee. The lack of controls related to payroll disbursements was isolated to the 2020-21 year. Additionally, payroll disbursements for custodial employees were allocated to the Child Nutrition Cluster based on a percentage of the custodial employees? salaries. However, there were no time and effort logs or other documentation maintained to support the percentage of the custodial salaries allocated to the Child Nutrition Cluster. The custodial salaries make up approximately 3% of the total payroll disbursements charged to the Child Nutrition Cluster. This was an issue throughout the audit period. Identification as a repeat finding, if applicable: Yes, see Finding 2020-004 Recommendation: We recommended that management continue to document controls surrounding payroll disbursement through review of the payroll distribution report each pay period. Additionally, we recommended that the School maintain written documentation supporting the portion of salaries paid from the School Lunch fund for custodial personnel. Views of Responsible Officials: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-004 Subject: Child Nutrition Cluster ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, After School Snack Program, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . . 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE?s definition of IBS); . . . . (iv) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and a non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which allocated using different allocation bases; or an unallowable activity and a direct or indirect costs activity. . . .? Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with the requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Cause: The School Corporation's management had not designed or implemented internal controls which would have ensured compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system could enable material noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirements listed above could have resulted in the loss of funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had not designed or implemented adequate internal controls to ensure that payroll disbursements were only for food service-related services. Payroll disbursements comprise approximately 45% of the program costs charged to the Child Nutrition Cluster. One employee was responsible for processing payroll. Payroll reports were submitted to the School Board and Treasurer for review and approval; however, the reports only provided a total gross amount paid from each fund. The reports did not list the employees who were paid from the fund. In March 2021, the Treasurer implemented a review of the payroll distribution report, which is broken out by fund and individual employee. The lack of controls related to payroll disbursements was isolated to the 2020-21 year. Additionally, payroll disbursements for custodial employees were allocated to the Child Nutrition Cluster based on a percentage of the custodial employees? salaries. However, there were no time and effort logs or other documentation maintained to support the percentage of the custodial salaries allocated to the Child Nutrition Cluster. The custodial salaries make up approximately 3% of the total payroll disbursements charged to the Child Nutrition Cluster. This was an issue throughout the audit period. Identification as a repeat finding, if applicable: Yes, see Finding 2020-004 Recommendation: We recommended that management continue to document controls surrounding payroll disbursement through review of the payroll distribution report each pay period. Additionally, we recommended that the School maintain written documentation supporting the portion of salaries paid from the School Lunch fund for custodial personnel. Views of Responsible Officials: Management agrees with the finding and has prepared a corrective action plan.
2022 ? 002 Federal Agency: U.S. Department of Homeland Security Federal Program Name: COVID-19 - Disaster Grants ? Public Assistance (Presidentially Declared Disasters) Assistance Listing Number: 97.036 Federal Award Identification Number and Year: FEMA-4496-DR (1/20/2020 and continuing) Pass-Through Agency: Massachusetts Emergency Management Agency Pass-Through Number(s): CT CDA CTFEMA4496HINGH00XXX Award Period: February 2021 ? June 2021 Compliance Requirement: Allowable Costs / Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: The United States Code of Federal Regulations (CFR) Title 2 Part 200.430 indicates charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Such records should support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on a federal award and a non-federal award. Condition: We noted that for a sample of payroll disbursements the total amount charged to the grant was not supported by accurate documentation. Questioned costs: Below the reportable limit Context: Sixty payroll transactions were selected for testing in our statistically valid sample and the following exceptions were noted: ? For 3 of 60 disbursements, the Town requested reimbursement for certain overtime hours for one employee which were supported by records of time worked by a different employee. ? For 1 of 60 disbursements, the Town disbursed reimbursable expenses for hours reported as overtime which were documented as regular time in the supporting records ? For 2 of 60 disbursements, the employee?s base rate of pay used to calculate the reimbursement request was incorrect. Cause: Policies and procedures were not implemented to ensure that costs charged to the program were based on adequate supporting documentation. Effect: Unallowable costs were charged to the program. Repeat Finding: No. Recommendation: We recommend the Town enhance procedures and controls to ensure that payroll costs charged to the grant are adequately documented. Views of responsible officials: Management agrees with the finding. Please refer to the Corrective Action Plan.
2022 ? 002 Federal Agency: U.S. Department of Homeland Security Federal Program Name: COVID-19 - Disaster Grants ? Public Assistance (Presidentially Declared Disasters) Assistance Listing Number: 97.036 Federal Award Identification Number and Year: FEMA-4496-DR (1/20/2020 and continuing) Pass-Through Agency: Massachusetts Emergency Management Agency Pass-Through Number(s): CT CDA CTFEMA4496HINGH00XXX Award Period: February 2021 ? June 2021 Compliance Requirement: Allowable Costs / Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: The United States Code of Federal Regulations (CFR) Title 2 Part 200.430 indicates charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Such records should support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on a federal award and a non-federal award. Condition: We noted that for a sample of payroll disbursements the total amount charged to the grant was not supported by accurate documentation. Questioned costs: Below the reportable limit Context: Sixty payroll transactions were selected for testing in our statistically valid sample and the following exceptions were noted: ? For 3 of 60 disbursements, the Town requested reimbursement for certain overtime hours for one employee which were supported by records of time worked by a different employee. ? For 1 of 60 disbursements, the Town disbursed reimbursable expenses for hours reported as overtime which were documented as regular time in the supporting records ? For 2 of 60 disbursements, the employee?s base rate of pay used to calculate the reimbursement request was incorrect. Cause: Policies and procedures were not implemented to ensure that costs charged to the program were based on adequate supporting documentation. Effect: Unallowable costs were charged to the program. Repeat Finding: No. Recommendation: We recommend the Town enhance procedures and controls to ensure that payroll costs charged to the grant are adequately documented. Views of responsible officials: Management agrees with the finding. Please refer to the Corrective Action Plan.
Questioned Cost and Noncompliance 2 CFR ? 400.1 gives regulatory effect for the U.S. Department of Agriculture to the Office of Management and Budget guidance, as supplemented by this part. This part adopts in the OMB guidance in subparts A through F of 2 CFR part 200. 2 CFR ? 200.430(a) provides that costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: 1. Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; 2. Follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and 3. Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Furthermore, Ohio Department of Education Grants Management Guidance 2014-002, revised on June 15, 2016 and August 29, 2019, further clarifies these requirements. The type of documentation required is based on the funding source and/or cost objective: ? Semi-annual certifications are allowed when an employee's compensation is funded by only one Federal grant. An employee funded by a federal grant and the General fund would fall under this category. ? Time and effort documentation is used when an employee's compensation is funded by more than one federal grant. ? The substitute system of collecting time and effort is used when an employee?s compensation is funded by more than one grant. Due to a deficiency in internal policies and procedures over compliance, the food service director, who is partially paid by contract from the Child Nutrition Cluster funds, did not obtain semi-annual certifications for payroll and benefit expenditures which resulted in Child Nutrition Cluster actual expenditures of $25,794 not being supported with semi-annual certifications or time sheets and will be considered a questioned cost. Based on the above guidance, the employee should have completed semi-annual certifications as their compensation was funded by a single Federal grant. The District should implement control procedures to verify that all District employees who perform work for federal cost objectives complete semi-annual certifications for single source funded personnel and time and effort documentation for payroll charges for split funded personnel. The documentation should be signed by each individual employee or a supervisor who has firsthand knowledge of the information contained in the documentation