Finding 2022-003 ? Material Weakness: Allowable Costs & Activities ? Compliance and Control Finding ALN 84.042 ? Student Support Services, 84.044 ? Talent Search and 84.047 ? Upward Bound ? TRIO Cluster Federal Agency: U.S. Department of Education Pass-Through Entity: None ALN 47.076 ? Research and Development Cluster: National Science Foundation ?Missouri Louis Stokes Alliances for Minority Participation, Research Initiation Grant, and Entrepreneurship Federal Agency: National Science Foundation Pass-Through Entity: None ALN 84.031 ? Title III ? Higher Education ? Institutional Aid Federal Agency: U.S. Department of Education Pass-Through Entity: None Criteria Or Specific Requirement: 2 CFR section 200.403 requires adequate documentation for allowable activities and costs and 2 CFR section 200.430(i)(1) requires charges to federal awards for salaries and wages be based on records that accurately reflect the work performed. Condition: We noted through procedures performed that payroll costs were not supported with adequate documentation. Internal controls designed for these federal programs did not detect these errors. Cause: Controls over compliance put in place by management were not operating effectively as it relates to allowable costs and activities charged to the grants. Effect: Instances of noncompliance were not detected by management. Questioned Costs: TRIO Cluster - $40,361 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. National Science Foundation - $24,744 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. Title III - $34,906 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. Context: TRIO Cluster - For a sample of 40 individual costs charged to the grant, 26 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. National Science Foundation - For a sample of 40 individual costs charged to the grant, 24 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. Title III - TRIO Cluster - For a sample of 40 individual costs charged to the grant, 21 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. Identification As A Repeat Finding: 2021-003, 2021-008, 2021-015, 2020-003, and 2020-007 Recommendation: We recommend that management adjust its time-keeping process to verify that the amount of time charged to the grant is accurate and based on the employee?s time spent working on the grant. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: The University is working with our third-party payroll provider to automate time and effort reporting. We are currently using paper forms for reporting until we can implement Time & Effort through ADP. The Director of Title III & Finance Compliance officer to further discuss time and effort.
Finding 2022-003 ? Material Weakness: Allowable Costs & Activities ? Compliance and Control Finding ALN 84.042 ? Student Support Services, 84.044 ? Talent Search and 84.047 ? Upward Bound ? TRIO Cluster Federal Agency: U.S. Department of Education Pass-Through Entity: None ALN 47.076 ? Research and Development Cluster: National Science Foundation ?Missouri Louis Stokes Alliances for Minority Participation, Research Initiation Grant, and Entrepreneurship Federal Agency: National Science Foundation Pass-Through Entity: None ALN 84.031 ? Title III ? Higher Education ? Institutional Aid Federal Agency: U.S. Department of Education Pass-Through Entity: None Criteria Or Specific Requirement: 2 CFR section 200.403 requires adequate documentation for allowable activities and costs and 2 CFR section 200.430(i)(1) requires charges to federal awards for salaries and wages be based on records that accurately reflect the work performed. Condition: We noted through procedures performed that payroll costs were not supported with adequate documentation. Internal controls designed for these federal programs did not detect these errors. Cause: Controls over compliance put in place by management were not operating effectively as it relates to allowable costs and activities charged to the grants. Effect: Instances of noncompliance were not detected by management. Questioned Costs: TRIO Cluster - $40,361 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. National Science Foundation - $24,744 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. Title III - $34,906 of known questioned costs were identified in our testing sample. Likely questioned costs exceed $25,000. Context: TRIO Cluster - For a sample of 40 individual costs charged to the grant, 26 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. National Science Foundation - For a sample of 40 individual costs charged to the grant, 24 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. Title III - TRIO Cluster - For a sample of 40 individual costs charged to the grant, 21 payroll items tested did not include adequate documentation. The University did not provide documentation to support the time and effort of each employee charged to the grant. Identification As A Repeat Finding: 2021-003, 2021-008, 2021-015, 2020-003, and 2020-007 Recommendation: We recommend that management adjust its time-keeping process to verify that the amount of time charged to the grant is accurate and based on the employee?s time spent working on the grant. Internal controls over allowable costs and activities should ensure procedural improvements are implemented properly. Views Of Responsible Officials: The University is working with our third-party payroll provider to automate time and effort reporting. We are currently using paper forms for reporting until we can implement Time & Effort through ADP. The Director of Title III & Finance Compliance officer to further discuss time and effort.
Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the District, as a recipient of Federal funds, must establish and maintain effective internal controls 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. In addition, under 2 CFR 200.430, it states that 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, (2) be incorporated into the official records of the non-Federal entity, (3) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, and (4) 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 or a federal award and non-Federal award. Condition: During our review of payroll charged to the grant, we noted two employees who did not have documentation to support the distribution of the employee's time spent on grant activities. Cause: Administrative oversight. Effect: The District did not have adequate documentation to support the distribution of the employee's wages paid using grant funds. Questioned Costs: $52,911 Repeat Finding: No Recommendation: We recommend that documentation be retained to support the distribution of salaries and wages for all employees paid using grant funds. Views of Responsible Officials: Management's views and corrective action plan is included at the end of this report.
Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the District, as a recipient of Federal funds, must establish and maintain effective internal controls 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. In addition, under 2 CFR 200.430, it states that 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, (2) be incorporated into the official records of the non-Federal entity, (3) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, and (4) 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 or a federal award and non-Federal award. Condition: During our review of payroll charged to the grant, we noted two employees who did not have documentation to support the distribution of the employee's time spent on grant activities. Cause: Administrative oversight. Effect: The District did not have adequate documentation to support the distribution of the employee's wages paid using grant funds. Questioned Costs: $52,911 Repeat Finding: No Recommendation: We recommend that documentation be retained to support the distribution of salaries and wages for all employees paid using grant funds. Views of Responsible Officials: Management's views and corrective action plan is included at the end of this report.
Finding 2022-001 Budget Based Salary Allocation (Compliance and Control Finding) Repeat Finding No Federal Program Title U.S. Department of Health and Human Services 93.566 Refugee and Entrant Assistance State / Replacement Designee Administered Programs Contract Number FCSAK05984 Award Year 2021 ? 2022 Finding The Jewish Federation of Metropolitan Chicago (the Federation) allocated staff salaries to the federal program based on budget estimates, which alone does not qualify as support for charges to federal awards. Criteria 2 CFR 200.430(i) Standards for Documentation of Personnel Expenses (1) Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. 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 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. Condition The Federation allocated one employees? salary to the program based on a budgeted rate. Out of the 13 payments made to employees tested (five employees), two payments were based on an allocation of less than 100% (related to one employee during the grant year) to the program. All other employees tested have 100% of their salaries allocated to the program. Cause Per the Federation, the refugee program staff are the only government grant-funded staff within the organization making it infeasible to change the electronic time and attendance system which does not have a provision that allows time to be tracked by funding source. Beginning in FY23, the Federation only charges salaries to the program for staff that work 100% on this grant. Effect Noncompliance with federal regulations could result in the loss of future federal funding. Context We tested five employees whose salaries were applied to the federal program. For each employee selected, selected payroll related samples as a portion of our testing during the fiscal year. This finding was found during the review of the supporting documentation provided. Section III. Federal Awards Findings and Questioned Costs (Continued) Questioned Costs Total questioned costs were approximately $10,000 (allocated portion of the selected employee?s salary). Recommendation As the Federation does not have processes and controls in place for federal program time tracking, we recommend that only staff that allocate 100% of their time to the program be charged to the program. Views of Responsible Officials Management is in agreement with this finding. See corrective action plan.
Criteria: Federal regulation 2 CFR ?200.430 states that ?charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.? Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? Be incorporated into the official records of the non-Federal entity. ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. ? Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; ? Comply with the established accounting policies and practices of the non-Federal entity. ? Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. ? Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a total of 26 employees with salaries and benefits charged to the federal programs noted above during the 2021-22 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR ?200.430. Questioned Costs: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs.Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single funded employees and monthly certifications for multi-funded employees.
Criteria: Federal regulation 2 CFR ?200.430 states that ?charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.? Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? Be incorporated into the official records of the non-Federal entity. ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. ? Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; ? Comply with the established accounting policies and practices of the non-Federal entity. ? Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. ? Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a total of 26 employees with salaries and benefits charged to the federal programs noted above during the 2021-22 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR ?200.430. Questioned Costs: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs.Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single funded employees and monthly certifications for multi-funded employees.
Criteria: Federal regulation 2 CFR ?200.430 states that ?charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.? Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? Be incorporated into the official records of the non-Federal entity. ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. ? Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; ? Comply with the established accounting policies and practices of the non-Federal entity. ? Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. ? Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a total of 26 employees with salaries and benefits charged to the federal programs noted above during the 2021-22 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR ?200.430. Questioned Costs: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs.Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single funded employees and monthly certifications for multi-funded employees.
Criteria: Federal regulation 2 CFR ?200.430 states that ?charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.? Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? Be incorporated into the official records of the non-Federal entity. ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. ? Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; ? Comply with the established accounting policies and practices of the non-Federal entity. ? Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. ? Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a total of 26 employees with salaries and benefits charged to the federal programs noted above during the 2021-22 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR ?200.430. Questioned Costs: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs.Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single funded employees and monthly certifications for multi-funded employees.
Criteria: Federal regulation 2 CFR ?200.430 states that ?charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.? Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? Be incorporated into the official records of the non-Federal entity. ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. ? Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; ? Comply with the established accounting policies and practices of the non-Federal entity. ? Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. ? Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a total of 26 employees with salaries and benefits charged to the federal programs noted above during the 2021-22 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR ?200.430. Questioned Costs: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs.Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single funded employees and monthly certifications for multi-funded employees.
Criteria: Federal regulation 2 CFR ?200.430 states that ?charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.? Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? Be incorporated into the official records of the non-Federal entity. ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. ? Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; ? Comply with the established accounting policies and practices of the non-Federal entity. ? Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. ? Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a total of 26 employees with salaries and benefits charged to the federal programs noted above during the 2021-22 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR ?200.430. Questioned Costs: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs.Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single funded employees and monthly certifications for multi-funded employees.
Criteria: Federal regulation 2 CFR ?200.430 states that ?charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.? Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? Be incorporated into the official records of the non-Federal entity. ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. ? Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; ? Comply with the established accounting policies and practices of the non-Federal entity. ? Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. ? Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a total of 26 employees with salaries and benefits charged to the federal programs noted above during the 2021-22 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR ?200.430. Questioned Costs: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs.Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single funded employees and monthly certifications for multi-funded employees.
Criteria: Federal regulation 2 CFR ?200.430 states that ?charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.? Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? Be incorporated into the official records of the non-Federal entity. ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. ? Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; ? Comply with the established accounting policies and practices of the non-Federal entity. ? Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. ? Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a total of 26 employees with salaries and benefits charged to the federal programs noted above during the 2021-22 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR ?200.430. Questioned Costs: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs.Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single funded employees and monthly certifications for multi-funded employees.
Criteria: Federal regulation 2 CFR ?200.430 states that ?charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.? Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? Be incorporated into the official records of the non-Federal entity. ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. ? Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; ? Comply with the established accounting policies and practices of the non-Federal entity. ? Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. ? Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a total of 26 employees with salaries and benefits charged to the federal programs noted above during the 2021-22 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR ?200.430. Questioned Costs: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs.Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single funded employees and monthly certifications for multi-funded employees.
2022-001 ? Allowable Cost/Cost Principal Federal Program Information: Department of Education: Passed through the State of Maine Agency of Education ALN ? 84.425 ? Education Stabilization Fund Criteria: The following CFR(s) apply to this finding: 2 CFR 200.430(i)(1)(vii). Condition: During audit procedures, it was identified that the Unit did not complete the semi-annual time certifications/periodic time certifications for six employees. Cause: The District does not have the necessary internal controls over compliance. Effect: Expenses may not be properly allocated to the grant; this could result in unallowable expenses being charged and subsequently improperly reimbursed by federal funds. Identification of Questioned Costs: None identified. Context: A sample of six time certifications was reviewed. This is a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the District implement internal control processes and procedures to ensure that time and effort records for employees working are properly documented in accordance with the grant requirements. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by Five Towns Community School District.
2022-001 ? Allowable Cost/Cost Principal Federal Program Information: Department of Education: Passed through the State of Maine Agency of Education ALN ? 84.425 ? Education Stabilization Fund Criteria: The following CFR(s) apply to this finding: 2 CFR 200.430(i)(1)(vii). Condition: During audit procedures, it was identified that the Unit did not complete the semi-annual time certifications/periodic time certifications for six employees. Cause: The District does not have the necessary internal controls over compliance. Effect: Expenses may not be properly allocated to the grant; this could result in unallowable expenses being charged and subsequently improperly reimbursed by federal funds. Identification of Questioned Costs: None identified. Context: A sample of six time certifications was reviewed. This is a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the District implement internal control processes and procedures to ensure that time and effort records for employees working are properly documented in accordance with the grant requirements. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by Five Towns Community School District.
2022-001 ? Allowable Cost/Cost Principal Federal Program Information: Department of Education: Passed through the State of Maine Agency of Education ALN ? 84.425 ? Education Stabilization Fund Criteria: The following CFR(s) apply to this finding: 2 CFR 200.430(i)(1)(vii). Condition: During audit procedures, it was identified that the Unit did not complete the semi-annual time certifications/periodic time certifications for six employees. Cause: The District does not have the necessary internal controls over compliance. Effect: Expenses may not be properly allocated to the grant; this could result in unallowable expenses being charged and subsequently improperly reimbursed by federal funds. Identification of Questioned Costs: None identified. Context: A sample of six time certifications was reviewed. This is a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the District implement internal control processes and procedures to ensure that time and effort records for employees working are properly documented in accordance with the grant requirements. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by Five Towns Community School District.
2022-003 Department of Education Federal Financial Assistance Listing 84.425E, 84.425F, 84.425K Federal Award Numbers P425E201501, P425E201757, P425E200021, award year 2021 COVID-19 Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: The College is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E ? Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. 2 CFR 200.403(h) establishes that costs must be incurred during the approved budget period. Condition: In our sample of expenditures selected for testing, we noted the following items; a) Through testing of operational expenditures of the College, it was determined; a. Payroll expenditures charged to the award were not for costs newly associated with the coronavirus, a requirement communicated within the supplemental guidance in the Higher Education Emergency Relief Fund III Frequently Asked Questions published May 11, 2021 and updated May 24, 2021. b) Through testing of disbursements to students, it was determined; a. No support could not be provided to substantiate a secondary level of review was completed prior to disbursement of funds. b. 26 instances identified in which the College directly controlled how student?s use their emergency financial aid grant. c. 8 instances identified in which college discharged outstanding balance on student account for costs incurred prior to March 13, 2020. d. 2 instances identified in which the College charged coronavirus vaccine incentive payments under the student portion of HEERF award. Cause: The College did not have a full understanding of the federal program requirements between HEERF I, II and III as it relates to Activities Allowed, Allowable Costs, and Period of Performance. Effect: The College?s controls did not detect or correct the errors identified, which resulted in disallowed costs charged to the federal awards. Questioned Costs: Total questioned costs of $2,219,674Context/Sampling: a) For operational expenditures of the College a nonstatistical sample of 60 expenditures was selected for testing, including 7 non-payroll expenditures out of approximately 50 non-payroll transactions, accounting for approximately $143,000 of $245,000 total non-payroll costs charged to the federal program, and 53 payroll expenditures out of approximately 6,700 payroll transactions, accounting for approximately $74,000 of $1,920,000 total payroll costs charged to the federal program. b) For disbursements to students of the College a nonstatistical sample of 60 expenditures was selected for testing, including 43 disbursements funded from institutional portion out of approximately 600, accounting for approximately $53,000 of $711,000 total disbursements to students funded through institutional portion charged to the federal program, and 17 disbursements funded from student portion out of approximately 400, accounting for approximately $74,000 of $246,000 total disbursements to students funded through student portion charged to the federal program. Repeat Finding from Prior Year: No Recommendation: We recommend management review procedures and control processes to comply with federal requirements noted above. Views of Responsible Officials: Management is in agreement with the finding.
2022-003 Department of Education Federal Financial Assistance Listing 84.425E, 84.425F, 84.425K Federal Award Numbers P425E201501, P425E201757, P425E200021, award year 2021 COVID-19 Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: The College is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E ? Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. 2 CFR 200.403(h) establishes that costs must be incurred during the approved budget period. Condition: In our sample of expenditures selected for testing, we noted the following items; a) Through testing of operational expenditures of the College, it was determined; a. Payroll expenditures charged to the award were not for costs newly associated with the coronavirus, a requirement communicated within the supplemental guidance in the Higher Education Emergency Relief Fund III Frequently Asked Questions published May 11, 2021 and updated May 24, 2021. b) Through testing of disbursements to students, it was determined; a. No support could not be provided to substantiate a secondary level of review was completed prior to disbursement of funds. b. 26 instances identified in which the College directly controlled how student?s use their emergency financial aid grant. c. 8 instances identified in which college discharged outstanding balance on student account for costs incurred prior to March 13, 2020. d. 2 instances identified in which the College charged coronavirus vaccine incentive payments under the student portion of HEERF award. Cause: The College did not have a full understanding of the federal program requirements between HEERF I, II and III as it relates to Activities Allowed, Allowable Costs, and Period of Performance. Effect: The College?s controls did not detect or correct the errors identified, which resulted in disallowed costs charged to the federal awards. Questioned Costs: Total questioned costs of $2,219,674Context/Sampling: a) For operational expenditures of the College a nonstatistical sample of 60 expenditures was selected for testing, including 7 non-payroll expenditures out of approximately 50 non-payroll transactions, accounting for approximately $143,000 of $245,000 total non-payroll costs charged to the federal program, and 53 payroll expenditures out of approximately 6,700 payroll transactions, accounting for approximately $74,000 of $1,920,000 total payroll costs charged to the federal program. b) For disbursements to students of the College a nonstatistical sample of 60 expenditures was selected for testing, including 43 disbursements funded from institutional portion out of approximately 600, accounting for approximately $53,000 of $711,000 total disbursements to students funded through institutional portion charged to the federal program, and 17 disbursements funded from student portion out of approximately 400, accounting for approximately $74,000 of $246,000 total disbursements to students funded through student portion charged to the federal program. Repeat Finding from Prior Year: No Recommendation: We recommend management review procedures and control processes to comply with federal requirements noted above. Views of Responsible Officials: Management is in agreement with the finding.
2022-003 Department of Education Federal Financial Assistance Listing 84.425E, 84.425F, 84.425K Federal Award Numbers P425E201501, P425E201757, P425E200021, award year 2021 COVID-19 Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: The College is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E ? Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. 2 CFR 200.403(h) establishes that costs must be incurred during the approved budget period. Condition: In our sample of expenditures selected for testing, we noted the following items; a) Through testing of operational expenditures of the College, it was determined; a. Payroll expenditures charged to the award were not for costs newly associated with the coronavirus, a requirement communicated within the supplemental guidance in the Higher Education Emergency Relief Fund III Frequently Asked Questions published May 11, 2021 and updated May 24, 2021. b) Through testing of disbursements to students, it was determined; a. No support could not be provided to substantiate a secondary level of review was completed prior to disbursement of funds. b. 26 instances identified in which the College directly controlled how student?s use their emergency financial aid grant. c. 8 instances identified in which college discharged outstanding balance on student account for costs incurred prior to March 13, 2020. d. 2 instances identified in which the College charged coronavirus vaccine incentive payments under the student portion of HEERF award. Cause: The College did not have a full understanding of the federal program requirements between HEERF I, II and III as it relates to Activities Allowed, Allowable Costs, and Period of Performance. Effect: The College?s controls did not detect or correct the errors identified, which resulted in disallowed costs charged to the federal awards. Questioned Costs: Total questioned costs of $2,219,674Context/Sampling: a) For operational expenditures of the College a nonstatistical sample of 60 expenditures was selected for testing, including 7 non-payroll expenditures out of approximately 50 non-payroll transactions, accounting for approximately $143,000 of $245,000 total non-payroll costs charged to the federal program, and 53 payroll expenditures out of approximately 6,700 payroll transactions, accounting for approximately $74,000 of $1,920,000 total payroll costs charged to the federal program. b) For disbursements to students of the College a nonstatistical sample of 60 expenditures was selected for testing, including 43 disbursements funded from institutional portion out of approximately 600, accounting for approximately $53,000 of $711,000 total disbursements to students funded through institutional portion charged to the federal program, and 17 disbursements funded from student portion out of approximately 400, accounting for approximately $74,000 of $246,000 total disbursements to students funded through student portion charged to the federal program. Repeat Finding from Prior Year: No Recommendation: We recommend management review procedures and control processes to comply with federal requirements noted above. Views of Responsible Officials: Management is in agreement with the finding.
Criteria: 2 CFR, Part 200, Section 200.430 requires that charges to federal awards for salaries and wages be based on records that adequately reflect the work performed. These records must be supported by a system of internal controls that provide reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: The District did not maintain complete supporting documentation, time and effort logs, for salaries and wages charged to the grant. Cause: The District did not follow the requirement to maintain time and effort logs under this grant. Effect: The District does not have complete time and effort logs that fully document the time spent by employees under this grant. Recommendation: We recommend that the District maintain appropriate and complete time and effort logs for various grants, as applicable.
Criteria: 2 CFR, Part 200, Section 200.430 requires that charges to federal awards for salaries and wages be based on records that adequately reflect the work performed. These records must be supported by a system of internal controls that provide reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: The District did not maintain complete supporting documentation, time and effort logs, for salaries and wages charged to the grant. Cause: The District did not follow the requirement to maintain time and effort logs under this grant. Effect: The District does not have complete time and effort logs that fully document the time spent by employees under this grant. Recommendation: We recommend that the District maintain appropriate and complete time and effort logs for various grants, as applicable.
Criteria: 2 CFR, Part 200, Section 200.430 requires that charges to federal awards for salaries and wages be based on records that adequately reflect the work performed. These records must be supported by a system of internal controls that provide reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: The District did not maintain complete supporting documentation, time and effort logs, for salaries and wages charged to the grant. Cause: The District did not follow the requirement to maintain time and effort logs under this grant. Effect: The District does not have complete time and effort logs that fully document the time spent by employees under this grant. Recommendation: We recommend that the District maintain appropriate and complete time and effort logs for various grants, as applicable.
Criteria: 2 CFR, Part 200, Section 200.430 requires that charges to federal awards for salaries and wages be based on records that adequately reflect the work performed. These records must be supported by a system of internal controls that provide reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: The District did not maintain complete supporting documentation, time and effort logs, for salaries and wages charged to the grant. Cause: The District did not follow the requirement to maintain time and effort logs under this grant. Effect: The District does not have complete time and effort logs that fully document the time spent by employees under this grant. Recommendation: We recommend that the District maintain appropriate and complete time and effort logs for various grants, as applicable.
Criteria: 2 CFR, Part 200, Section 200.430 requires that charges to federal awards for salaries and wages be based on records that adequately reflect the work performed. These records must be supported by a system of internal controls that provide reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: The District did not maintain complete supporting documentation, time and effort logs, for salaries and wages charged to the grant. Cause: The District did not follow the requirement to maintain time and effort logs under this grant. Effect: The District does not have complete time and effort logs that fully document the time spent by employees under this grant. Recommendation: We recommend that the District maintain appropriate and complete time and effort logs for various grants, as applicable.
FINDING 2022-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20/21, FY 21/22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context A sample of 40 vendor disbursements from the School Lunch fund was selected for testing to verify the transactions were for allowable activities and costs. There were 3 of the 40 transactions, totaling $4,129, that were paid to vendors for which the School Corporation could not provide documentation to support the costs. As such, the 3 transactions could not be verified as an allowable activity or cost of the food service program and were considered questioned costs. Due to the number and magnitude of exceptions, per auditor judgment, we concluded it would not be appropriate to examine the remaining 29 disbursements. Additionally, the School Corporation incurred costs in the amount of $49,365 paid from the School Lunch fund for a vehicle used to distribute meals to students at the Indiana Department of Education approved meal sites during the COVID-19 pandemic shutdown. The School Corporation could not provide supporting documentation that prior written approval was received from the pass-through entity. Finally, in fiscal year 2021-2022, the School Corporation paid a portion of the Assistant Superintendent of Schools salary from the School Lunch fund without supporting documentation to support the percentage paid. The Assistant Superintendent of Schools spent time on federal program and nonfederal program activities, but did not maintain documentation of time spent on each activity. The total paid to the Assistant Superintendent of Schools from the School Lunch fund without proper documentation was $29,753. The costs that were not properly documented were considered questioned costs. The lack of internal controls, availability of supporting documentation, and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (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 in part: ". . . 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. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 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 200.439(b) states in part: "The following rules of allowability must apply to equipment and other capital expenditures: (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. . . ." 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 established an effective system of internal controls that would have ensured compliance or that supporting documentation would have been maintained and made available for audit with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective system of internal controls and retain and provide supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirements listed above. The failure to design and implement an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $83,247 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and to comply with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. 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 - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20/21, FY 21/22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context A sample of 40 vendor disbursements from the School Lunch fund was selected for testing to verify the transactions were for allowable activities and costs. There were 3 of the 40 transactions, totaling $4,129, that were paid to vendors for which the School Corporation could not provide documentation to support the costs. As such, the 3 transactions could not be verified as an allowable activity or cost of the food service program and were considered questioned costs. Due to the number and magnitude of exceptions, per auditor judgment, we concluded it would not be appropriate to examine the remaining 29 disbursements. Additionally, the School Corporation incurred costs in the amount of $49,365 paid from the School Lunch fund for a vehicle used to distribute meals to students at the Indiana Department of Education approved meal sites during the COVID-19 pandemic shutdown. The School Corporation could not provide supporting documentation that prior written approval was received from the pass-through entity. Finally, in fiscal year 2021-2022, the School Corporation paid a portion of the Assistant Superintendent of Schools salary from the School Lunch fund without supporting documentation to support the percentage paid. The Assistant Superintendent of Schools spent time on federal program and nonfederal program activities, but did not maintain documentation of time spent on each activity. The total paid to the Assistant Superintendent of Schools from the School Lunch fund without proper documentation was $29,753. The costs that were not properly documented were considered questioned costs. The lack of internal controls, availability of supporting documentation, and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (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 in part: ". . . 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. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 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 200.439(b) states in part: "The following rules of allowability must apply to equipment and other capital expenditures: (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. . . ." 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 established an effective system of internal controls that would have ensured compliance or that supporting documentation would have been maintained and made available for audit with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective system of internal controls and retain and provide supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirements listed above. The failure to design and implement an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $83,247 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and to comply with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. 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 - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20/21, FY 21/22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context A sample of 40 vendor disbursements from the School Lunch fund was selected for testing to verify the transactions were for allowable activities and costs. There were 3 of the 40 transactions, totaling $4,129, that were paid to vendors for which the School Corporation could not provide documentation to support the costs. As such, the 3 transactions could not be verified as an allowable activity or cost of the food service program and were considered questioned costs. Due to the number and magnitude of exceptions, per auditor judgment, we concluded it would not be appropriate to examine the remaining 29 disbursements. Additionally, the School Corporation incurred costs in the amount of $49,365 paid from the School Lunch fund for a vehicle used to distribute meals to students at the Indiana Department of Education approved meal sites during the COVID-19 pandemic shutdown. The School Corporation could not provide supporting documentation that prior written approval was received from the pass-through entity. Finally, in fiscal year 2021-2022, the School Corporation paid a portion of the Assistant Superintendent of Schools salary from the School Lunch fund without supporting documentation to support the percentage paid. The Assistant Superintendent of Schools spent time on federal program and nonfederal program activities, but did not maintain documentation of time spent on each activity. The total paid to the Assistant Superintendent of Schools from the School Lunch fund without proper documentation was $29,753. The costs that were not properly documented were considered questioned costs. The lack of internal controls, availability of supporting documentation, and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (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 in part: ". . . 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. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 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 200.439(b) states in part: "The following rules of allowability must apply to equipment and other capital expenditures: (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. . . ." 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 established an effective system of internal controls that would have ensured compliance or that supporting documentation would have been maintained and made available for audit with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective system of internal controls and retain and provide supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirements listed above. The failure to design and implement an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $83,247 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and to comply with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. 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 - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20/21, FY 21/22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context A sample of 40 vendor disbursements from the School Lunch fund was selected for testing to verify the transactions were for allowable activities and costs. There were 3 of the 40 transactions, totaling $4,129, that were paid to vendors for which the School Corporation could not provide documentation to support the costs. As such, the 3 transactions could not be verified as an allowable activity or cost of the food service program and were considered questioned costs. Due to the number and magnitude of exceptions, per auditor judgment, we concluded it would not be appropriate to examine the remaining 29 disbursements. Additionally, the School Corporation incurred costs in the amount of $49,365 paid from the School Lunch fund for a vehicle used to distribute meals to students at the Indiana Department of Education approved meal sites during the COVID-19 pandemic shutdown. The School Corporation could not provide supporting documentation that prior written approval was received from the pass-through entity. Finally, in fiscal year 2021-2022, the School Corporation paid a portion of the Assistant Superintendent of Schools salary from the School Lunch fund without supporting documentation to support the percentage paid. The Assistant Superintendent of Schools spent time on federal program and nonfederal program activities, but did not maintain documentation of time spent on each activity. The total paid to the Assistant Superintendent of Schools from the School Lunch fund without proper documentation was $29,753. The costs that were not properly documented were considered questioned costs. The lack of internal controls, availability of supporting documentation, and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (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 in part: ". . . 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. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 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 200.439(b) states in part: "The following rules of allowability must apply to equipment and other capital expenditures: (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. . . ." 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 established an effective system of internal controls that would have ensured compliance or that supporting documentation would have been maintained and made available for audit with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective system of internal controls and retain and provide supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirements listed above. The failure to design and implement an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $83,247 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and to comply with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. 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 - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20/21, FY 21/22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context A sample of 40 vendor disbursements from the School Lunch fund was selected for testing to verify the transactions were for allowable activities and costs. There were 3 of the 40 transactions, totaling $4,129, that were paid to vendors for which the School Corporation could not provide documentation to support the costs. As such, the 3 transactions could not be verified as an allowable activity or cost of the food service program and were considered questioned costs. Due to the number and magnitude of exceptions, per auditor judgment, we concluded it would not be appropriate to examine the remaining 29 disbursements. Additionally, the School Corporation incurred costs in the amount of $49,365 paid from the School Lunch fund for a vehicle used to distribute meals to students at the Indiana Department of Education approved meal sites during the COVID-19 pandemic shutdown. The School Corporation could not provide supporting documentation that prior written approval was received from the pass-through entity. Finally, in fiscal year 2021-2022, the School Corporation paid a portion of the Assistant Superintendent of Schools salary from the School Lunch fund without supporting documentation to support the percentage paid. The Assistant Superintendent of Schools spent time on federal program and nonfederal program activities, but did not maintain documentation of time spent on each activity. The total paid to the Assistant Superintendent of Schools from the School Lunch fund without proper documentation was $29,753. The costs that were not properly documented were considered questioned costs. The lack of internal controls, availability of supporting documentation, and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (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 in part: ". . . 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. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 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 200.439(b) states in part: "The following rules of allowability must apply to equipment and other capital expenditures: (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. . . ." 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 established an effective system of internal controls that would have ensured compliance or that supporting documentation would have been maintained and made available for audit with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective system of internal controls and retain and provide supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirements listed above. The failure to design and implement an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $83,247 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and to comply with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. 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 - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20/21, FY 21/22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context A sample of 40 vendor disbursements from the School Lunch fund was selected for testing to verify the transactions were for allowable activities and costs. There were 3 of the 40 transactions, totaling $4,129, that were paid to vendors for which the School Corporation could not provide documentation to support the costs. As such, the 3 transactions could not be verified as an allowable activity or cost of the food service program and were considered questioned costs. Due to the number and magnitude of exceptions, per auditor judgment, we concluded it would not be appropriate to examine the remaining 29 disbursements. Additionally, the School Corporation incurred costs in the amount of $49,365 paid from the School Lunch fund for a vehicle used to distribute meals to students at the Indiana Department of Education approved meal sites during the COVID-19 pandemic shutdown. The School Corporation could not provide supporting documentation that prior written approval was received from the pass-through entity. Finally, in fiscal year 2021-2022, the School Corporation paid a portion of the Assistant Superintendent of Schools salary from the School Lunch fund without supporting documentation to support the percentage paid. The Assistant Superintendent of Schools spent time on federal program and nonfederal program activities, but did not maintain documentation of time spent on each activity. The total paid to the Assistant Superintendent of Schools from the School Lunch fund without proper documentation was $29,753. The costs that were not properly documented were considered questioned costs. The lack of internal controls, availability of supporting documentation, and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (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 in part: ". . . 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. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 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 200.439(b) states in part: "The following rules of allowability must apply to equipment and other capital expenditures: (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. . . ." 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 established an effective system of internal controls that would have ensured compliance or that supporting documentation would have been maintained and made available for audit with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective system of internal controls and retain and provide supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirements listed above. The failure to design and implement an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $83,247 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and to comply with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. 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 - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20/21, FY 21/22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context A sample of 40 vendor disbursements from the School Lunch fund was selected for testing to verify the transactions were for allowable activities and costs. There were 3 of the 40 transactions, totaling $4,129, that were paid to vendors for which the School Corporation could not provide documentation to support the costs. As such, the 3 transactions could not be verified as an allowable activity or cost of the food service program and were considered questioned costs. Due to the number and magnitude of exceptions, per auditor judgment, we concluded it would not be appropriate to examine the remaining 29 disbursements. Additionally, the School Corporation incurred costs in the amount of $49,365 paid from the School Lunch fund for a vehicle used to distribute meals to students at the Indiana Department of Education approved meal sites during the COVID-19 pandemic shutdown. The School Corporation could not provide supporting documentation that prior written approval was received from the pass-through entity. Finally, in fiscal year 2021-2022, the School Corporation paid a portion of the Assistant Superintendent of Schools salary from the School Lunch fund without supporting documentation to support the percentage paid. The Assistant Superintendent of Schools spent time on federal program and nonfederal program activities, but did not maintain documentation of time spent on each activity. The total paid to the Assistant Superintendent of Schools from the School Lunch fund without proper documentation was $29,753. The costs that were not properly documented were considered questioned costs. The lack of internal controls, availability of supporting documentation, and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (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 in part: ". . . 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. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 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 200.439(b) states in part: "The following rules of allowability must apply to equipment and other capital expenditures: (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. . . ." 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 established an effective system of internal controls that would have ensured compliance or that supporting documentation would have been maintained and made available for audit with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective system of internal controls and retain and provide supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirements listed above. The failure to design and implement an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $83,247 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and to comply with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. 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 - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20/21, FY 21/22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context A sample of 40 vendor disbursements from the School Lunch fund was selected for testing to verify the transactions were for allowable activities and costs. There were 3 of the 40 transactions, totaling $4,129, that were paid to vendors for which the School Corporation could not provide documentation to support the costs. As such, the 3 transactions could not be verified as an allowable activity or cost of the food service program and were considered questioned costs. Due to the number and magnitude of exceptions, per auditor judgment, we concluded it would not be appropriate to examine the remaining 29 disbursements. Additionally, the School Corporation incurred costs in the amount of $49,365 paid from the School Lunch fund for a vehicle used to distribute meals to students at the Indiana Department of Education approved meal sites during the COVID-19 pandemic shutdown. The School Corporation could not provide supporting documentation that prior written approval was received from the pass-through entity. Finally, in fiscal year 2021-2022, the School Corporation paid a portion of the Assistant Superintendent of Schools salary from the School Lunch fund without supporting documentation to support the percentage paid. The Assistant Superintendent of Schools spent time on federal program and nonfederal program activities, but did not maintain documentation of time spent on each activity. The total paid to the Assistant Superintendent of Schools from the School Lunch fund without proper documentation was $29,753. The costs that were not properly documented were considered questioned costs. The lack of internal controls, availability of supporting documentation, and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (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 in part: ". . . 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. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 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 200.439(b) states in part: "The following rules of allowability must apply to equipment and other capital expenditures: (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. . . ." 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 established an effective system of internal controls that would have ensured compliance or that supporting documentation would have been maintained and made available for audit with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective system of internal controls and retain and provide supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirements listed above. The failure to design and implement an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $83,247 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and to comply with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. 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 - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20/21, FY 21/22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context A sample of 40 vendor disbursements from the School Lunch fund was selected for testing to verify the transactions were for allowable activities and costs. There were 3 of the 40 transactions, totaling $4,129, that were paid to vendors for which the School Corporation could not provide documentation to support the costs. As such, the 3 transactions could not be verified as an allowable activity or cost of the food service program and were considered questioned costs. Due to the number and magnitude of exceptions, per auditor judgment, we concluded it would not be appropriate to examine the remaining 29 disbursements. Additionally, the School Corporation incurred costs in the amount of $49,365 paid from the School Lunch fund for a vehicle used to distribute meals to students at the Indiana Department of Education approved meal sites during the COVID-19 pandemic shutdown. The School Corporation could not provide supporting documentation that prior written approval was received from the pass-through entity. Finally, in fiscal year 2021-2022, the School Corporation paid a portion of the Assistant Superintendent of Schools salary from the School Lunch fund without supporting documentation to support the percentage paid. The Assistant Superintendent of Schools spent time on federal program and nonfederal program activities, but did not maintain documentation of time spent on each activity. The total paid to the Assistant Superintendent of Schools from the School Lunch fund without proper documentation was $29,753. The costs that were not properly documented were considered questioned costs. The lack of internal controls, availability of supporting documentation, and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.333 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (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 in part: ". . . 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. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 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 200.439(b) states in part: "The following rules of allowability must apply to equipment and other capital expenditures: (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. . . ." 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 established an effective system of internal controls that would have ensured compliance or that supporting documentation would have been maintained and made available for audit with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective system of internal controls and retain and provide supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirements listed above. The failure to design and implement an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $83,247 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and to comply with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2022-002 ? Allowable Costs and Allowable Activates ? Absence of Records in support of Personal Costs charged to federal programs (Material Weakness) U.S. Department of Education Elementary and Secondary School Emergency Relief Fund (Federal Assistance Listing #84.425) Federal: Federal Award Year: 2021-2022 Criteria: Per 2 CFR ?200.430, Compensation - personal services, (i) Standards for Documentation of Personnel Expenses, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Among other requirements, these records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; ? Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis; and, ? 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: For this program, there was no evidence that actual employee time was tracked, reviewed and approved, or that the actual time incurred was used as a basis for allocating personnel charges to the federal grant. Cause: Current policies and procedures of the Charter School do not require documented timekeeping by employees who worked on the grant program, and therefore, there as no documentation that such time had been appropriately reviewed and approved, prior to being charged to the grant. Effect: Personnel costs charged to federal awards without appropriate documentation may be subject to disallowance. Questioned Costs: $14,160 Context: For our direct labor allowable costs sample, The Charter School?s management indicated that all 40 expenditure selections, totaling $14,160, were charged to the grant based on visual check ins by the operating manager onsite of the employees who conducted the related afterschool activities associated with the grant. This finding appears to be a systemic problem and that the total population which could be subject to similar questioned costs is $171,140. There was no further documentation available for our review and inspection, such as time sheets with employee or supervisor signatures, which would provide support that employees were present at the time frames paid for their services. Identified as a Repeat Finding: No. Recommendation: We recommend that the Charter School implement polices and training to staff in order to gain an understanding of the uniform guidance compliance requirements. Views of Responsible Officials: See management?s response and corrective action plan.
Finding 2022-002 ? Allowable Costs and Allowable Activates ? Absence of Records in support of Personal Costs charged to federal programs (Material Weakness) U.S. Department of Education Elementary and Secondary School Emergency Relief Fund (Federal Assistance Listing #84.425) Federal: Federal Award Year: 2021-2022 Criteria: Per 2 CFR ?200.430, Compensation - personal services, (i) Standards for Documentation of Personnel Expenses, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Among other requirements, these records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; ? Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis; and, ? 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: For this program, there was no evidence that actual employee time was tracked, reviewed and approved, or that the actual time incurred was used as a basis for allocating personnel charges to the federal grant. Cause: Current policies and procedures of the Charter School do not require documented timekeeping by employees who worked on the grant program, and therefore, there as no documentation that such time had been appropriately reviewed and approved, prior to being charged to the grant. Effect: Personnel costs charged to federal awards without appropriate documentation may be subject to disallowance. Questioned Costs: $14,160 Context: For our direct labor allowable costs sample, The Charter School?s management indicated that all 40 expenditure selections, totaling $14,160, were charged to the grant based on visual check ins by the operating manager onsite of the employees who conducted the related afterschool activities associated with the grant. This finding appears to be a systemic problem and that the total population which could be subject to similar questioned costs is $171,140. There was no further documentation available for our review and inspection, such as time sheets with employee or supervisor signatures, which would provide support that employees were present at the time frames paid for their services. Identified as a Repeat Finding: No. Recommendation: We recommend that the Charter School implement polices and training to staff in order to gain an understanding of the uniform guidance compliance requirements. Views of Responsible Officials: See management?s response and corrective action plan.
FINDING 2022-003 Information on the federal program: Subject: Child Nutrition Cluster- Allowable Activities, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Lunch Program Assistance Listing Number: 10.555 Federal Award Number(s) and Year(s)(or Other Identifying Numbers): Pass-Through Entity: Indiana Department of Education Compliance Requirements: Allowable Activities, Allowable Costs/Cost Principles Audit Finding: Material Weakness, Modified Opinion Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." USDA Indirect Cost Guidance Memo SP 60-2016 "It is unallowable to bill the nonprofit school food service account (NSFSA) for indirect costs that were previously paid from the general fund unless an agreement exists to show that the district had been ?loaning? the NSFSA funds to cover the indirect costs in one or more prior years." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." Section III ? Federal Award Findings and Questioned Costs (Continued) FINDING 2021-003 (Continued) 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (i) Maintain a nonprofit school food service; (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 in part: "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. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 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. . . ." Section III ? Federal Award Findings and Questioned Costs (Continued) FINDING 2021-003 (Continued) Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Allowable Activities and Allowable Costs/Cost Principles compliance requirements. The School Corporation did not have a documented internal control over payroll claims allocation reports in place relating to the Allowable Activities and Allowable Costs/Cost Principles compliance requirements. The School Corporation did not have internal controls over indirect costs that would ensure they were properly paid. Cause: Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Activities Allowed and Allowable Costs/Cost Principles compliance requirement. Effect: The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: Known questioned costs of $74,500 were identified. Context: The School Corporation was approved for an indirect cost rate for fiscal years 2019-2020 and 2020-2021 in order to allocate indirect costs to the School Corporation?s Cafeteria fund. However, the School Corporation did not charge these indirect costs in the appropriate time frame. On June 30, 2022 the School Corporation applied the indirect costs retroactively for the child nutrition cluster fiscal year's 2019-2020 and 2020-2021 in the amounts of approximately $33,150 and $41,350, respectively from the Cafeteria Fund to the Operations Fund. For after the fact transfers, the School Corporation is required to enter into an inter-fund loan agreement and to document the Operation fund support of the School Lunch fund. The School Corporation did not have a documented internal control over payroll claims in place relating to the Allowable Activities and Allowable Costs compliance requirements. There was no documented, formal review over the supporting payroll distribution report to support the amount charged and allocated for each employee. The lack of internal controls was a systemic issue throughout the audit period. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls for the timing of indirect costs claims and transfers. Views of Responsible Officials and Planned Corrective Actions: Management understands the finding, has prepared an initial corrective action plan and will discuss resolution with Indiana Department of Education.
FINDING 2022-003 Information on the federal program: Subject: Child Nutrition Cluster- Allowable Activities, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Lunch Program Assistance Listing Number: 10.555 Federal Award Number(s) and Year(s)(or Other Identifying Numbers): Pass-Through Entity: Indiana Department of Education Compliance Requirements: Allowable Activities, Allowable Costs/Cost Principles Audit Finding: Material Weakness, Modified Opinion Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." USDA Indirect Cost Guidance Memo SP 60-2016 "It is unallowable to bill the nonprofit school food service account (NSFSA) for indirect costs that were previously paid from the general fund unless an agreement exists to show that the district had been ?loaning? the NSFSA funds to cover the indirect costs in one or more prior years." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." Section III ? Federal Award Findings and Questioned Costs (Continued) FINDING 2021-003 (Continued) 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (i) Maintain a nonprofit school food service; (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 in part: "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. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 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. . . ." Section III ? Federal Award Findings and Questioned Costs (Continued) FINDING 2021-003 (Continued) Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Allowable Activities and Allowable Costs/Cost Principles compliance requirements. The School Corporation did not have a documented internal control over payroll claims allocation reports in place relating to the Allowable Activities and Allowable Costs/Cost Principles compliance requirements. The School Corporation did not have internal controls over indirect costs that would ensure they were properly paid. Cause: Management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the Activities Allowed and Allowable Costs/Cost Principles compliance requirement. Effect: The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: Known questioned costs of $74,500 were identified. Context: The School Corporation was approved for an indirect cost rate for fiscal years 2019-2020 and 2020-2021 in order to allocate indirect costs to the School Corporation?s Cafeteria fund. However, the School Corporation did not charge these indirect costs in the appropriate time frame. On June 30, 2022 the School Corporation applied the indirect costs retroactively for the child nutrition cluster fiscal year's 2019-2020 and 2020-2021 in the amounts of approximately $33,150 and $41,350, respectively from the Cafeteria Fund to the Operations Fund. For after the fact transfers, the School Corporation is required to enter into an inter-fund loan agreement and to document the Operation fund support of the School Lunch fund. The School Corporation did not have a documented internal control over payroll claims in place relating to the Allowable Activities and Allowable Costs compliance requirements. There was no documented, formal review over the supporting payroll distribution report to support the amount charged and allocated for each employee. The lack of internal controls was a systemic issue throughout the audit period. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls for the timing of indirect costs claims and transfers. Views of Responsible Officials and Planned Corrective Actions: Management understands the finding, has prepared an initial corrective action plan and will discuss resolution with Indiana Department of Education.
Federal Agency: U.S. Department of Health and Human Services Pass-Through Agency: N/A ? Direct Award Program Name: Head Start Cluster Assistance Listing Number:93.600 Award Numbers: 05CH01205802, 05HE00139001C6, 05HP00044002 Category of Finding: Allowable Costs/Cost Principles Criteria: Reports reflecting the distribution of activity of each employee much be maintained for all staff members whose compensation is charged, in whole or in part, directly to awards in accordance with the Uniform Guidance CFR Section 200.430 ? Compensation ? personal Services. Charges to Federal awards must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated and incorporated into the official records of the Center. These records much also support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one program or activity. Condition/Context: The Center uses the Time Recording module of its Human Resources Information System (HRIS) to allocate gross wages for all employees. Management asserts that the HRIS is populated with labor allocations reflect of program benefit for each employee and four times during each fiscal year, Management re-evaluates labor allocation for potential changes. During fiscal year 2022, spreadsheets were used, outside of HRIS data tables, for tracking labor allocations. The use of spreadsheets did not provide for a consistent documented procedure that could be effectively tested to demonstrate that a system of internal controls was in place to provide reasonable assurance changes to allocations were supported, accurate and allowable. Cause: The Center?s significant growth, along with staff challenges during COVID recovery, and the transition to a new HIRS resulted in extensive use of spreadsheets for the tracking of labor allocations and changes to allocations during the year and internal control processes that were not fully developed to address these changes. Effect: The Center?s use of spreadsheets for labor allocations did not provide a documented system of internal control that could be used to test changes to allocations made during the year. Questioned Costs: None. Repeat Finding: No Recommendation: Management should review the written fiscal policy and procedures as it relates to the allocation of salaries and ensure that what is documented is reflective of internal controls and processes in place to provide reasonable assurance that the charges are accurate, allowable and properly allocated and incorporated into the official records of the Center. We recommend that the HIRS Time Recording module be used to maintain records of daily entries for exempt staff. The reporting capability of the HIRS should be the only source used to generate the calculation of wage allocations entered into the general ledgers. The allocation reviews performed throughout the year of program benefit assigned to each position should be documented and approved such that there is the ability to track determinations and related support. We noted that Management has taken several steps to improve this process by the end of the fiscal year. Management?s response: Management agrees with this finding. Please see corrective action plan.
A. Finding on Internal Control over Compliance Finding Reference: 2022-001 Federal Agency: U.S. Department of Education Federal Program: IDEA ? Part B, Section 611 (84.027) IDEA ? Part B, Section 619 (84.173) Compliance Requirement: Activities Allowed or Unallowed Type of Finding: a) Significant Deficiencies in Internal Control Over Compliance b) Compliance Finding Criteria: According to 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget?s Uniform Grant Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; b) Be incorporated into the official records of the non-Federal entity; c) Reasonably reflect the total activity for which the employee is compensated by the non- Federal entity; d) Encompass both federally assisted and all other activities compensated by the non-Federal entity; e) Support the distribution of the employee?s salary or wages amount 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: Several of the District employees whose time was being charged to the grants but who were working less than 100% of the time in the federal award program, were required to complete monthly certifications of the percentage of time they worked in each federal award program however, they were not completed timely. Cause: The School District did not have adequate review procedures in place to ensure that the monthly certifications were being completed by each employee working in the federal award programs timely. Effect: Without adequate internal controls over the employee?s time being charged to the grant and the certification requirement, the School District cannot ensure that federal funds are paid in accordance with allowable costs and the time worked in the grant. Additionally, they cannot easily monitor the amount of funds that can be charged to the grant for salaries and benefits. Payments that do not agree with the time worked are unallowable and subject to recovery by the grantor. Identification of a Repeat Finding: This is a repeat finding for IDEA, Section 611 (84.027) and Section 619 (84.173), from the immediate previous audit, 2021-001. Questioned Costs: The employees? certifications in questions were reviewed and after reviewing the allocation of each employees? time it was determined that the time being charged to the grant was appropriate, therefore, there were no questioned costs. Recommendation: We recommend that the District have proper internal controls in place to ensure that the employees working in the grants are certifying their actual percent of time and effort that is being spent working in the federal award program. Monthly certifications should be completed if less than 100% of time is being worked in the federal award program or semiannually if 100% of time is being spent. Management Response: The District agrees with the finding and will implement adequate checks and balances to ensure that this problem does not recur. Please refer to the corrective action plan on the following page.
A. Finding on Internal Control over Compliance Finding Reference: 2022-001 Federal Agency: U.S. Department of Education Federal Program: IDEA ? Part B, Section 611 (84.027) IDEA ? Part B, Section 619 (84.173) Compliance Requirement: Activities Allowed or Unallowed Type of Finding: a) Significant Deficiencies in Internal Control Over Compliance b) Compliance Finding Criteria: According to 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget?s Uniform Grant Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; b) Be incorporated into the official records of the non-Federal entity; c) Reasonably reflect the total activity for which the employee is compensated by the non- Federal entity; d) Encompass both federally assisted and all other activities compensated by the non-Federal entity; e) Support the distribution of the employee?s salary or wages amount 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: Several of the District employees whose time was being charged to the grants but who were working less than 100% of the time in the federal award program, were required to complete monthly certifications of the percentage of time they worked in each federal award program however, they were not completed timely. Cause: The School District did not have adequate review procedures in place to ensure that the monthly certifications were being completed by each employee working in the federal award programs timely. Effect: Without adequate internal controls over the employee?s time being charged to the grant and the certification requirement, the School District cannot ensure that federal funds are paid in accordance with allowable costs and the time worked in the grant. Additionally, they cannot easily monitor the amount of funds that can be charged to the grant for salaries and benefits. Payments that do not agree with the time worked are unallowable and subject to recovery by the grantor. Identification of a Repeat Finding: This is a repeat finding for IDEA, Section 611 (84.027) and Section 619 (84.173), from the immediate previous audit, 2021-001. Questioned Costs: The employees? certifications in questions were reviewed and after reviewing the allocation of each employees? time it was determined that the time being charged to the grant was appropriate, therefore, there were no questioned costs. Recommendation: We recommend that the District have proper internal controls in place to ensure that the employees working in the grants are certifying their actual percent of time and effort that is being spent working in the federal award program. Monthly certifications should be completed if less than 100% of time is being worked in the federal award program or semiannually if 100% of time is being spent. Management Response: The District agrees with the finding and will implement adequate checks and balances to ensure that this problem does not recur. Please refer to the corrective action plan on the following page.
Research and Development Cluster, Various Assistance Listing Numbers, Various Agencies, Award Year 2022 Criteria or Specific Requirement ? Special Tests and Provisions ? Key Personnel ? 2 CFR ? 200.430(i) Condition ? The University is required to implement a system of internal controls that provide reasonable assurance of compliance with key personnel requirements specified in grant applications and proposals. Questioned Costs ? None Context ? The University?s time and effort review process includes review of monthly labor certification reports. These reports were not consistently reviewed in a timely manner during FY 2022. Effect ? Employee time charged to grants was not certified timely during the year. Cause ? The University?s internal controls did not include follow-up to ensure that key personnel were reviewing and approving personnel costs in a timely manner. Identification as a Repeat Finding, if applicable ? N/A Recommendation ? The University should ensure internal controls related to documenting effort and certification are aligned with Uniform Guidance standards. Views of Responsible Officials and Planned Corrective Actions ? Management concurs with the finding and proper controls are being implemented during FY2023. Management will implement a labor certification monitoring and escalation process. A reminder will be distributed to all principal investigators reminding them of the University?s policy and their responsibilities in the review and confirmation of their personnel expenditures.
Research and Development Cluster, Various Assistance Listing Numbers, Various Agencies, Award Year 2022 Criteria or Specific Requirement ? Special Tests and Provisions ? Key Personnel ? 2 CFR ? 200.430(i) Condition ? The University is required to implement a system of internal controls that provide reasonable assurance of compliance with key personnel requirements specified in grant applications and proposals. Questioned Costs ? None Context ? The University?s time and effort review process includes review of monthly labor certification reports. These reports were not consistently reviewed in a timely manner during FY 2022. Effect ? Employee time charged to grants was not certified timely during the year. Cause ? The University?s internal controls did not include follow-up to ensure that key personnel were reviewing and approving personnel costs in a timely manner. Identification as a Repeat Finding, if applicable ? N/A Recommendation ? The University should ensure internal controls related to documenting effort and certification are aligned with Uniform Guidance standards. Views of Responsible Officials and Planned Corrective Actions ? Management concurs with the finding and proper controls are being implemented during FY2023. Management will implement a labor certification monitoring and escalation process. A reminder will be distributed to all principal investigators reminding them of the University?s policy and their responsibilities in the review and confirmation of their personnel expenditures.
Research and Development Cluster, Various Assistance Listing Numbers, Various Agencies, Award Year 2022 Criteria or Specific Requirement ? Special Tests and Provisions ? Key Personnel ? 2 CFR ? 200.430(i) Condition ? The University is required to implement a system of internal controls that provide reasonable assurance of compliance with key personnel requirements specified in grant applications and proposals. Questioned Costs ? None Context ? The University?s time and effort review process includes review of monthly labor certification reports. These reports were not consistently reviewed in a timely manner during FY 2022. Effect ? Employee time charged to grants was not certified timely during the year. Cause ? The University?s internal controls did not include follow-up to ensure that key personnel were reviewing and approving personnel costs in a timely manner. Identification as a Repeat Finding, if applicable ? N/A Recommendation ? The University should ensure internal controls related to documenting effort and certification are aligned with Uniform Guidance standards. Views of Responsible Officials and Planned Corrective Actions ? Management concurs with the finding and proper controls are being implemented during FY2023. Management will implement a labor certification monitoring and escalation process. A reminder will be distributed to all principal investigators reminding them of the University?s policy and their responsibilities in the review and confirmation of their personnel expenditures.
Research and Development Cluster, Various Assistance Listing Numbers, Various Agencies, Award Year 2022 Criteria or Specific Requirement ? Special Tests and Provisions ? Key Personnel ? 2 CFR ? 200.430(i) Condition ? The University is required to implement a system of internal controls that provide reasonable assurance of compliance with key personnel requirements specified in grant applications and proposals. Questioned Costs ? None Context ? The University?s time and effort review process includes review of monthly labor certification reports. These reports were not consistently reviewed in a timely manner during FY 2022. Effect ? Employee time charged to grants was not certified timely during the year. Cause ? The University?s internal controls did not include follow-up to ensure that key personnel were reviewing and approving personnel costs in a timely manner. Identification as a Repeat Finding, if applicable ? N/A Recommendation ? The University should ensure internal controls related to documenting effort and certification are aligned with Uniform Guidance standards. Views of Responsible Officials and Planned Corrective Actions ? Management concurs with the finding and proper controls are being implemented during FY2023. Management will implement a labor certification monitoring and escalation process. A reminder will be distributed to all principal investigators reminding them of the University?s policy and their responsibilities in the review and confirmation of their personnel expenditures.
Research and Development Cluster, Various Assistance Listing Numbers, Various Agencies, Award Year 2022 Criteria or Specific Requirement ? Special Tests and Provisions ? Key Personnel ? 2 CFR ? 200.430(i) Condition ? The University is required to implement a system of internal controls that provide reasonable assurance of compliance with key personnel requirements specified in grant applications and proposals. Questioned Costs ? None Context ? The University?s time and effort review process includes review of monthly labor certification reports. These reports were not consistently reviewed in a timely manner during FY 2022. Effect ? Employee time charged to grants was not certified timely during the year. Cause ? The University?s internal controls did not include follow-up to ensure that key personnel were reviewing and approving personnel costs in a timely manner. Identification as a Repeat Finding, if applicable ? N/A Recommendation ? The University should ensure internal controls related to documenting effort and certification are aligned with Uniform Guidance standards. Views of Responsible Officials and Planned Corrective Actions ? Management concurs with the finding and proper controls are being implemented during FY2023. Management will implement a labor certification monitoring and escalation process. A reminder will be distributed to all principal investigators reminding them of the University?s policy and their responsibilities in the review and confirmation of their personnel expenditures.
Research and Development Cluster, Various Assistance Listing Numbers, Various Agencies, Award Year 2022 Criteria or Specific Requirement ? Special Tests and Provisions ? Key Personnel ? 2 CFR ? 200.430(i) Condition ? The University is required to implement a system of internal controls that provide reasonable assurance of compliance with key personnel requirements specified in grant applications and proposals. Questioned Costs ? None Context ? The University?s time and effort review process includes review of monthly labor certification reports. These reports were not consistently reviewed in a timely manner during FY 2022. Effect ? Employee time charged to grants was not certified timely during the year. Cause ? The University?s internal controls did not include follow-up to ensure that key personnel were reviewing and approving personnel costs in a timely manner. Identification as a Repeat Finding, if applicable ? N/A Recommendation ? The University should ensure internal controls related to documenting effort and certification are aligned with Uniform Guidance standards. Views of Responsible Officials and Planned Corrective Actions ? Management concurs with the finding and proper controls are being implemented during FY2023. Management will implement a labor certification monitoring and escalation process. A reminder will be distributed to all principal investigators reminding them of the University?s policy and their responsibilities in the review and confirmation of their personnel expenditures.
Research and Development Cluster, Various Assistance Listing Numbers, Various Agencies, Award Year 2022 Criteria or Specific Requirement ? Special Tests and Provisions ? Key Personnel ? 2 CFR ? 200.430(i) Condition ? The University is required to implement a system of internal controls that provide reasonable assurance of compliance with key personnel requirements specified in grant applications and proposals. Questioned Costs ? None Context ? The University?s time and effort review process includes review of monthly labor certification reports. These reports were not consistently reviewed in a timely manner during FY 2022. Effect ? Employee time charged to grants was not certified timely during the year. Cause ? The University?s internal controls did not include follow-up to ensure that key personnel were reviewing and approving personnel costs in a timely manner. Identification as a Repeat Finding, if applicable ? N/A Recommendation ? The University should ensure internal controls related to documenting effort and certification are aligned with Uniform Guidance standards. Views of Responsible Officials and Planned Corrective Actions ? Management concurs with the finding and proper controls are being implemented during FY2023. Management will implement a labor certification monitoring and escalation process. A reminder will be distributed to all principal investigators reminding them of the University?s policy and their responsibilities in the review and confirmation of their personnel expenditures.
Research and Development Cluster, Various Assistance Listing Numbers, Various Agencies, Award Year 2022 Criteria or Specific Requirement ? Special Tests and Provisions ? Key Personnel ? 2 CFR ? 200.430(i) Condition ? The University is required to implement a system of internal controls that provide reasonable assurance of compliance with key personnel requirements specified in grant applications and proposals. Questioned Costs ? None Context ? The University?s time and effort review process includes review of monthly labor certification reports. These reports were not consistently reviewed in a timely manner during FY 2022. Effect ? Employee time charged to grants was not certified timely during the year. Cause ? The University?s internal controls did not include follow-up to ensure that key personnel were reviewing and approving personnel costs in a timely manner. Identification as a Repeat Finding, if applicable ? N/A Recommendation ? The University should ensure internal controls related to documenting effort and certification are aligned with Uniform Guidance standards. Views of Responsible Officials and Planned Corrective Actions ? Management concurs with the finding and proper controls are being implemented during FY2023. Management will implement a labor certification monitoring and escalation process. A reminder will be distributed to all principal investigators reminding them of the University?s policy and their responsibilities in the review and confirmation of their personnel expenditures.
Research and Development Cluster, Various Assistance Listing Numbers, Various Agencies, Award Year 2022 Criteria or Specific Requirement ? Special Tests and Provisions ? Key Personnel ? 2 CFR ? 200.430(i) Condition ? The University is required to implement a system of internal controls that provide reasonable assurance of compliance with key personnel requirements specified in grant applications and proposals. Questioned Costs ? None Context ? The University?s time and effort review process includes review of monthly labor certification reports. These reports were not consistently reviewed in a timely manner during FY 2022. Effect ? Employee time charged to grants was not certified timely during the year. Cause ? The University?s internal controls did not include follow-up to ensure that key personnel were reviewing and approving personnel costs in a timely manner. Identification as a Repeat Finding, if applicable ? N/A Recommendation ? The University should ensure internal controls related to documenting effort and certification are aligned with Uniform Guidance standards. Views of Responsible Officials and Planned Corrective Actions ? Management concurs with the finding and proper controls are being implemented during FY2023. Management will implement a labor certification monitoring and escalation process. A reminder will be distributed to all principal investigators reminding them of the University?s policy and their responsibilities in the review and confirmation of their personnel expenditures.