Finding Text
2022 ? 004 ? Special Education Cluster (IDEA) Activities Allowed or Unallowed & Allowable Costs/Cost PrinciplesFederal Agency: U.S. Department of EducationFederal Program Title: Special Education Cluster (IDEA)Assistance Listing Number: 84.027/84.173Federal Award Identification Number and Year: FY 21 and FY 22Pass-Through Entity: Indiana Department of EducationPass-Through Entity Number: 19611-76-PN01Award Period: July 1, 2020 through June 30, 2022Type of Finding:? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion)Criteria: Per 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:(i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;(ii) Be incorporated into the official records of the non-Federal entity;(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity,(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;(v)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). . . ."(vi) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and(vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.Condition: During our testing we that an effective internal control system was not in place to ensure compliance with requirements related to allowable costs. Additionally, time and effort procedures were not in place during the audit period.Questioned costs: Known - $80,310.67, Likely - $330,748.52. Known and questioned costs exceed program materiality.Context: In a statistically valid sample, 40 of 40 selections did not have adequate time and effort documentation along with proper timesheets, resulting in questioned costs.Cause: Per discussion with business manager and per testing performed, CLA noted the school did not have time and effort implemented, as they believe they were not required to.Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance.Repeat Finding: No.Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial.View of Responsible Officials: There is no disagreement with the audit finding.